A gas tax increase instituted in New Jersey in 2016 translated to a noticeable change in gas-buying habits for neighboring states, according to data released Thursday by AAA Mid-Atlantic.
The statistics--tracked and compiled in conjunction with Oil Price Information Service (OPIS)--showed that, in 2017, New Jersey sold about 17.7 million fewer gallons per month than in 2016, when the 23 cent-per-gallon hike was instituted in order to address infrastructure issues in the state.
That substantially impacted Delaware and Pennsylvania, as drivers who live and commute in the tri-state region overwhelmingly chose to gas up elsewhere.
In Delaware, for example, there was an average increase of 208,000 gallons more of taxable gas purchased per month in 2017 over 2016. As a result, the auto club estimated it raised an additional $574,000 of annual gas tax revenue for the state.
Meanwhile, in Pennsylvania, the year over year average was 7.48 million gallons more per month.
"The numbers clearly show that many drivers who regularly commuted between states would fill their tanks up in New Jersey where they could pay anywhere from 8 to 28 cents less per gallon than either Pennsylvania or Delaware before the tax hike went into effect in November of 2016, but when that price advantage went away, drivers changed their gas buying habits accordingly," surmised Ken Grant, Public and Government Affairs Manager for AAA Mid-Atlantic in Delaware, in a statement.
Despite New Jersey's decision to normalize its pricing with neighboring states, AAA noted that Pennsylvania's gas prices remain highest in the region, 10 to 15 cents higher than New Jersey on average and twice that of Delaware merchants.
Further tipping the scales to Delaware with respect to where to purchase fuel is that Pennsylvania doesn't protect its gas revenues from non-transportation related expenditures. In contrast, New Jersey chose to establish a "lockbox" for its transportation fund as part of its 2016 gas tax hike package, imitating Delaware's model in the process.
"Fortunately, drivers who get their gas in Delaware can rest assured that the gas tax they are paying is going to be used for roads and infrastructure, thanks to the Constitutional Amendment the Delaware General Assembly passed in 2017."
New Jersey is scheduled for another modest gas tax increase in October, raising the price of fuel an additional 4.3 cents per gallon.