N.J. Lawmakers Send Christie Gas-Tax Increase to Fund Roadwork

  • Christie makes deal to sign tax increase if other levies cut
  • Foes warn of ‘bait-and-switch’ that blows hole in state budget

New Jersey’s Democrat-led legislature approved a 23-cent-per-gallon tax on gasoline to end a crisis that held up $3.5 billion in road and rail projects.

The measure passed the Senate 24-14 and the Assembly 44-27 on Friday. Republican Governor Chris Christie has promised to sign the bill, which would take effect around Nov. 1. Voters that month will be asked to empower the legislature to constitutionally dedicate the new revenue to transportation.

Christie, who campaigned for president on his opposition to tax increases, has said he wouldn’t approve higher gasoline costs without breaks elsewhere for New Jerseyans, who pay the highest property levies in the U.S. Lawmakers also voted to cut New Jersey’s 7 percent sales tax in phases to 6.6 percent by 2018, eliminate the estate tax and raise the earned-income tax credit to 35 percent of the federal benefit, a boost for the lowest earners.

Though the plan had backing from Senate President Steve Sweeney and Assembly Speaker Vincent Prieto, some colleagues from both parties said it was a risky trade-off, as it wasn’t clear how the state will manage without less revenue for its general fund. Republican Senator Michael Doherty, 53, from Warren County, called the package of bills a “bait-and-switch.” Assemblyman John Wisniewski, 54, the Democratic chairman of his house’s transportation committee, called the deal a “travesty” that will lead to another increase in the gas tax, which currently is 14.5 cents per gallon, second-lowest in the U.S. behind Alaska’s.

Christie’s office said the savings from the tax breaks will amount to $1.4 billion annually by 2021.

“We can’t make up that lost revenue,” Senator Raymond Lesniak, a Democrat from Elizabeth, said by telephone Thursday. “I’m not against any gas-tax increase. It’s too much, it’s too quick, and without any reforms that will make it cost less to do road construction.”

New Jersey Policy Perspective, a Trenton-based group that studies issues affecting poor and working-class residents, said the 10-year cost will be $13 billion. On Thursday it circulated an open letter to the governor and lawmakers signed by more than three dozen wealthy people who objected to the estate-tax elimination.

“As citizens who are among the wealthiest 5 percent of residents in our beloved state, we have both the means and the responsibility to contribute more to the needs of our state,” the letter stated. “It would be a travesty to give a tax break to a small cohort of wealthy families (including ourselves) at the expense of adequately funding schools, health care and public infrastructure and other pressing needs in the state.”

The gas-tax revenue will support $16 billion of spending on bridges, asphalt and rail equipment under Christie’s proposed eight-year Transportation Trust Fund plan. In July, a month before New Jersey used the last of its most recent, $8 billion transportation authorization, Christie suspended such nonessential projects statewide.

Christie’s announcement on the deal came at a quickly arranged news conference in Trenton on Sept. 30, a day after a New Jersey Transit train crash in Hoboken that killed a woman on the terminal platform and injured more than 100 passengers. Federal investigators are trying to determine the cause.

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