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Bipartisan Gas-Tax Hike Could Help Tank Up Transportation Funding

Democrats and Republicans appear to be open to serious discussions during lame-duck session

Vincent Prieto
Vincent Prieto with Democratic leaders at Thursday's press conference on working with the GOP to find a way to fund the Transportation Trust Fund

Serious conversations about raising New Jersey’s gas tax to head off a looming transportation-funding crisis were put on hold earlier this year, so lawmakers could focus on the Assembly elections that were just held in all 40 legislative districts earlier this week. But now with those contests in the rearview mirror, the talk in Trenton has shifted back to transportation.

Lawmakers from both parties said yesterday that they are willing to strike a bipartisan deal to renew the state’s Transportation Trust Fund, which pays for road, bridge, and rail improvements throughout the state, using revenue from the gas tax and other sources, including from borrowing.

The lawmakers also seem to be in agreement that any deal they strike on transportation funding will likely have to involve raising the state’s 14.5-cent gas tax to bring in new revenue, since all of the money coming in from the gas tax is going to pay down debt. The trust fund is also up against its borrowing limit and only has enough money to make it until the end of June 2016.

But with a lame-duck session now starting after this week’s elections -- which saw Democrats pick up four Assembly seats, widening their advantage to 52-28 -- several key questions still have to be answered. Among them: Just how much are the Republicans willing to raise the gas tax, and whether Democrats will agree to Republican demands for some other tax cut in order to win GOP support for a gas-tax hike. Also uncertain is just how eager Gov. Chris Christie will be to approve a gas-tax hike even if it has bipartisan support, since he still is holding onto hope that he can win the Republican Party’s 2016 presidential nomination. Still, there is some reason to be optimistic that the two parties will be able to find common ground and rekindle the spirit of bipartisanship that fostered passage of a 2 percent property tax cap in 2010 and legislation to reform public-employee benefits in 2011.

Democratic leaders who control the Assembly, while speaking with reporters yesterday, talked openly about wanting to work with the GOP, including on the transportation-funding issue.

“We’re trying to be realistic,” said Assembly Speaker Vince Prieto (D-Hudson). “We need to work together to do the right thing for the residents of New Jersey.”

“Our door is open to them, to come in and work with them on solutions,” added Assembly Majority Leader Lou Greenwald (D-Camden). Prieto also said reducing or phasing out a tax like the estate tax to appease Republicans remains on the table, which is something that Christie and Republican lawmakers have repeatedly mentioned throughout the year when the issue of a gas-tax hike has come up.

Assembly Republican Leader Jon Bramnick (R-Union) said in a press availability also held yesterday in Trenton that the talk of a tax tradeoff is “a good start.”

“Yes, I believe we’ll have a bipartisan bill,” said Bramnick, adding that specific details will be subject to negotiations.

And both party’s leaders also seemed to be in agreement yesterday that a robust transportation-funding initiative would be good for a state economy that is still struggling to recover all of the jobs lost to the most recent recession.

“If we get that right, we’re going to build revenues,” said Assemblyman Dave Rible (R-Monmouth).

There are also signs of hope that lawmakers in the Senate, which is also controlled by Democrats, will find common ground on the transportation-funding issue as well. They recently came together to pass a resolution supporting a plan to share costs with the federal government on a new Hudson River train tunnel. And Sen. Sam Thompson (R-Middlesex) told Politico New Jersey earlier this year that he agrees with Democrats on the need for a gas-tax hike.

But how to convince Christie, who has signed an anti-tax pledge as a GOP presidential candidate this year, to agree to a tax hike in the middle of his presidential campaign remains a big concern. When the issue came up during his monthly call-in radio show on NJ 101.5 FM earlier this week, Christie was noncommittal, saying only that he hasn’t dismissed a gas-tax hike outright.

“Everything is on the table for discussion, but it must be done in the context of overall tax fairness to the people of New Jersey,” Christie said.

When pressed by radio-show host Eric Scott whether the tax-tradeoff scenario is the only way a deal can be struck, Christie declined to offer specifics.

“There needs to be overall tax fairness to the people of New Jersey,” he said. He also said such a deal wouldn’t violate his anti-tax pledge, which allows politicians to agree to “revenue neutral” tradeoffs.

To get the estimated $1 billion in new revenue needed from a gas-tax hike to sustain transportation spending at its current level of $1.6 billion, or to get the increase in spending to $2 billion that many transportation advocates have been calling for, the gas tax will have to go up by at least 20 cents. That’s because each penny from the tax, which was last raised more than two decades ago, brings in roughly $50 million.

Prieto acknowledged yesterday that he has no idea at this point what will be acceptable to Christie, but he said there’s no way a one-for-one tradeoff could be found given the estate tax, which in New Jersey is levied on estates worth over $675,000 generates about $440 million for the annual state budget.

“That is a ridiculous statement,” Prieto said about a revenue-neutral tradeoff.

There’s also the question of how committed Christie will be to solving New Jersey issues as long as he remains in the hunt as a presidential hopeful. Christie is pushing hard right now in New Hampshire, where the primary won’t be held until February.

Christie's campaign was dealt a blow last night since his showing in recent national polls didn't register high enough to meet the threshold for a slot in the GOP's next primetime debate, which will be held on November 10 and aired on the Fox Business channel.

“Obviously, you all know he has other priorities at this time,” Prieto said.

Christie’s office did not respond to a request for comment on the transportation-funding issue yesterday.

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