Talk at Summit Hints at Compromise on Gas-Tax Hike If Tradeoffs Can Be Found

But bipartisan differences still must be resolved, and any bill raising surcharge on gasoline must be signed by Christie, who has taken anti-tax pledge

Assembly Republican Leader Jon Bramnick (R-Union).
New Jersey business leaders came away from a two-day summit in Atlantic City with high hopes for an improved dialogue with state lawmakers, and with a better understanding of how those lawmakers could eventually resolve one of the state’s most pressing concerns — the nearly broke Transportation Trust Fund.

But transportation funding was just one of the key issues that business leaders raised. The summit, organizers said, was also intended to give the business community the opportunity to air concerns about taxes, workforce development, and regulation — the same issues that dominated a recent survey conducted by the state Chamber of Commerce.

Attendees also got to see up close the partisan differences that have dominated Trenton in recent years. And, as has been the case for much of the summer, there was no sign at all of Gov. Chris Christie as he continues to travel the country in pursuit of the GOP’s 2016 presidential nomination.

Given that it’s on course to run out of money in about nine months, the state’s TTF was understandably the most pressing order of business at the New Jersey Chamber of Commerce’s business summit at the Borgata Hotel & Casino.

Assembly Minority Leader Jon Bramnick (R-Union) raised eyebrows during a legislative forum on Friday when he said that he is “ready to vote for a tax increase on gas today.”

That’s an idea Republicans in the state Assembly haven’t widely embraced during a year that will see all 80 Assembly seats up for grabs in November. Yet unless New Jersey’s 14.5-cent gas tax is increased, there will only be enough money coming in to pay off the trust fund’s debt after June 30, 2016, with no cash left over for any new projects.

So Bramnick’s comments drew considerable attention, even as he quickly inserted a caveat: His support for raising the gas tax is based on the condition that some other state tax, like the estate and inheritances taxes, be cut at the same time.

“I’m so happy to hear that John is ready now for a gas tax,” said Assembly Speaker Vince Prieto (D-Hudson), who added that he’s “willing to negotiate” the details of a tax tradeoff with Bramnick.

Senate President Stephen Sweeney (D-Gloucester) also weighed in, saying he agrees that New Jersey’s estate and inheritance taxes — Maryland is the only other state that levies both — need to be loosened, which is something the business community has long sought.

“This has to be done. Period. We all agree,” he said.

And Sweeney said that an increase of the gas tax could be written “so tight” that taxpayers would be assured the new revenue would go only to road, bridge, and rail upgrades. The suggestion drew immediate applause from the estimated 500 business leaders who attended the event.

“If you do exactly what you say, and do exactly what you say you’re going to do with (the revenue), then people will trust you a little bit,” Sweeney said.

But the highlight for the business leaders was a closing promise from lawmakers that they would maintain a regular and open dialogue on issues important to the business community.

“I think we made some history here and I think we have a pathway to make things better for us,” said Tom Bracken, the chamber’s president and CEO. “There’s a brighter future out there for all of us.”

Still, amid the optimism, the legislative forum also demonstrated that leaders in Trenton still have a lot of work to do to resolve all of their partisan differences. Though controlled by Democrats, the majorities in both the Senate and Assembly are not large enough to overcome a Christie veto.

So when asked what one thing they would wish to change, Senate Minority Leader Tom Kean Jr. (R-Union) immediately said “a Republican Legislature.” Not to be outdone, Prieto fired back: “A Democratic governor.”

[related]The leaders also bickered openly along party lines about the grossly underfunded public-employee pension system, another major problem where Republicans and Democrats remain far apart in Trenton. Bramnick made a pitch for sweeping changes that Christie, a second-term Republican, is pushing for, including freezing the current pension system and offering public workers less generous health benefits.

“These are the tough issues that, in my judgment, we have to talk about if we’re going to make this state more affordable,” Bramnick said. “It’s not personal, it’s survival.”

But Prieto responded by saying the problem with pension funding is not on the employee side since a 2011 law already increased worker pension contributions. Instead, he said the issue is state government’s record of making little or no employer contributions into the retirement system over the last two decades.

“If that money would have been put into the pension system then we wouldn’t be talking about this,” Prieto said. He also said Bramnick has to start viewing public workers as people “and not just numbers.”

And even on the issue where they found common ground – the need to increase the gas tax while also addressing estate and inheritance tax policy – the forum also showed how difficult reaching a final agreement will be.

As much as $2 billion in annual revenue is needed to maintain infrastructure while also investing in new projects like planned light-rail expansions in North Jersey and South Jersey. But the combined annual revenue that comes in from the estate and inheritance taxes is roughly $755 million, meaning there’s no way there could be an equal tradeoff between the two.

And taking any additional revenue out of the state’s general fund would likely draw more attention from Wall Street credit-rating agencies already concerned about a huge unfunded public-employee pension liability and a state economy that, despite some recent signs of improvement, is still fighting to recover from the most recent recession. New Jersey already has the second-lowest credit rating in the country, behind only Illinois.

Any deal on the gas tax would also need to be approved by Christie, who in recent months has largely put issues important to New Jersey on the backburner as he campaigns. And Christie — who did not attend either day of the business summit — has been moving further to the right as the GOP primary season unfolds, including signing an anti-tax pledge as a presidential candidate that he did not endorse while running for governor in 2009 and 2013.
“It has to be a bill that the governor will sign,” reminded Prieto.