N.J. Democrats Agree on Road Plan; Christie Says Not So Fast

  • Proposal doesn’t cut sales tax as Governor Christie had sought
  • Jet-fuel levy opposed by airlines left out of proposed bill

New Jersey’s Democratic legislative leaders announced an agreement to fund the almost bankrupt Transportation Trust Fund for billions of dollars in highway and rail improvements over the next decade.

A spokesman for Republican Governor Chris Christie, though, said the proposal was a stunt before the Democratic National Convention in Philadelphia next week.

The proposal, if signed into law, would raise the gasoline tax by 23 cents per gallon. It doesn’t include a provision, favored by Christie last month, to drop the sales tax to 6 percent from 7 percent. It also makes no increase in the jet-fuel tax, which airlines had said would drive up passenger costs and hurt the state’s business climate.

Instead, the bill offers broad tax breaks and provides an income-tax deduction for motorists of as much as $500. It also phases out the estate tax, which Christie has said drives retirees from New Jersey to states that don’t take a share of a deceased’s assets. The plan would raise the current exemption of $675,000 until it was eliminated in 2020.

“We have an agreement on a plan that is needed to address the state’s critical transportation needs at the same time it provides targeted tax savings for retirees, the working poor and middle class families,” Senate President Steve Sweeney, a Democrat from West Deptford, said in a joint statement with Assembly Speaker Vincent Prieto, a Democrat from Secaucus.

Brian Murray, a spokesman for Christie, said in an e-mailed statement that Sweeney and Prieto were “more interested in publicly pretending that they have accomplished something on TTF before they go off to the Democratic convention.”

“They have not shared the specific details of their joint proposal with the governor beyond the vague generalities contained in their press release,” Murray said. Christie, who has spent this week at the Republican National Convention in Cleveland, won’t agree to higher gas prices, he said, unless they’re accompanied by “significant, broad-based tax relief.”

The governor on July 8 shut down more than $3.5 billion in road and rail projects, citing a need to prioritize as the trust fund was on track to run out of money by mid-August.

A bill passed by the Assembly last month and supported by Christie and Prieto, though blocked by Sweeney, authorized $16 billion in transportation spending over eight years. Sweeney said he is calling the Senate budget committee to convene next week to amend that measure. The latest proposal calls for $20 billion -- $15 billion of borrowing and $5 billion of cash -- over 10 years, according to the Senate Democratic office.

Sweeney, on a conference call Friday with reporters, said he hasn’t discussed this plan with the governor. Christie presented him with an alternative on Thursday that “wasn’t acceptable,” he said, and declined to give specifics.

The state’s gasoline tax is the second-lowest in the U.S.; only Alaska pays less.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE