It’s a slightly different tally than the one touted by state officials, but according to New Jersey Policy Perspective, a liberal think tank, the cost of tax cuts and credits approved in the Transportation Trust Fund package will be $1.4 billion. Basically, the TTF, which was signed into law by Gov. Chris Christie late last week, calls for a 23-cent tax increase to raise $1.2 billion to pay for transportation capital projects but cuts $1.4 billion from an already stretched annual budget.
NJPP says that 45 percent of the $1.4 billion is due to the sales tax cut from 7 percent down to 6.875 percent the first year and 6.625 percent the second. On average, this will save New Jerseyans $99 a year, according to NJPP. (Most lawmakers believe the cut will never take place, since a new governor will reverse course rather than blow such a big hole in the annual budget.)
A retirement income exemption will consume 9 percent of the $1.4 billion, as retirement income between $10,000 and $100,000 will be exempt. It means an average tax cut of approximately $670 for those who are eligible.
The elimination of the estate tax represents 39 percent of the cost, costing $562 million. Expanding the earned-income tax credit will account for 5 percent of the tax cut.
Veterans will also see a tax cut, which will cost about $320,000 or 2 percent. The average cut in this category will be $105.