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N.J. Gov. Murphy: Gas Tax Increase Stays; Sales Tax Decrease Goes

TRENTON, N.J. (CBSNewYork) – Is a higher sales tax on the horizon in New Jersey?

When the state's gas tax increased last year, lawmakers agreed to lower the sales tax. But now, Gov. Phil Murphy says he wants to break the deal.

Two years ago, New Jersey's transportation trust fund was bankrupt. The solution was a 23-cent gas tax increase. The deal raised taxes at the pump, but lowered the sales tax.

Lawmakers in Trenton vowed that if the sales tax was ever raised again, the gas tax hike would go away.

But it seems the newly elected governor wants to restore the sales tax but "no plan to lower the gas tax."

That reverses former Gov. Chris Christie's order.

"The sales tax was reduced as a gimmick, just so that he could say that he didn't raise taxes in the aggregate. It wasn't reduced for any good public policy reason," Murphy said.

Last year, the sales tax dropped from 7 to 6.875 percent and, as planned, went down to 6.625 this year. Now, the governor says, raise it back to 7 percent.

"We don't take the sales tax piece lightly. That's going to cost you $85," he said.

Republicans say the change could be a credibility killer.

"Every single Democrat who voted for that deal then knew what was in that deal. There is a poison pill in it. It says if you're going to break your word and increase any of these taxes again, the gas tax goes away," said State Sen. Declan O'Scanlon.

Some residents CBS2's Meg Baker spoke with Monday were not happy.

"They're going through the roof. As a matter of fact, I'm buying a home in Florida -- the end of the week I'm signing off on it -- just because it's too expensive here," Nancy Messina said.

"Something else they're getting to come out of your pocket every day, a little at a time," said Grant Arthur.

Others said a minimal increase in the sales tax won't affect them much. But the gas tax?

"I'm more focused on driving cars that are more efficient from a gas perspective, so I'm not going to worry about those pennies," Brad Alcini said.

Murphy said the extra funds will go toward education, transit and other initiatives.

Republicans worry the governor's budget includes so many increases, what can we expect next year?

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