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4 (and more) tax moves to make this October

New Jersey hikes gas tax by 23 cents per gallon
Other Garden State taxes will be reduced, eliminated

Gasoline prices were amazingly low this past summer. One reason that drivers nationwide paid less at the pump was that state gasoline excise taxes also were down.

Cheap gas in Central Texas Feb2016_cropped2
Incredibly cheap gas at HEB in Marble Falls, Texas, earlier this year.

The average state gas tax across the United States was 20.72 for the second quarter of the year. That was 16 cents per gallon less than earlier in the year. 

But that's about to change in one of the low gas tax states.

Big N.J. gas tax hike imminent:  New Jersey is set to hike its gas tax by 23 cents. The increase, which would raise the per gallon state tax to 37½ cents, could take effect as soon as next week

New Jersey's Republican Gov. Chris Christie, who still has a year left in his second term, reluctantly agreed to the increase.

It will add $32 billion (when federal funds also are counted) over eight years to state's transportation trust fund, which pays for road, bridge and rail improvements.

The deal, which has been in the works for months, was reached on the same day as a fatal commuter train crash in Hoboken.

"While I'm not authorizing any other tax increase during my time as governor, I'm authorizing this one because of the importance of the Transportation Trust Fund, the tax fairness that we've accomplished together and the compromise we've reached, and because we need to responsibly finance this type of activity," Christie said at a news conference announcing the gas tax deal.

In exchange for the higher fuel tax, New Jersey's Democratic and Republican lawmakers agreed to a lower state sales tax, an increase in the state's Earned Income Tax Credit, added tax breaks for retirees and veterans, and a phaseout by 2018 of the state's estate tax.

Long time coming: New Jersey's gas tax hike is the state's first increase since 1988. Before the 23 cents per gallon deal, New Jersey's 10½ cents per gallon state gas excise tax was the second-lowest in the nation, behind only the 8.95 cents per gallon gas tax in oil-rich Alaska. 

State gas tax map as of July 1 2016_American Petroleum Institute
State gas taxes as of July via American Petroleum Institute.
Tax amounts shown include the 18.4 cents per gallon federal gas tax.

Once New Jersey's new tax takes effect, the Garden State's 37½ cents per gallon gasoline levy will be the nation's seventh highest. That amount includes 33½ cents per gallon for the state's gas excise tax and a 4 cents per gallon petroleum products gross receipts tax.

The amount of time since New Jersey's last gas tax hike, along with the actual increase and how it boosts the state's national gas tax ranking, combine to make 23 cents this week's By the Numbers figure.

Be careful out there N.J. drivers. I suspect all roads to state gas stations will be jammed as folks head out to top off their tanks before the new gas tax becomes law.

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