Lawmakers New Proposal Would Raise New Jersey Gas Tax To Fund TTF
by David Madden
TRENTON, NJ (CBS) -- New Jersey has gone three weeks with an impasse over to replenish the nearly depleted Transportation Trust Fund. Hundreds of local road projects were suspended by Governor Chris Christie as a result. Thousands of road workers have been temporarily laid off.
Now comes word of an accord between Assembly and Senate leaders that would increase the state gas tax by 23 cents a gallon, while cutting other taxes that will in time cost the state some 900 million dollars a year.
The gas tax increase has been the one constant in these discussions. It will raise some 2 billion dollars annually for the TTF. The only issue has been how, and where to cut other taxes to get the deal by Christie.
Christie and the Assembly cut a deal that slashed the state sales tax over a year and a half from 7 to 6%. The new accord between Assembly Speaker Vincent Prieto and Senate President Steve Sweeney eliminates that reduction. Sweeney has maintained a sales tax cut would be too detrimental to future state budgets.
"A half a penny is too much in combination with these other taxes," Sweeney told reporters in a conference call. "The sales tax is such a large number."
But other provisions of an earlier deal between Sweeney and Christie have been restored. An increase in the Earned Income Tax Credit to 40% of the federal benefit would help the working poor. And the estate, or so-called "death tax", would be phased out.
In addition, veterans would get a $3,000 tax exemption. And all residents earning less than 100 thousand dollars a year would be eligible for a deduction of up to $500 a year to play for the higher gas tax.
The accord also retains a plan to increase the exclusion of retirement income from state taxes to 100 thousand dollars over a 4 year period. A change would allow for credits for those earning up to 150 thousand dollars in the 5th year of implementation.
Prieto told KYW Newsradio he was willing to part with the sales tax concession as a way to end the stalemate with the Senate. "The state of New Jersey needs this really bad. An impasse for our Transportation Trust Fund is not something that we can stand for," he said.
Sweeney has announced that the Senate Budget and Appropriations Committee would be convened next Friday, immediately after the Democratic National Convention, to amend the Assembly version of the bill. His hope is to have the full Senate vote as early as August First. Prieto would not set a date for Assembly action, but promised to move in a quick fashion.
The wild card here is Governor Chris Christie. He has consistently called for "tax fairness" in any package that would get his approval. His press secretary, Brian Murray, issued the following statement.
"The Senate President and the Assembly Speaker must be more interested in publicly pretending that they have accomplished something on TTF before they go off to the Democratic convention rather than actually accomplishing something. They have not shared the specific details of their joint proposal with the Governor beyond the vague generalities contained in their press release. The Governor will review those specifics if he receives them from Senator Sweeney and Speaker Prieto. Only then can he determine if their plan to fund the TTF with an increased gas tax offers tax fairness to the people of New Jersey in the form of significant broad-based tax relief."
