No more cheap gas in New Jersey as gas tax hike takes effect

TRENTON, N.J. – The days of cheap gas in New Jersey came to an end Tuesday when a 23-cents-per-gallon increase in the state’s gas tax took effect.

New Jersey previously had the nation’s second-lowest gas tax, behind only Alaska. But the boost has catapulted it to the sixth-highest.

The increase came about after the state ran out of money to pay for transportation projects. The boost from 14.5 cents per gallon to 37.5 cents marks the first time the gas tax has been raised since 1988.

The tax boost is part of a deal between Republican Gov. Chris Christie and the state’s Democratic-led Legislature that includes an 8-year, $16 billion transportation trust fund and cuts to the estate and sales taxes. The deal passed with bipartisan support, but also faced strong opposition from lawmakers on both sides of the aisle. Two Republican state senators — Kip Bateman and Mike Doherty — have recently introduced a measure seeking to repeal the increase, saying people were shocked to learn that the 23-cent a gallon increase could rise in the future if revenue targets are not met.

New Jersey drivers are not the only ones affected by the tax hike.

Motorists in neighbouring states have long crossed the borders to fill up at the cheaper rates, and that has long provided an economic boon to gas station owners in New Jersey, especially during the summer tourism season.

Industry officials and drivers alike think there are still enough incentives for out-of-staters to travel to New Jersey, though they admit it’s not clear how much of an impact the higher tax rate will have in the coming months and years.

Also affected are people who use the ride-hailing company Uber. It announced Monday that it will raise fares by 2 cents per mile to help drivers pay for gas.