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Christie Derides Bipartisan Gas-Tax Hike as ‘Payoff’ to Counties and Towns

With the governor’s approval ratings at a record low, how much will lawmakers really care what he thinks?

Gov. Chris Christie yesterday roundly criticized a proposed 23-cent gas-tax increase that’s at the heart of a bipartisan plan put forward by lawmakers rushing to head off the pending expiration of the state’s Transportation Trust Fund (TTF).

The governor also labeled the plan as a “payoff” because it would double transportation aid for local governments to help ease county and municipal officials’ reliance on property taxes for maintaining local roads and bridges.

Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex), who last week rolled out the sweeping proposal to replenish the TTF before financing for it expires at the end of the month, held their own public event yesterday. At a news conference in the State House, they picked up the endorsement of a key Republican lawmaker and influential business and other groups. That event also served to demonstrate support is building for their plan.

Even as Christie’s attack revealed areas where lawmakers could tweak their proposal to possibly gain the governor’s support, it’s unclear if his thoughts really matter. Christie faces record low approval ratings among New Jersey voters right now, and key legislative leaders say they are working hard to get enough votes from both sides of the aisle to withstand a gubernatorial veto. Whether those votes will be there at the end of the month remains to be seen.

At issue is how the state will maintain spending on road, bridge and rail-network projects once the current, five-year, $8 billion TTF finance plan runs out on June 30.

Republican Sen. Jennifer Beck of Monmouth County has proposed a 7-year TTF renewal that would maintain $1.6 billion in annual spending using new borrowing, revenue carved out from the annual state budget and projected savings from consolidating transportation agencies and cutting employee healthcare plans. Christie, a second-term Republican, has said her plan deserves serious consideration.

Sarlo and Oroho have proposed a 10-year, $20 billion TTF renewal that involves raising $1.36 billion in annual revenue from fuel-tax hikes. Their goal, the senators said, is to boost the broader New Jersey economy by improving the state’s crumbling transportation infrastructure while also providing more state transportation dollars to local governments to ease the burden on local property taxes.

The Sarlo-Oroho plan also proposes tax cuts designed to make New Jersey more affordable, particularly for seniors and low-wage workers who would be hit hardest by the planned fuel-tax hikes. That’s because the tax increases, though they would be levied at the wholesale level on petroleum products, would likely be passed along to motorists at the pump.

The senators estimate their plan would raise the state’s gas tax from 14.5-cents per gallon to 37.5 cents. New Jersey’s gas tax, which hasn’t been raised since 1988, would still remain lower than those levied in neighboring New York and Pennsylvania.

Christie, during a morning speech before the Morris County Chamber of Commerce in Whippany yesterday, took aim at the size of the proposed gas-tax hike and the overall spending that’s called for by Sarlo and Oroho. He warned the business leaders present to “look at the fine print.” He noted that, in addition to tax hikes on motor fuels, the bipartisan plan included tax increases that could impact businesses -- increased taxes on jet fuel and diesel as well as new annual registration fees for electric vehicles that would cost individuals $150 and businesses $300.

“The fine print is important,” the governor said. “All of that money, every dollar is yours, it’s yours, not mine, not ours, it’s yours.”

Christie questioned the senators’ plan to double state transportation aid for local governments from $200 million to $400 million. He said he suspects that element of the proposal is aimed instead at making sure mayors and county government leaders endorse their overall plan. “It’s payoff to protect their political backsides,” Christie said. “Don’t let them fool you that it’s property tax relief,” he said. “Please, they’ll just pave more.”

Municipal and county governments are responsible for maintaining more than 80 percent of the roadway miles in New Jersey, and nearly 40 percent of all bridges. With state property tax bills at a record high, Sarlo and Oroho say boosting state transportation aid could help provide some property tax relief.

Christie also took issue with tax cuts proposed in the broader Sarlo-Oroho plan, saying there aren’t “nearly enough for my taste.” He said, “That’s a discussion we’ll be having in Trenton over the next few weeks.” Zeroing in on a proposal to phase out New Jersey’s estate tax by the end of 2019, Christie said it should instead be eliminated by the time he leaves office in early 2018 to ensure Democrats don’t change their minds.

Other tax cuts in the Sarlo-Oroho plan include lifting state income-tax exemptions on sources of retirement income like pensions and 401(k) plans; increasing the Earned Income Tax Credit for low-wage workers from 30 percent of the federal credit to 40 percent; creating a new state income-tax deduction for contributions to in-state social service charities; and establishing a similar income tax deduction for those who would pay gasoline taxes worth more than 1 percent of their adjusted gross income.

The governor’s comments were applauded by Laurie Ehlbeck, state director of the National Federation of Independent Business. “Legislators are attempting to distract the public from a massive gas tax increase with incentives in other places. However, the small business community maintains that a gas tax increase of this magnitude will disproportionately impact the most vulnerable of employers in New Jersey,” she said.

Lawmakers may not have much incentive to work with Christie on changes that could ultimately win his support. The governor has seen his approval ratings drop to record lows among New Jersey voters in recent months; survey results released earlier this month by Monmouth University’s Polling Institute showed just 26 percent of New Jersey’s registered voters approved of his job performance.

At their State House news conference, Sarlo and Oroho picked up support from representatives of a wide array of influential groups ranging from business and labor to transportation advocacy organizations and public accountants.

“While no one likes to see any kind of taxes raised, the reality is that a hike in the state's gas tax, the second lowest in the nation, is the only long-term viable option for ensuring that our roads, bridges and rail systems are repaired and maintained in safe operating conditions,” said Ralph Thomas, chief executive of the New Jersey Society of Certified Public Accountants. Also appearing during the event to endorse the bipartisan TTF proposal was Sen. Joe Kyrillos (R-Monmouth). The highly respected veteran lawmaker ran for U.S. Senate with Christie’s endorsement in 2012, but lost to incumbent Democrat Robert Menendez. His support suggests a veto-proof majority could be in reach, at least in the Senate.

“This is one of the most important legislative initiatives in recent history because it addresses our most demanding needs with a balanced, detailed plan,” Kyrillos said. “As presented, this is a detailed plan that incorporates different approaches with a shared goal of improving the infrastructure, boosting the economy and reducing taxes.”

Later yesterday, Assembly Speaker Vince Prieto (D-Hudson) issued a statement expressing his interest in working with Assembly Minority Leader Jon Bramnick (R-Union) and counterparts in the Senate to move TTF legislation out of the Legislature by the end of the month.

“I’ve been discussing the need for replenished transportation funding for more than two years, so I’m very pleased to finally see this progress,” Prieto said.

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