NJ Transportation Trust Fund Reauthorized, Gas Tax Increasing

On Mar 26, 2024

Gov. Phil Murphy today signed legislation renewing the state’s Transportation Trust Fund (TTF). The measure will increase the state’s gas tax by 1.9 cents per year, for five years, starting July 1, and establish an annual electric vehicle fee of $250 (with increases of $10 per year in each of the remaining four years). The money raised will be used to invest billions to modernize and maintain New Jersey’s transportation infrastructure, while providing additional capital funding for NJ TRANSIT, support local and county projects to alleviate the burden on local taxpayers, and create thousands of good-paying union jobs.

The law signed today (A-4011/S-2931) will:

• Establish a five-year program, beginning July 1, 2024 and ending June 30, 2029, to ensure a steady stream of revenue to support statewide transportation projects. The law annually adjusts the Petroleum Products Gross Receipts Tax rate by updating the statutorily prescribed revenue target, commonly referred to as the “highway fuel cap,” which is currently based on 2016 highway fuel tax collections.
• Authorize roughly $10.37 billion in appropriations for the state’s Annual Transportation Capital Program from FY 2025 through FY 2029. Of that amount, an estimated $2.3 billion will be passed on as state aid to counties and municipalities for transportation projects.
• Provide up to $8.84 billion in bonding authority to the TTF Authority over the five-year period (approximately $1.76 billion annually);
• Provide roughly $1.5 billion in pay-as-you-go funding for transportation projects, growing the $2 billion maximum annual capital program amount by 3% per year in years three, four, and five of the reauthorization, which coincides with the end of the federal Bipartisan Infrastructure Law funding. This incremental revenue growth will be split evenly among NJ DOT, NJ TRANSIT, county governments, and municipal governments, providing greater investment at the county and local level and relieving the pressure on local property taxpayers to fund infrastructure investments.
• Bolster NJ TRANSIT by providing an additional $91.75 million over the last three years of the program to augment the $767 million the agency currently receives annually from the TTF to fund new capital projects. By year five, NJ TRANSIT will receive over $813 million annually for capital projects.
• Establish an annual electric vehicle fee of $250 (with increases of $10 per year in each of the remaining four years), which will ensure that all motorists using the roads share in the responsibility to maintain their conditions.
• Delay the annual tax rate adjustment for sales of gasoline and diesel motor fuel by three months, from October 1 to January 1, so that any rate changes will coincide with the start of the new year.

“New Jersey sits at the heart of one of the busiest stretches of commerce in the entire world,” said the governor. “Whether it’s trying to get home to their families after a long day or shipping critical goods to keep our economy humming, our residents and our businesses depend on the strength of our transportation system to get where they need to go. This legislation will ensure we deliver for them by enabling us to rebuild and maintain our entire transportation system, while creating thousands of good-paying jobs in the years to come and easing the burden of property taxes by offsetting these costs for local governments.”

“New Jerseyans depend on safe and reliable public transportation to get to work and school, and the Transportation Trust Fund is a critical part of our state’s efforts to ensure our infrastructure is safe and accessible for everyone,” said Congressman Frank Pallone. “Today’s announcement is a win-win for residents, workers, businesses, tourists, and anyone else who uses our state’s roads or rails. I’m always grateful to our hardworking union members, who keep our public transportation running smoothly. I’ll continue to fight at the federal level to deliver funding to our state so we can build on this progress.”

“The reauthorization of the New Jersey Transportation Trust Fund is foundational to the continued investment in our transportation infrastructure,” said Diane Gutierrez-Scaccetti, Chief of Staff to Governor Murphy and former NJDOT Commissioner. “Transportation keeps our communities moving and our economy strong. I remember the impact it had on our brothers and sisters in labor when the previous administration could not reach a deal in time and projects all over the state were forced to halt or shut down. With this in mind, we were determined – and now proud – to reach a good agreement months ahead of time to ensure that this critical work will continue without interruption.”

“We appreciate the Legislature taking action to renew the TTF, which is vital to maintaining and improving our state’s transportation infrastructure,” said NJDOT Acting Commissioner Fran O’Connor. “In addition to funding projects on Interstate and State highways, TTF funding profoundly impacts our local communities at the county and municipal levels. This bill increases funding for NJDOT’s Local Aid programs so even more critical infrastructure projects can get done at the local level.”

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