Sen. Steven Oroho: Repeal the Gas Tax Increase, Gov. Murphy

A key North Jersey Republican Senator is calling upon Gov. Phil Murphy to govern as he has during the coronavirus pandemic to block an upcoming gas tax increase.

State Sen. Steve Oroho (R-24) wants the governor to abandon consideration of a 9.3 cent/gallon gas tax increase that was announced by the state’s Treasury Department on Aug. 28.

Oroho notes that the first-term Democratic governor has repeatedly cited and exercised vast executive authority to respond to the current public health emergency in dealing with the economy and should now do the same in regards to the gas tax.

Governing by EO

“Gov. Murphy has had no problem issuing executive orders during the current public health emergency to take extreme steps like shutting down the New Jersey economy and preventing voters from casting their ballots in person,” said Oroho said in a press statement. “He has changed statutory deadlines and unilaterally ordered numerous other changes without legislative approval.”

Under the 2016 law negotiated by Gov. Chris Christie, New Jersey’s Transportation Trust Fund program is required to provide $16 billion over eight years to support critical infrastructure improvements to the state’s roadways and bridges. As a result, the state’s Petroleum Products Gross Receipt (PPGR) tax rate must be adjusted accordingly to generate roughly $2 billion per year. 

According to Treasury Department officials, the tax hike was necessitated as a result of lower fuel consumption trends, exacerbated by the COVID-19 pandemic. The consumption of gasoline declined by a total of 38.7% from March to May, while diesel fuel consumption declined by 16.5% as New Jerseyans continued to work from home and limited extracurricular activity due to the coronavirus. The department projects highway fuels revenue collections in FY 2020 will fall short by $154.0 million.

Penalizing Drivers

Oroho, who sits on the Senate Budget and Appropriations Committee as well as the Senate Economic Growth Committee, characterized it as “unbelievable” for the governor to suggest that he can not prevent a gas tax increase when many families are in economic crisis.

“Considering his own executive actions kept people home and off the roads artificially depressing gas consumption, drivers shouldn’t be penalized,” stated Oroho.

The PPGR tax rate will increase to 40.2 cents for gasoline and 44.2 cents for diesel fuel at the beginning of October. When coupled with the current 10.5 cent Motor Fuels Tax rate on gasoline and the 13.5 cent rate for diesel fuel, the total tax rates for gasoline and diesel fuel will be 50.7 cents and 57.7 cents, respectively.

The Highway Fuels Revenue Target is required to be reviewed annually each August by the Treasurer, in consultation with the Legislative Budget and Finance Officer. The target is to be adjusted at the start of each year based on the prior fiscal year’s shortfall or surplus.