Trying to staunch Bridgegate bleeding, Governor Chris Christie, alongside Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto, this evening announced a bipartisan agreement for broad-based tax cuts and funding for the Transportation Trust Fund (TTF).
Under this plan to cut taxes for every New Jerseyan and fully fix the state’s transportation infrastructure, the average New Jersey family will see annual NET savings of several hundred or thousands of dollars in taxes and repairs, according to the Governor’s Office.
“I am pleased to present a plan that represents tax fairness for the residents of New Jersey,” said Christie. “This is the first broad-based tax cut for all New Jerseyans since 1994, which is much-needed. At the same time we are going to have constitutionally-dedicated revenue to improve roads, bridges and the mass transit systems in the state.”
The plan includes tax cuts designed to make New Jersey more competitive. The broad-based tax cuts include:
- Sales Tax Cut: On January 1, 2017, the sales tax will go from 7% to 6.875%. The following year on January 1, 2018, , the sales tax will go from 6.875% to 6.625%. A .375% decrease in the sales tax is the first statewide tax cut that has been given in New Jersey since 1994.
- Tax Savings for the Working Poor: Increase the Earned Income Tax Credit for the working poor to 35 percent of the federal benefit amount beginning in Tax Year 2016.
- Tax Savings for Retirees: Increase the New Jersey gross income tax exclusion on pension and retirement income over four years to $100,000 for joint filers, $75,000 for individuals and $50,000 for married/filing separately.
- Eliminate the Estate Tax: Phase out the estate tax over the next 15 months, replacing the current $675,000 threshold with a $2 million exclusion after January 1, 2017 and eliminating the estate tax altogether as of January 1, 2018.
- Tax Savings for Veterans: Provide a personal exemption on state income taxes for all New Jersey veterans honorably discharged from active service in the military or the National Guard.
The people of New Jersey will pay hundreds less in taxes each year while also dedicating money to roads and mass transit, Christie said. These tax cuts are estimated to save taxpayers $164 million in 2017 and when fully phased-in by 2021 an estimated $1.4 billion.
On the transportation investment side, which will remain flat, a 23-cent gas tax increase costs the average New Jerseyan between $184 and $276 per year, depending on methodology.
With a $2 billion TTF plan in full gear over the next 8 years with 100 percent of gas tax revenues constitutionally dedicated to repair and replace New Jersey roads and bridges, the average New Jersey driver will see a potential reduction of an estimated $600. The state Department of Transportation (DOT) and U.S. DOT have estimated that the average NJ driver spends approximately $600 per year on vehicle repairs caused by bad road conditions.
New Jersey families will see broad-based tax cuts that exceed the dedicated gas tax increases, the Governor said.
Forward New Jersey Chair Tom Bracken issued the following statement today regarding the announcement that Governor Christie, Senate President Sweeney and Speaker Prieto have reached an agreement on funding for the Transportation Trust Fund (TTF):
“I want to thank the Governor, Senate President and Speaker for reaching this agreement. Each showed true leadership by compromising for the greater good of New Jersey. As a result, we can now have a source of funding for the TTF that is reliable, sustainable and long-term. The benefits of such an agreement are well-known: safer roads for New Jersey residents, job creation at a time the state needs it, billions of dollars of investment that will benefit residents and businesses, and taking necessary steps to ease the tax burden of hard working New Jersey families. Every component of this plan bodes well for the future of New Jersey.
“Now that a long-term source of funding has been identified and agreed upon, it is crucial that the voters of New Jersey take the next step. On November 8, they can ensure that every single cent of the gas tax is constitutionally dedicated to the TTF. With voters saying yes to Question 2, New Jersey can, finally, have the reliable, sustainable, long-term, AND constitutionally dedicated TTF funding it has needed for decades.”
Senator Paul Sarlo and Senator Steve Oroho issued the following joint statement today in support of the agreement to renew funding for the Transportation Trust Fund:
“This is an agreement that achieves our primary goals of funding the Transportation Trust Fund with a $2 billion per-year investment that will address our vital transportation needs, put people to work and support sustained economic growth. This plan is a compromise that includes most of the targeted tax cuts we wanted to help boost economic growth and to provide tax savings for the working poor, retirees, veterans and the middle class. It builds upon the bipartisan plan that we advanced in the Senate and includes four of the tax cuts from our original proposal plus a sales tax cut.
“We’re going to put people back to work expanding, repairing and improving the quality and safety of our roads, bridges and mass transit systems. It is a dedicated, long-term solution to our transportation infrastructure crisis that will provide the needed funding for at least eight years.
“The plan includes an increase to 35 percent in the Earned Income Tax Credit for the working poor, tax deductions up to $100,000 on retirement income, a veterans’ exemption of $3,000 and a phase-out of the estate tax, which will help make New Jersey more competitive with other states.
“These are tax cuts we can manage and that will spur long-term growth, boosting the economy and generating revenue.
“This is an accomplished achievement for New Jersey’s motorists, rail and bus commuters, for the taxpayers and for the state’s future.”
Assembly Speaker Vincent Prieto (D-Bergen/Hudson) on Friday released the following statement on the agreement that has been reached to replenish New Jersey’s Transportation Trust Fund (TTF):
“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.
“This $16 billion investment over the next eight years – the largest in TTF history – is an investment in both our economy and public safety. A healthy and stable transportation network is vital to the flow of goods and services, vital to commuters trying to get to work, vital to first responders dealing with emergencies and vital to school buses trying to bring kids to school.
“From day one, I have focused on trying to bring everyone to the middle so we could get something accomplished. I’m glad this day has finally arrived and that it brings with it long-term transportation funding and much-needed tax relief.”
Assembly Republican Leader Jon Bramnick (R-Union) issued the following statement after Gov. Chris Christie announced a Transportation Trust Fund compromise with Senate President Steve Sweeney and Speaker Vincent Prieto late this afternoon.
“I applaud Governor Christie for bringing Democrat leaders in the Legislature together on a compromise to fix our roads and bridges in a way that is equally fair to our overburdened taxpayers.”
Raymond M. Pocino, vice president and eastern regional manager of the Laborers’ International Union of North America (LIUNA), issued the following statement:
“New Jersey is a transportation state. Our economy and quality of life depends of a safe and efficient transportation system, something our residents and businesses need and deserve, something that needed to get done.
“I am grateful an agreement has been made to fund the Transportation Trust Fund and thankful that people can get back to work maintaining and modernizing our transportation system; that local aid can flow to communities; and that we can start-up stalled projects and get New Jersey moving again. During the past three months I have spoke at length with Governor Christie and Speaker Prieto, and I thank them for their willingness to find areas of agreement. They found a way to responsibly fund our transportation system while also providing tax relief to New Jerseyans. They showed that compromise can happen.
“Our transportation system needs a reliable and sustainable funding source to meet New Jersey’s needs and we have it with this agreement. I congratulate everyone who had a hand in making this deal possible and look forward to it being signed into law as soon as possible. ”
New Jersey Policy Perspective VP Jon Whiten decried the plan.
“This afternoon, Gov. Christie, Senate President Sweeney and Assembly Speaker Prieto announced an agreement to replenish New Jersey’s Transportation Trust Fund for 8 years. With a long-overdue 23-cent gas tax increase, these leaders have foolishly paired a big package of tax cuts that will disproportionately benefit well-off New Jerseyans while decimating the state’s ability to pay for essential services, promised obligations and other critical investments. While it is absolutely essential that New Jersey invest in its transportation infrastructure, that investment should not be held hostage to some warped idea of so-called ‘tax fairness’ that will cost the state well over $1 billion a year. This is, quite simply, the wrong path forward for New Jersey.”
So did Analilia Mejia of New Jersey Working Families.
“As a final goodbye to the state which he has crippled to the point where it lags the rest of the nation, Governor Christie and legislative leadership have struck a massively disappointing deal in which the state stands to lose billions in the long term, siphoning critical funds from education, the environment, and all other priorities the state may have had,” Mejia said. “Ironically, both the Senate President and Speaker seem to be in opposition of their own national party platforms, which have called for a return to previous estate tax parameters instead of elimination.”