Following a full day of negotiations Monday, Governor Chris Christie and state Assembly Speaker Vince Prieto (D-32) reached a deal on a new proposal to fund the ailing Transportation Trust Fund with a gas tax increase in exchange for a winnowed-down sales tax. The move came after months of wrangling from Democrats, who had a bill ready that would have phased out the estate tax and offered several additional tax breaks.
With that bill from Senators Paul Sarlo (D-36) and Steve Oroho (R-24) scrapped in the Assembly, Christie said in a statement Tuesday that he believes the new plan meets his criteria of “tax fairness” and that he hopes the deal succeeds in the Senate on Thursday.
“I am pleased that the Assembly has heeded my suggestion for tax fairness, which I have been calling for for a long time,” Christie wrote. “This is the first broad-based tax cut for all New Jerseyans since 1994. It is much-needed while at the same time we are going to have constitutionally-dedicated revenue to improve roads, bridges and the mass transit systems in the state.
“After the action the Assembly took, I look forward to working with the Senate between now and Thursday to hopefully bring this issue to a successful conclusion.”
Prieto chose to go back to the bargaining table with Christie rather than hold out hope for a veto-proof majority in the Democratic-led lower house. The previous deal had been a bridge too far for Republicans who believed the proposed estate tax cut would not do enough over its five-year phase-out period, and for Democrats leery of paving the way for a phase-out without adequate TTF funding.
The new bill, which would reduce the sales tax from 7 percent to 6 percent by 2018 in exchange for 23 cents more in taxes per gallon of gas, passed by 53-23 in an Assembly vote last night. The new 37.5-cent gas tax would go toward funding the Trust Fund, and ramping it up from $1.4 billion to a round $2 billion.