Why both conservatives AND liberals are against proposed NJ gas-tax plan
A plan to hike New Jersey’s gas tax and enact a handful of offsetting tax cuts was bashed Wednesday by lawmakers and interest groups from both sides of the political spectrum.
Republican Sens. Jennifer Beck and Michael Doherty stood with Americans for Prosperity and the National Federation of Independent Business at a Statehouse news conference to condemn an increase in the gas tax estimated at 23 cents a gallon, part of a plan to raise a projected $1.4 billion in taxes.
“It is palpable, the growing opposition and anger, that our residents have to the idea that in a highly taxed state we would raise their taxes yet again,” Beck said.
Minutes later, Sen. Raymond Lesniak and Assemblyman John Wisniewski – former Democratic Party state chairmen and 2017 gubernatorial aspirants – and a bevy of liberal groups said the Transportation Trust Fund plan’s fatal problem isn’t the gas tax but rather an eventual elimination of the estate tax, paid by wealthy estates and generating over a half-billion a year for the state budget.
“One could say that I have hoped in the worst way that we would raise the gas tax,” said Wisniewski, chairman of the Assembly transportation committee. “And my hopes have come true, because we are going to do it in the worst way.”
“This compromise is not a compromise. It’s a capitulation,” Lesniak said.
The package calls for spending $2 billion a year on road, bridge and rail projects for 10 years. Three-fourths of that $20 billion would be borrowed, paid back through tax hikes that would also affect jet fuel.
It would be accompanied by tax cuts worth more than $840 million annually once fully phased in over four years. In addition to estates, taxes would be cut on retirement income. Tax deductions would be created for charitable donations and gas taxes. The working poor would get a larger tax credit.
“All of those things are great ideas. But you do not raise taxes to lower taxes,” Beck said.
Doherty said lawmakers are missing an opportunity to clamp down on what the state spends on road construction.
“The people of New Jersey are being told safe roads, safe bridges. What they’re not being told is that the folks in Trenton already have plans to divert a lot of this money for major, billion-dollar plus light rail projects,” Doherty said.
“Before the money is even replenished, we already have the vultures in Trenton circling,” he said.
Mayor James Kern of Pohatcong, a Warren County township along the Delaware River, said he’s concerned that Pennsylvania residents will stop hopping across the border to buy gas in New Jersey.
“The real trigger for them to come over is the low gas price,” Kern said. “When we are now going to be raising this gas tax to potentially being the seventh highest in the nation, being Exit 3 on (Route) 78, the first exit when you come into New Jersey, we’re going to lose that major incentive that our shoppers are coming into our municipality for.”
New Jersey’s gas tax would rise to 37.5 cents a gallon, under the plan, still almost 13 cents below Pennsylvania’s tops-in-the-nation 50.4 cents.
Labor and environmental groups joined Lesniak and Wisniewski in ripping the plan to eventually eliminate New Jersey’s estate tax. They said the state can ill afford the lost revenue, which is paid by estates following about 5 percent of deaths each year in New Jersey. It currently applies to estates worth $675,000 or more, the lowest threshold among the states.
“We call on all legislators to please not be held hostage by the governor on this fiscally irresponsible demand,” said Analilia Mejia, executive director of New Jersey Working Families.
“If this deal goes through, what we’re saying is that we value the inheritors of the 4,000 wealthiest estates in New Jersey more than we value everyone else,” said Ann Vardeman, program director for New Jersey Citizen Action.
“This is a tax on Chevy drivers while we’re giving a tax cut to Rolls Royce owners,” said Jeff Tittel, executive director of the New Jersey Sierra Club.
The scene was peculiar, with Democrats and Republicans, labor and business, sort of aligned in opposition to the TTF plan, albeit from different perspectives. It remains to be seen whether the issue will be salient in the 2017 gubernatorial and legislative elections, including the primary.
“Especially going into next year, I think you’re going to see a lot of talk about: What are these Republican senators and Assembly people doing? They’re betraying their own constituents, who have been taxed out of the state,” said Erica Jednyak, state director for Americans for Prosperity.
For all the fury, it’s not clear that the criticism can block a plan that looks to be on the fast track for approval.
It has bipartisan support, although Assembly Speaker Vincent Prieto hasn’t committed to all the details. He has indicated a willingness to include the estate tax. Gov. Chris Christie’s biggest complaint to date is that the estate tax should phase out by the end of 2017, rather than the end of 2019 as planned.
Beck and Doherty said two other Republican senators – Gerald Cardinale and Christopher Connors – opposed the TTF plan as well. With Lesniak also opposed, that’s five out of 40.
To block the bill from passing the Senate, 20 people would have to be opposed. To prevent the plan from having a veto-proof majority, 14 would have to be opposed – on the chance it’s rejected by the governor, at which time another vote in the Senate could be held.
In the Assembly, a bill needs 41 of 80 votes to pass and 54 of 80 to overcome a possible veto.