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NJ Assembly Approves Proposal To Hike Gas Tax, Cut Sales Tax

TRENTON, N.J. (CBSNewYork/AP) -- In an early morning vote Tuesday the Democrat-led Assembly, with Republican Gov. Chris Christie' support, passed sweeping legislation to raise New Jersey's gasoline tax by 23 cents per gallon while funding road and bridge work and slashing the sales tax from 7 percent to 6 percent.

The Assembly voted shortly before 1 a.m. Tuesday, while Christie chatted with staffers and lawmakers at his statehouse office. The legislation, which would set up a $2 billion-per-year transportation trust fund over the next eight years, now goes to the Democrat-led Senate for consideration.

The vote comes after Christie's statehouse office was as busy as a hotel lobby, with legislative leaders entering and exiting throughout the day and as the current $1.6 billion-per-year fund runs out of authority for borrowing on July 1.

The Assembly legislation also came after lawmakers hammered out a separate bipartisan deal to hike the gas tax by 23 cents while phasing out the estate tax, raising the retirement income tax threshold, boosting a tax credit for low-income filers and establishing a charitable tax deduction.

The new legislation includes the same retirement income tax breaks, but cuts the other changes backed by Senate President Steve Sweeney, among others.

"This is the first broad-based tax cut for all New Jerseyans since 1994," Christie said.

Christie, a failed Republican presidential candidate who signed a pledge not to raise taxes and who currently is a top adviser to presumptive Republican nominee Donald Trump, got involved personally in the transportation debate after months of calling for "tax fairness,'' but not detailing his plans.

"I'm pleased that the Assembly has heeded my suggestion for tax fairness as I've been calling for for a long time,'' Christie told reporters gathered outside of his office. "I think it was needed, necessary, while at the same time we're going to have constitutionally dedicated revenue to improve roads, bridges and mass transit systems here in the state.''

In a recent report, the American Civil Engineers found almost half of New Jersey roads are deficient and about 11 bridges need to be replaced.

Assembly Speaker Vincent Prieto estimated the sales tax cut would cost about $1.3 billion in revenue. The gas tax increase would bring roughly the same amount, according to legislative estimates.

"We're giving a tax break to basically everybody in New Jersey,'' Prieto said. "It's important to put money in the pockets of people, but it's important to fund the transportation trust fund that runs out of money at the end of this fiscal year.''

Sweeney said he woke up to the news.

"I went to sleep with one plan and woke up with a different one...I was actually pretty surprised to read that they passed a formula," he told WCBS 880's Marla Diamond. "We're just studying what they did to be honest with you. We think we have a bill. We think we have a good bill."

The proposal is completely different from what the Senate wanted, which was to eliminate the estate tax and increase the earned income tax credit.

The deal must still be approved by the Senate. Sweeney is hopeful a compromise could be reached by Thursday, when the transportation trust fund runs dry, Diamond reported.

Christie said the gas tax hike would go into effect on July 1 if the bill is signed into law. The sales tax cut would be phased in at 6.5 percent on Jan. 1 and then would drop to 6 percent a year later under the plan.

The hike would make New Jersey's gas tax the seventh highest in the country.

Many drivers weren't happy.

"I think it's highway robbery," truck driver Paul Kiesel told CBS2's Esha Ray.

"It makes you feel like you're fighting a losing battle that's how it makes you feel. You aren't making any money," truck driver Guy Childs said.

"It's not like New York City where you have a decent subway system that you can get on the train or whatever. You need a car, you need a vehicle to move around," said commuter Thomas Reyes.

One driver thought the deal was fair.

"I don't like paying additional taxes for anything, but if they need the money, I'd rather see them take it from the guys who use the gas than the general public," Bob Patinada, of Englewood, told WCBS 880's Marla Diamond.

Democratic Assemblyman John Wisniewski, who opposed the plan, said the state couldn't afford to cut as much tax revenue in the transportation plan as it was bringing in. Christie himself has struggled to close budget gaps, including this year's nearly $600 million hole.

"We're spending money we don't have,'' Wisniewski said.

Christie disagreed. There would be an economic boost by putting money back in people's hands, he said.

"It's the people's money and they deserve to have it back,'' he added.

(TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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