BUSINESS & ECONOMY

Lawmakers Debate Raising Gas Tax to Support Transportation Trust Fund

A milestone in the effort to replenish the fund for roads and bridges. And it could cost you plenty. Dueling Senate and Assembly committees worked against the clock to get a complex cluster of tax hikes and tax cuts to Christie’s desk before time runs out. NJTV News Chief Political Correspondent Michael Aron is standing by at the State House.

Aron: Mary Alice, we’re outside the Assembly Budget Committee room on the fourth floor of the State House Annex. The committee is in session behind me. They are taking up the two Transportation Trust Fund bills that make for the renewal package. Earlier today, the Senate Budget Committee took testimony on those two bills. It then broke in order to join a full Senate session, which is winding up just about now. The Senate Budget Committee will go back into session this evening and presumably also vote on the Transportation Trust Fund bills. Here’s where the issue stood at midday:

Senate Budget Chairman Paul Sarlo, a chief co-sponsor, conceded that almost tripling the gas tax is a difficult vote but argued that the state’s infrastructure and ultimately its entire economy demand it.

“I have business leaders, I have labor leaders coming together supporting this bill. Again, a difficult vote for many people to raise the gasoline tax. I understand that. But we’ve been elected to lead,” he said.

The bill has a Republican co-sponsor, Sen. Steve Oroho, so Democrats say it’s a bipartisan bill. In fact, it has been unclear whether other Republicans will support it.

The two-bill package would reauthorize the fund for 10 years at $2 billion a year.

It would raise the gas tax 23 cents a gallon, from the current 14.5 cents.

To entice Gov. Chris Christie’s support, it would provide for offsetting five tax cuts:

– A four-year phase-out of the estate tax
– An increase in the earned income tax credit for the working poor
– A break for seniors on retirement income
– A new tax deduction on charitable contributions
– A gas tax deduction for those hit hardest by the increase

“I never really wanted obviously to be raising any taxes. I look at this as a complete major, major restructuring. This is not a tax increase. This will be a major tax shift,” Oroho said.

Proponents of the bill talked about making an investment.

“For the price of less than a coffee a week at Starbucks, we’re going to get investment in our infrastructure. We’re going to bring tax relief to retirees, those on a lower economic ladder through the Earned Income Tax Credit, we’re helping our charitable organizations here in the state, estate tax relief and property tax relief,” said Utility and Transportation Contractors Association CEO Robert Briant.

But the bill has critics from the right and the left. The right objects to the gas tax hike.

“You have 2 million people or more living in abject poverty who must drive to work. They have no other options. They are going to have to pay this tax,” said Sen. Jennifer Beck.

The left says phasing out the estate tax helps the wealthy at the expense of everybody else and the state budget.

“To take up to a half billion dollars in gifts to the wealthiest 3 or 4 percent of the state when we are so far behind makes absolutely no sense,” said New Jersey Policy Perspective President Gordon MacInnes.

“This is tax on Chevy owners, a tax cut for Rolls Royce owners, a tax increase for Tesla drivers, and at the end of the day, this is an Edsel,” said New Jersey Sierra Club President Jeff Tittel.

“Kick the can down the road another two years. We’ve been kicking the can down the road for 20. Why not two more, so that in two years when we have a different governor we can do this right?” asked Dena Mottola Jaborska, associate director of New Jersey Citizen Action.

Over in the Assembly Budget Committee, the two party budget officers awaited the outcome of the Senate committee’s action.

“My expectation would be that based upon support which we expect and look forward to from the Republicans, that we will see the bill’s passage,” said Assemblyman Gary Schaer.

“I’m keeping an open mind. There’s a lot of moving parts still going on. I think the parts will continue to move. So I’m likely to abstain on the bills today,” said Assemblyman Declan O’Scanlon.

The laborers union was out in force in both committee rooms.

“Look at our state infrastructure. It’s not the greatest. We’ve done a lot of great improvements. But there’s a lot of work to be done,” said Jaime Machado of the Laborers’ International Union of North America.

Republican Sen. Sam Thompson proposed a compromise — hike the gas tax 11 cents now and 2 cents a year going forward.

Sarlo replied, only what’s on the table can pass.

“I’ve not seen one proposal in the 14 years that I’ve been here than can get the necessary votes to renew the Transportation Trust Fund,” Sarlo said.

Aron: Now it’s expected the Senate Committee and the Assembly Committee will approve the trust fund bills tonight. It would then go to the floor of both houses next week. It’s unclear how many Republicans will support these bills either in committee or on the floor next week, but the Democrats can send these bills to Gov. Christie and again that’s a big question. What will the governor do? He might veto the bill, he might conditionally veto the bill and seek a couple of changes. The remarkable thing about today is that completely overshadowing all of this is that the budget bill itself is up for votes in both committees. The Assembly Budget Committee approved a Democratic budget. The Senate Budget Committee is expected to do the same.