Newspaper article The Record (Bergen County, NJ)

Funding Deal Will Hike N.J. Gas Tax

Newspaper article The Record (Bergen County, NJ)

Funding Deal Will Hike N.J. Gas Tax

Article excerpt

Governor Christie and the state's top Democratic lawmakers struck a deal on Friday to modernize New Jersey's fraying network of roads, bridges and railways in the next eight years -- a renovation program that will increase costs for commuters, since the state's gas tax will rise by 23 cents a gallon as early as next week.

"While I've not authorized any other tax increase during my time as governor, I'm authorizing this one, because of the importance of the Transportation Trust Fund, the tax fairness that we've accomplished together and the compromise that we've reached, and because we need to responsibly finance this type of activity," Christie said at a hastily called State House news conference Friday afternoon.

Christie, Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto reached agreement after months of scuttled plans and aborted deals. The state's Transportation Trust Fund ran out of money this summer and exhausted its legal authority to borrow more funds in July. Thousands of road contractors were suddenly out of work during their busiest season as the stalemate stretched from summer to fall.

Now New Jersey can expect to see $32 billion, a combination of state funds and federal matching funds, pumped into the state's economy and transportation infrastructure in the next eight years, Christie said.

To help pay for that, the state's gasoline tax will go from 14.5 cents to 37.5 cents a gallon.

Christie had long called for a package of tax cuts to offset the increase in the gas tax and had proposed slashing the state's sales tax from 7 percent to 6 percent. In the end, the deal he struck would reduce the sales tax by a smaller amount: from 7 percent to 6.625 percent over two years.

"This is the first broad-based tax cut for all New Jerseyans since 1994," Christie said.

In addition, Christie and the legislative leaders agreed to:

* Eliminate New Jersey's estate tax, which applies to all estates over $675,000, over 15 months.

* Increase state tax exemptions over four years for retirement and pension income, to $100,000 for joint married filers, $75,000 for individuals and $50,000 for spouses who file separately.

* Institute a new tax break for veterans who were honorably discharged.

* Raise the state's earned income tax credit for the working poor from 30 percent of what the federal government provides to 35 percent.

"All of these things are going to lead to a more affordable state ... and they're going to lead to infrastructure that is even better than what we have today," Christie said.

"While it took us some time to get here, in the end everyone worked together and compromised to create a plan we could all coalesce behind -- one that puts safety first, puts residents back to work and provides broad-based tax cuts for all New Jersey residents," said Prieto, D-Secaucus. He added: "Our road infrastructure is crumbling."

Prieto and Sweeney said they plan to call a special session on Wednesday to approve the deal, and they added that they expect to have enough bipartisan support in both chambers to pass the legislation.

The total cost to New Jersey's beleaguered $34.5 billion state budget -- which is already struggling to pay for all of the education, pension, health care and other costs written into law -- would be $1. …

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