Christie Proposes 23-Cent Gasoline Tax Increase for N.J.Elise Young
Republican Governor Chris Christie said he wants the legislature to approve a 23-cent per gallon tax on gasoline to end New Jersey’s transportation-funding crisis.
The increase in what’s now the nation’s second-lowest levy,
14.5 cents, would raise $16 billion over eight years, he told reporters at a news conference in Trenton with Democratic legislative leaders.
In exchange, the 7 percent retail sales tax on consumer goods would drop in phases to 6.6 percent by 2018, he said. Lawmakers also will eliminate the estate tax and raise the earned-income tax credit to 35 percent of the federal benefit, a boost for the lowest earners, Christie said.
The state in August exhausted its $8 billion account for road and rail work. Non-essential projects have been suspended since July as Christie and legislative leaders squabbled over a gasoline-tax increase to replenish the fund.
“Sometimes, it doesn’t go as quickly as we might like,” the governor said.
The impasse, which forced the shutdown of transportation projects statewide in July, was weighed with the state’s unfunded pension in reports issued last month by Fitch Ratings and S&P Global Ratings. Though they left New Jersey’s credit rating unchanged, at sixth highest, each warned that the state appeared unable to resolve its chief financial troubles. Only Illinois has lower credit scores.
The pension fund, valued at $72.9 billion on June 30, lost
0.87 percent in the past fiscal year, according to figures released this week. It’s unfunded liability is at least $83 billion, and Christie has warned that the system will go bankrupt without a sequel to his first-term bipartisan benefits changes that took a bigger share of workers’ pay.
Lawmakers will vote on the gasoline-tax plan in a special session Wednesday, said Senate President Stephen Sweeney, a Democrat from West Deptford. It would take effect at once. Voters will be asked in November to permit lawmakers to constitutionally require all the new revenue go toward road and rail projects.
Vincent Prieto, the Democratic Assembly speaker from Secaucus, said the compromise will please a variety of interests.
“Everyone got something,” he said.
The deadlock over the gasoline tax delayed highway improvements and spending for New Jersey Transit, the nation’s third-largest rail provider. A train crash Thursday in Hoboken that killed one woman and injured more than 100 others wasn’t a factor in the timing of the deal’s announcement, Sweeney said.
Christie, a chief adviser to Republican presidential nominee Donald Trump, who has made tax cuts a centerpiece of his domestic agenda, made the announcement late Friday at a news conference convened with 15 minutes’ notice. He took no questions.