New Jersey Gas Tax Hike, The Ultimate Wallet Killer

By Politics FOXBusiness

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New Jersey motorists aren’t too happy about the upcoming gas tax hike, but legislation has been signed by Republican Gov. Chris Christie, and it’s a done deal.

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The hike, of an additional 23 cents a gallon at the pump, goes into effect on Nov. 1.

It’s been nearly 30 years since New Jersey raised its gas tax—the last hike came when Ronald Reagan was in the White House. This hike takes the Garden State from having the nation’s second lowest gas tax at 14.5 cents to the seventh highest at 37.5 cents, according to the Tax Foundation. This is considerably higher than the national average of nearly 30 cents, according to the American Petroleum Institute.

Granted, even with the hike, fuel in New Jersey will still be cheaper than in neighboring New York and Pennsylvania, says Gregg Laskoski, a Senior Petroleum Analyst with GasBuddy.com. “If you’re an occasional driver who drives maybe from New Jersey to New York to go shopping or see friends every now and then, you’ll be slow to feel the difference and it might not be that much.”

As for commuters and small businesses that depend on larger vehicles, that’s a different story. “They’ll feel it right away,” says Laskoski. And this hike (pegged to the state's infrastructure needs, delayed repairs and stark reductions in federal funding) will be painful.

Gas Tax Hit - Per Month Cost

  • Small Cars: $17-$22 
  • Large Cars, SUVs, Trucks: $28-$55

*Based on fillling up every 5 days, 6 times per month

 

“If you’re a typical commuter and you’re filling up every five days or about 6 times a month, this hike is going to cost you anywhere from $17-$22 more per month (for small cars) to $28-$55 more per month (for larger vehicles including some SUV’s and pickup trucks),” says Laskoski.

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Additionally, there are ripple effects. When the cost of delivering products and services go up, those costs – whether initially assumed by businesses based in the state or coming into the state - are generally passed onto the consumer.

“The electrician, the plumber, the food service person, your grocery store may all charge more.  Some will be upfront about it; some will designate additional charges as a ‘fuel surcharge’; others may just use this tax hike as a ‘reason’ to pump up what they were already charging because no one wants to incur additional costs if they don’t have to,” says Laskoski.

Hence the noise: petitions, criticism from some advocacy groups, talks of appealing and more -- despite the fact that the legislation introduces a number of tax cuts and other measures to cushion the blow.

Adding fuel to the fire: Not all of the state’s residents believe that the money raised from this tax (an estimated $16 billion over eight years), and deposited into the now bone-dry Transportation Trust Fund, will be used for its intended purposes: to make improvements to the state's roads, bridges, and mass transit. Skeptics, take note: you’ll have a say on Election Day.

Vera Gibbons is a financial journalist and Senior Consumer Analyst with Gasbuddy.com. A former analyst with MSNBC who appeared regularly on the “Today Show,” Gibbons was previously a Financial Contributor with CBS News. Prior to CBS, she worked as a Correspondent for CNBC’s “High Net Worth”.  Gibbons has written for Inc., SmartMoney, Kiplinger’s, Real Simple, The New York Times, Fortune.com, CNN Money and CNBC.com. Today, she writes for FoxBusiness.com, Bankrate.com, and Time.com. She appears regularly on Fox News and Fox Business News.

 

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