There are moments in our state’s history that represent a turning point. Last week was just such a moment. Governor Christie, Senate President Sweeney and Speaker Prieto reached a landmark agreement that provides critical funding for our Transportation Trust Fund (TTF), while also giving much needed tax breaks to New Jersey consumers, seniors, veterans, and the working poor. This compromise represents a significant benefit for the people of New Jersey and a positive step forward for the state.
New Jersey’s infrastructure has been in desperate need of repair. Our bridges are deteriorating, our roads are crumbling, and our rail systems are grossly outdated. The plan put forward provides the long-term, sustainable, and reliable source of funding we have long needed in our state. It raises $2 billion a year, which jumps to $4 billion when you include federal matching, over an eight-year period for the TTF. This is the largest single investment in infrastructure in our state’s history.
This long term funding will dramatically improve our ability to both fix and invest in our infrastructure. This will not only create safer commutes for New Jersey families, but will be an economic boon to the state. According to an American Road and Transportation Builders Association (ARTBA) analysis, a $2 billion level of investment in highway and bridge construction work, which is half of what New Jersey will now be able to produce, would stimulate $4.7 billion in economic input. The study also noted nearly 34,000 jobs would be directly created by this kind of investment, while 1.7 million jobs across the state are reliant on this kind of construction activity.
The ARTBA study only further proves how important this TTF agreement is. It will both protect the safety of New Jerseyans and provide the job creation and economic growth that our state needs. In addition, the compromise legislation provides for tax cuts that will help make the state a better place to work, live and retire.
The compromise plan includes a reduction in the state sales tax, increases the Earned Income Tax Credit for the working poor to 35 percent of the federal benefit amount, increases the New Jersey gross income tax exclusion on pension and retirement income for seniors, phases out the state’s estate tax, and provides a personal exemption on state income taxes for all New Jersey veterans honorably discharged from active service in the military or the National Guard. These are great steps forward for our state.
Eliminating the estate tax will relieve New Jersey of a long burdensome tax that has driven people to neighboring states for years. By getting rid of it, we will significantly mitigate the issue of outmigration in New Jersey. That will help keep more people here, paying taxes and buying goods. In fact, it may help bring people back to New Jersey.
Raising the gross income tax exclusion for seniors means a tax break for nearly 600,000 retirees. This makes our state a better place to retire, while also giving relief to those on fixed incomes. In addition, tax cuts for the working poor and veterans provide relief to those struggling to support their families and those who served our country. The sales tax reduction will benefit consumers and help make our businesses more competitive with neighboring states. Not only are these the right things to do, but they are of enormous economic benefit to the state.
This legislation shows that Trenton can achieve big things through bipartisan, cooperative compromise. Every component of this plan bodes well for the future of New Jersey. We are getting the long-term, sustainable, and reliable source of funding we have long needed for our infrastructure. At the same time, we are giving much needed tax breaks to New Jersey consumers, seniors, veterans, and the working poor. Leadership in Trenton has done their part to come up with this historic agreement. Now we need the Legislature to do their part to enact it.
Tom Bracken is the President of the New Jersey Chamber of Commerce and Chair of Forward New Jersey, a partnership of more than 75 New Jersey-based organizations advocating for a smart, robust, sustainable, and constitutionally dedicated source of funding for the TTF.