Deal Reached To Increase NJ Gas Tax By 23 Cents

Gov. Chris Christie and New Jersey lawmakers have reached an agreement to fund the Transportation Trust Fund through a 23-cent increase in the state's gas tax.

The governor made the announcement Friday afternoon during a joint press conference with Senate President Steve Sweeney and Assembly Speaker Vincent Prieto.

Christie said state lawmakers have reached a deal to reauthorize the Transportation Trust Fund for eight years at $2 billion a year. The deal includes various tax cuts, including a reduction in the sales tax and an eventual elimination of the estate tax.

The estate tax "has been a drag, in my view, on economic growth," Christie said. Under the deal, it will be phased out over the next 15 months and will be eliminated altogether as of Jan. 1, 2018.

Sales tax reductions include an incremental reduction on Jan. 1, 2017, when it will go down from 7 percent to 6.875 percent. The following year, the sales tax will go down another quarter of a point under the terms of the deal.

The gas tax hike would go into effect immediately after the deal is approved by the legislature and signed by the governor, estimated to be sometime in early October, NJ.com reported.

Christie said the agreement on the Transportation Trust Fund will be "good for the economy" and New Jersey residents. "All of these things are going to lead to a more affordable state," the governor said.

Over the next eight years, state and federal funds will lead to more than $32 billion in infrastructure improvements and modernizations in New Jersey, the governor said. “We are financing these expenditures in a responsible way."

There has not been a gas tax increase in New Jersey since 1988, Christie noted.

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