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Back in NJ, Will Christie Cut Deal on Transportation Trust Fund, Gas Tax?

Governor’s recent remarks on campaign trail indicate he won’t raise gas tax, but lawmakers think the topic is on the table

Credit: NJTV News

Now that Gov. Chris Christie has ended his bid for the GOP’s 2016 presidential nomination, all eyes in Trenton are focusing on what he plans to do about New Jersey’s Transportation Trust Fund, which is deep in debt and on course to run of money in June.

Will Christie work with Democratic legislative leaders and increase the state’s gas tax to replenish the fund, employing the same cooperative spirit he used to strike bipartisan deals on other major issues like public-employee benefit reform?

Or will he come back hardened by the experience of a presidential party primary and focus even more on partisan politics as another run in 2020 or even a slot as a 2016 running mate still remain as possibilities?

To some, Christie, a second-term Republican, offered a hint last week during a campaign event in New Hampshire that his position on the gas tax has now hardened. But the Democratic legislative leaders say they’re still ready to negotiate a solution with him, brushing aside any of the rhetoric from the campaign.

New Jersey’s Transportation Trust Fund pays for more than $3 billion in annual road, bridge and rail improvements counting federal matching dollars. And though Christie has repeatedly downplayed the issue, due to the trust fund’s significant debt there will no money available for new projects as of July 1.

With Christie scheduled to put forward a new state budget on February 16, the status of the transportation fund was a major topic in a notice that Moody’s Investors Service, one of the major Wall Street credit-rating agencies, recently sent out to investors.

The transportation-funding issue was also raised last week by municipal officials, who rely on money from the Transportation Trust Fund to help maintain local roads. Without the state funding, they say, the burden will fall to homeowners who are already paying the highest average property-tax bills in the nation.

To many, the likely solution to the problem is an increase of the state’s 14.5-cent fuel tax, which includes a 10.5-cent per-gallon levy on gasoline and a 4-cent tax on gross petroleum products that is passed along to motorists paying at the pump. For months, Christie has said a gas-tax increase is “on the table.” He’s also signaled to lawmakers previously that he wants to establish more “tax fairness” in New Jersey, hinting at a willingness to entertain some form of a gas-tax increase if they would consider reducing some other tax, such as New Jersey’s estate tax.

But when he was pressed at a town hall-style meeting in New Hampshire last week by someone who said he was forced to leave New Jersey due to high taxes, Christie, according to a NJ Advance Media report offered a response that some perceived to be a stronger.

"I'll tell you what I'm not going to do, I'm not going to increase the gas tax while you're sitting here and complaining to me about every other tax being too high,” Christie said.

He did not include the “tax fairness” caveat, though some have interpreted the statement to be a reference to that option as well. Christie’s office did not respond when offered chances this week and last week to clarify what his position on the gas tax is and if it has changed.

But Assembly Speaker Vincent Prieto (D-Hudson) said in an interview with NJ Spotlight that he isn’t putting too much stock in Christie’s recent comments on the gas tax because of the context. They came in the final days of a last-ditch attempt to win the New Hampshire primary, Prieto said.

“He does know that we are running out of money,” Prieto said. “That’s been said, and that’s a fact.”

“I take comments like this with a grain of salt,” he said.

Christie is now home from New Hampshire after finishing outside of the top five on Tuesday, and with his campaign now suspended, presidential politics are no longer an immediate concern.

But he is also facing pressure back home to find a way to renew the trust fund without hiking the gas tax, which is the second lowest among U.S. states.

Sen. Jennifer Beck (R-Monmouth) put forward a renewal plan that would extend the trust fund for another seven years without a tax increase. Instead, her plan banks on more than 3 percent annual growth in state-tax collections and new revenue from increased fines for motor-vehicle offenses like drunk driving and texting while driving.

The state chapter of the conservative group Americans For Prosperity is also firmly against hiking the gas tax, said Erica Jedynak, the organization’s state director. Instead, her group would like to see current state transportation spending more closely scrutinized and engineering assessments done to determine which projects are really priorities.

“Let engineers decide that,” Jednyak said.

She also pointed to the corporate tax-incentive programs operated out of the state Economic Development Authority as a lower priority than repairing the state’s transportation infrastructure. Roughly $6 billion in corporate tax breaks have been pledged during Christie’s tenure, which began in early 2010.

“It takes away from some functions of government like road repair, like bridge repair,” Jedynak said.

For his part, Senate President Stephen Sweeney (D-Gloucester) said he’s ready to talk about the issue of tax fairness and the estate tax, which Christie said during his State of the State address last month should be repealed. New Jersey is one of only two states to levy taxes on estates and inheritances, and at $675,000, New Jersey’s estate-tax threshold is lowest among all states.

Sweeney said Democrats are also serious about easing the state income-tax burden on retirement income like pensions, 401Ks, annuities, and IRAs.

A bill introduced earlier this month by Sen. Paul Sarlo (D-Bergen) would phase in an increase of the state’s current income-tax exemptions for retirement income, which are $15,000 for a single taxpayer and $20,000 for a married couple filing jointly. Under Sarlo’s bill, the exemptions would eventually be increased to $75,000 for a single taxpayer, and to $100,000 for a married couple filing jointly.
“There’s been some bad tax policy over the years and some of it needs to be reversed,” Sweeney said while taking questions from reporters in the State House earlier this week.

And though some liberal groups have opposed coupling an increase of the gas tax with other tax-policy changes, such as a phasing out the estate tax, Sweeney said those changes need to be made regardless.

“If that’s what (Republicans) need to say, ‘OK, let’s do this,’ what the hell do we care,” Sweeney said.

Still, it all depends on what Christie decides he wants to do.

“I’m interested to find out his solution,” Sweeney said.

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