Lawmakers: We’ll hike gas tax 23 cents … without Christie’s OK

Above: Gov. Chris Christie rips into New Jersey 101.5 host Bill Spadea for his opposition to a plan to raise the gas tax. Lawmakers now say they'll OK a different plan Christie rejected — without his approval.

It appears leading Democratic lawmakers are returning to Plan A for the Transportation Trust Fund: Pass a gas-tax increase despite the opposition of Gov. Chris Christie.

Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto on Friday morning announced they had reached agreement on a series of tax cuts to enact along with a 23-cent a gallon hike in the gas tax. A Senate committee will vote on it next week.

The blueprint was announced one day after Christie finally conveyed a counteroffer to a plan Sweeney brought to him last week, which the governor dismissed as ridiculous. The details of Christie's latest offer haven't been revealed, but lawmakers are going in another direction.

In the announcement, Prieto says "efforts to negotiate a compromise with the governor (are) stalled."

The tax-cut side of the package includes features familiar to an earlier bipartisan agreement — phasing out the estate tax, excluding more retirement income from taxes and boosting a tax credit for the working poor.

It also includes two additional cuts. One is an annual income tax deduction on up to $500 in state gas taxes paid by motorists with incomes up to $100,000. The other is a $3,000 personal exemption on state income taxes for New Jersey veterans honorably discharged from active service in the military, including the National Guard.

Christie's press secretary, Brian Murray, didn't reject the proposal immediately but noted the governor didn't receive anything directly from the lawmakers about it, only the "vague generalities" from a press release.

“The Senate president and the Assembly speaker must be more interested in publicly pretending that they have accomplished something on TTF before they go off to the Democratic convention rather than actually accomplishing something," Murray said.

Murray said Christie will review the specifics if he gets them. "Only then can he determine if their plan to fund the TTF with an increased gas tax offers tax fairness to the people of New Jersey in the form of significant broad-based tax relief.”

The tax-cut side of plan no longer includes an element that had been advocated by Senate Republicans such as Minority Leader Thomas Kean Jr., R-Union: a tax deduction for giving to New Jersey charities.

Over the last few months, many New Jersey 101.5 hosts have railed against any version of the gas tax increase — in particular morning show host Bill Spadea, who frequently urged residents to call lawmakers and put a halt to the plans.

He repeated that call Friday, urging residents to call four lawmakers and voice opposition to the tax.

(On all matters, New Jersey 101.5 hosts are each encouraged to express their own opinions, which often disagree with one another, and don't necessarily represent the station overall.)

Sweeney said the Senate Budget & Appropriations Committee will meet next week to consider the plan. Democrats are convening next week in Philadelphia for the Democratic National Convention, which ends Thursday. The Senate has added committee meetings to its calendar for Friday, July 29.

That would put the plan in place to be approved by the full Senate on Aug. 1, sending it back to the Assembly, where Democrats may have the votes to pass the bill with at least 41 votes — though couldn't get a super-majority of 54 votes, which would be needed to overcome an expected veto from Christie, without Republican support.

The Senate was prepared to act on the original package, without the gas-tax deduction and veterans exemption, in late June, but Christie struck a last-minute deal with the Assembly to instead pair a 1 percentage point cut in the sales tax with the gas-tax hike.

The Assembly passed the bill but Sweeney refused, saying the state budget can't afford what would eventually amount to a $2 billion a year reduction in state tax collections.

Lawmakers estimate the tax savings under the new plan -- or seen another way, the cost to the state budget -- is around $900 million. They also think the estate tax and retirement income provisions would help tax collections by discouraging people from moving out of New Jersey, though they don't project a specific financial impact of those moves.

The new provisions for gas taxes and veterans' income amount to around $43 million in savings for taxpayers.

The gas-tax hike would cost motorists $1.2 billion a year. It would also allow the state to stop diverting around $350 million a year from the general fund into the Transportation Trust Fund to help cover its payments on $16 billion in debt.

The gas-tax proposal no longer includes a proposed 7 percent tax on jet fuel. Airline industry officials had fought that proposal, saying it would make the state noncompetitive and would be illegal because all such tax revenues must to go to airport projects.

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