TRENTON, NJ — New Jersey State Senator Carmen Amato (R-9) is urging the state to return an $85 million sales tax windfall to residents, following revelations at a recent budget hearing that skyrocketing electricity rates will generate far more in tax revenue than anticipated.
Key Points
- Electricity rate hikes will drive $85 million in unexpected energy-related sales tax revenue in NJ.
- Sen. Amato is calling for that windfall to be returned to utility customers.
- FY 2026 energy tax collections are now projected to hit $259.5 million, up from the initial $174.4 million estimate.
According to the Office of Legislative Services (OLS), the surge in residential electricity prices — set to rise between 17.2% and 20.2% in June 2025 — will push energy-related sales tax collections to $259.5 million in Fiscal Year 2026. That figure far exceeds Governor Phil Murphy’s original estimate of $174.4 million.
The added $85 million in tax revenue is the direct result of the increased energy rates being subject to New Jersey’s 6.625% sales tax.
“Democrat energy policies are largely responsible for these rising energy costs and if the Democrat-controlled government is collecting more than expected from energy sales taxes, it only makes sense that they return the money to utility customers,” Amato said in a statement.
Amato’s remarks followed Tuesday’s state budget hearing, where the OLS presented its Tax and Revenue Outlook. The increase in electricity bills was previously announced by the New Jersey Board of Public Utilities earlier this year.
The senator pledged continued efforts to advocate for rate relief and to push for policies that lower energy costs for New Jersey residents.
No formal proposal has been introduced yet to refund the excess revenue, but Amato’s statement signals a likely point of contention as lawmakers negotiate the FY 2026 budget.
