State Senate President Steve Sweeney watches as the senate passes a tax-increase bill Friday, Oct. 7, 2016, in Trenton, N.J. New Jersey lawmakers have voted to approve a 23-cent-per-gallon hike in the gas tax to pay for transportation work. The Democrat-led Senate and Assembly voted Friday to raise the tax from 14.5 cents a gallon to 37.5 cents a gallon to fund transportation work over eight years. The legislation also cuts the sales and estate taxes, among other measures. (AP Photo/Mel Evans)
TRENTON, N.J. (AP) — New Jersey’s low gas prices are about to get more expensive after Republican Gov. Chris Christie on Friday signed legislation raising the gas tax by 23 cents per gallon, from the 49th highest in the nation to the sixth, to pay for an expired transportation trust fund.
The gas tax, though, is still lower than the gas tax in neighboring New York and Pennsylvania. The hike is set to go into effect Nov. 1.
Christie also rescinded an order that shut down transportation projects in the state. He first issued the order when the transportation trust fund expired months ago.
The legislation signed by Christie raises the gas tax from 14.5 cents per gallon to 37.5 cents per gallon while cutting the sales and estate taxes. It also offers tax credits to veterans and for poorer residents.
He praised the gas tax measure as a compromise and said it offered state residents “tax fairness.”
“Through this legislation, we are continuing our commitment to providing tax relief for working New Jerseyans of all income levels,” Christie said in a statement.
The gas tax passed in the Democrat-led Assembly and Senate despite robust bipartisan opposition from lawmakers and many residents.
On Friday, Republican state Sen. Kip Bateman said he planned to introduce legislation to repeal the gas tax hike.
But the hike also had significant support from business and labor groups, including the Chamber of Commerce. Most significantly, it had the backing of Christie, Democratic Senate President Steve Sweeney and Democratic Assembly Speaker Vincent Prieto, who announced the deal together at a recent news conference.
“With this new law, we’ve ensured a stronger New Jersey and a safer New Jersey,” Prieto said.
The transportation trust fund expired on July 1, and Christie ordered the shutdown of transportation projects. Christie had said he would only support a plan that represented “tax fairness,” or cutting other taxes if the gas tax was going to increase.
The measure decreases the sales tax from 7 percent to 6.875 percent by January and to 6.625 percent by July. It would phase out the estate tax, changing the threshold from $675,000 to $2 million in 2017 and eliminating it in 2018.
The deal includes raising the earned income tax credit, which helps low-income residents, from 30 percent to 35 percent for the current tax year and increasing the tax exclusion on retirement income over four years to $100,000 for joint filers. Veterans would get personal exemptions for state income taxes under the measure.
Christie and other leaders call the new measure, which would boost the transportation trust fund from $1.6 billion to $2 billion a year, a compromise.
New Jersey voters face a ballot question on Election Day asking them whether all proceeds from the state’s gas tax be used only for transportation projects.