New Jersey Bill to Raise Gas Tax Passes Out of Committee

The New Jersey senate budget committee approved a bill last week to renew the state’s Transportation Trust Fund. As currently written, the bill would raise the gas tax around 2 cents a year and create a new registration fee for zero-emission vehicles. The money would go to support future state transportation projects, reports Colleen Wilson for NorthJersey.com.

Though the committee advanced the bill, which will now head for full approval by the New Jersey Senate, the vote was split along party lines and not everyone agrees on the approach. Republicans recently introduced their own bills for renewing the fund that would not increase the gas tax and would direct money from the sales tax on electric vehicles and a new registration fee to the state’s Transportation Trust fund. It would also rely on keeping the bonding capacity to $12 billion, less than the $15 billion proposed in the Democrats’ bill, writes Wilson.

However, experts who testified before the senate budget committee expressed concern that the proposed registration fee for electric vehicles would disincentivize the purchase or leasing of electric vehicles. Some suggested levying a 2.5-cent-per-kilowatt-hour fee at charging stations, which is similar to a gas tax in that it’s a usage based fee levied at the point of sale. Six other by states, including Iowa, use this approach.