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Democrats Accuse Christie of Trying to Raise Taxes

Democrats are accusing Republican Gov. Chris Christie of trying to create new taxes, as a state senator proposes raising New Jersey’s gas tax.

(David Matthau, Townsquare Media NJ)
Gov. Chris Christie speaks at a town hall meeting in Mount Laurel on March 13, 2014.

The governor’s $34.4 billion state budget proposal for fiscal 2015 calls for imposing a tobacco tax on e-cigarettes for the first time and making out-of-state online retailers pay sales taxes for goods sent to New Jersey. Both items are listed among a handful of other provisions in the budget proposal released last month as ways to bring in $205 million by closing loopholes.

But Democrat Gary Schaer, the chairman of the Assembly Budget Committee, said the measures deserve extra scrutiny.

“If it walks like a tax and quacks like a tax, it is a new tax,” he said in an interview.

Kevin Roberts, a spokesman for Christie, said the online sales tax is not new because it’s already required for in-state businesses. Roberts said the administration would offer more details on the plans in coming weeks.

Christie, a possible 2016 presidential contender, has often boasted about adopting budgets without tax increases, and he has routinely blasted Democratic lawmakers for their calls to increase the income tax rate on high earners.

The e-cigarette proposal got attention at a budget hearing in Montclair last week, when some residents said it isn’t right to impose a higher tax on a product that some people have used to help stop smoking. A pack of conventional cigarettes has a tax of $2.70.

The online sales tax measure has not had as much public attention.

Currently, online sales to New Jersey customers are not subject to the state’s 7 percent sales tax unless the business has a physical presence in New Jersey, such as retail stores or a distribution center. Local businesses often say that structure puts them at a disadvantage.

The state did start collecting last year from the biggest online store, Amazon.com, as part of a deal struck when the company announced in 2012 that it was building its first two warehouses in New Jersey.

The U.S. Senate last year passed a bill to mandate local sales taxes on online purchases, but the House has not voted on the measure.

Mike Proto, a spokesman for the New Jersey office of the anti-tax group Americans For Prosperity, said the national group opposes the idea and believes it raises constitutional issues over whether states can regulate businesses outside their borders. But he said his office hasn’t studied the New Jersey plan in detail.

In his talks about his budget plan, Christie has focused on the state’s growing contribution to the pension funds for public workers, saying changes are needed to control those costs.

Senator Raymond Lesniak
Senator Raymond Lesniak (D-20)

The Assembly budget committee has a hearing on Christie’s plan scheduled for Tuesday in Trenton.

The budget must be balanced and adopted by July 1, when it takes effect.

State Sen. Raymond Lesniak (D-Union) told the Star-Ledger that he will propose increasing the state’s gas tax by 4-cents-a-gallon. and use it to repair New Jersey roads. The proposal echoes a similar call by Assembly Speaker Vincent Prieto (D-Hudson) of a 10-cent-per-gallon increase.

“The deterioration in our quality of life and long-term detrimental effect on our economy of a collapsing transportation infrastructure need to be fixed,” he told the newspaper. “There are no other options”

New Jersey’s gas tax is currently 14.5-cents-per-gallon, the second lowest in the country.

MORE COVERAGE:

The Associated Press contributed to this report

 

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