By David Cruz
Waiting for lawmakers to come up with a solution on how to fund the state’s Transportation Trust Fund can be exasperating. It’s well established that our aging mass transit system is groaning under the weight of millions of weekly commuters, and our roads and bridges are, well, crumbling. But with the Transportation Trust Fund due to run out of cash early next year, legislative leaders said this week that the terms of a deal are finally coming together.
“We’re willing to put a tax fairness plan on the table,” Senator Paul Sarlo said this week. “I think it was loud and clear today about phasing out the estate tax, be left with the inheritance tax, raising the retirement income and making a significant investment in the infrastructure through the gas tax.”
“Tax fairness”. It’s the code Governor Chris Christie has used to advocate for tying a gas tax increase to cuts in the state’s inheritance and estate taxes, which the governor has said repeatedly is hurting the state’s economy.
“We lose thousands and thousands, tens of thousands of citizens every year as they age, because as friends of my parents said to me a few years ago: It’s not that I can’t afford to live here; it’s that I can’t afford to die here,” Christie said in Whippany recently.
Sarlo said he has the 41 votes needed to pass a palatable package. But some lawmakers say the deal sounds better than it actually is. The gas tax, if it’s increased a dime, would raise about $500 million, but that money would be dedicated exclusively to transportation, none for the state budget. The inheritance and estate taxes generate about $750 million a year. Take that out of the state budget and you’ve just added $750 million dollars to the deficit. How does that add up?
“First and foremost, there would not be a loss of revenue,” explained Senator Tom Kean, Jr. “What we have seen in the state of New Jersey already. If you look at any study, over a period of five years, the second the estate tax went in, $70 billion left the state of New Jersey to go other places in the country. That $70 billion of wealth is being taxed in other places. That’s not decreased wealth; that’s not market downturn; that’s actual wealth. If that wealth had stayed in New Jersey, rather than being driven out, that would be $2 billion of extra income on an annual basis coming to the state of New Jersey.”
Kean’s math is pretty standard Republican fare, but critics warn that theoretical revenue doesn’t pay the bills. None the less, this appears to be the deal on the table. So, how done is it?
“I predicted from day one that when there’s a crisis, government does OK and we’re close – you know, the next three to four to five months we’ll have that crisis,” admitted Assembly Minority leader Jon Bramnick. “You have to start somewhere. Based on the prior discussions last year, they were polar opposites, right? So I have to give credit to Sarlo and the speaker that, OK, we’re off first base.”
Bramnick stretched the baseball analogy to include Christie as the pitcher and all the other players on the field looking at him to throw the damn ball already.