On October 7th, New Jersey lawmakers agreed to hike diesel fuel taxes in order to justify tax cuts for residents.
The bipartisan agreement, which is expected to be signed by Governor Chris Christie later this month, will increase diesel fuel taxes by 27 cents per gallon and gasoline taxes by 24 cents per gallon.
In order to offset the tax increases, the bill will implement several tax cuts for residents. The bill will reduce the state’s sale tax from 7% to 6.6%, and slash income taxes for middle and low income residents.
Interstate truckers who fuel up in the state but don’t live there will pay the increased fuel taxes, but won’t benefit from any of the reductions.
Governor Christie praised the bipartisan deal by calling it a “a reliable, dedicated source of revenue” and a “compromise that includes the first broad-based tax relief for New Jersey residents since 1994.”
The state plans to use the increased fuel taxes to replenish their highway repair fund. Since July, all non-emergency road work was placed on hold because the fund was out of money.
The diesel fuel tax increase will be implemented in two stages. The first increase will go into effect on January 1st and the second on July 1st.
