Following a late-night vote Monday that saw a new deal for funding the Transportation Trust Fund pass in the state Assembly, Democrats in the Senate are largely staying mum on that proposal to raise the state’s gas tax in exchange for reductions to the sales tax. A Senate bill had been in the works to phase out the estate tax in a bid to satisfy Governor Chris Christie’s stated criteria of “tax fairness,” and support for the new bill could be thin.
The two bills, which would both raise the price drivers pay at the pump to 37.5 cents per gallon and raise about $1.1 billion in revenue annually toward the ailing Trust Fund, are likely to go head to head on the Senate floor Thursday. If Christie and both houses of the legislature can’t come to a consensus before Friday, the Trust Fund will go bankrupt and work on the state’s roads and bridges will come to a halt while they hash out a compromise.
The bill is the result of Assembly Speaker Vince Prieto (D-32) going straight to Christie on Monday to reach a new compromise. That decision may have prevented another situation like the disastrous, cancelled Assembly vote on Prieto’s version of a bill to take over Atlantic City in May.
“This will mean that we will put money into the hands of the people that need it the most, so they’ll be able to have an economic impact a lot quicker than the bill that we were trying to do before,” Prieto said of the sales tax cut.
“And then we will actually be funding our Transportation Trust Fund that will be able to invest on our road infrastructure to be able to put people back to work and spur our economy by them being able to have more buying power.”
Sources close to the Speaker said that Prieto did not see a clear path to a veto-proof majority, and chose to appeal to the governor rather than see the gas tax bill die a similar slow death by desertion on the day of the vote.
Senate sources, meanwhile, said they expect their caucus’ support for the previous TTF bill from Senators Paul Sarlo (D-36) and Steve Oroho (R-24) will be unwavering on Thursday. Senate President Steve Sweeney told PolitickerNJ Tuesday that he still needs to take a closer look at the new bill, which would cost the state $1.6 billion to $1.7 billion more in lost tax revenue.
The Prieto-Christie compromise and the late-night Assembly vote that rushed it through have seen a heavy share of criticism from both sides of the aisle, with Senator Loretta Weinberg (D-37) saying she doubts she will be able to reconcile the urgent need fund the TTF with those deeper revenue losses.
“For now I would say the Senate is not supportive because the numbers don’t add up,” Weinberg said, citing Democrats’ effort to constitutionally mandate quarterly pension payments, which also passed in the Assembly that day. “We can’t do both of these things. The numbers don’t lie.”
Though the bill passed in the Assembly was in part an effort to give Republicans in that house some political wiggle room with deeper tax cuts, Assemblyman Jay Webber (R-26) denounced the gas tax increase despite those appeasements. Senate Republicans who have come to support the estate tax phase-out plan could also be reluctant to support the new bill.
“This State Street ‘deal’ is an instant $850 million tax hike on overtaxed Main Street New Jerseyans, with as much as $4.8 billion more in tax hikes coming in the next few years,” Webber wrote in a statement.
Meanwhile, left-leaning research group New Jersey Policy Perspective predicted that gains for the Trust Fund would pale next to either plan’s effect on tax coffers.
“This proposal, on the surface, is a fairer plan, in that it’s not a tax shift primarily from the wealthy to the working- and middle-class,” wrote NJPP’s Jon Whiten. “But that advantage evaporates as soon as the gaping budget hole causes New Jersey to cut vital services, lay off employees or shrink the social safety net.”