NJ coalition blasts proposal to exchange estate tax for gas tax hike
The hot topic at the State House in Trenton for well over a year has been increasing the gas tax to replenish the nearly bankrupt Transportation Trust Fund. The talk heated up again Tuesday when a coalition called “Better Choice Choices for New Jersey” held a press conference and blasted a long-rumored proposal to eliminate the state’s inheritance and/or estate tax in exchange for the gas tax hike.
The state’s average home value is $355,685. Less than 10 percent of the state’s municipalities, which are home to just 4 percent of the state’s population, have average home values at or above the $675,000 threshold at which the estate tax kicks in according to a report released Wednesday, issued by New Jersey Policy Perspective.
“In New Jersey’s budget we are behind in all sorts of things and I don’t have to list them, but to dig that hole deeper at this time defies common sense,” said coalition member and NJPP President Gordon MacInnes.
The coalition estimated that repealing both of the so-called death taxes would impact just a few thousand wealthy Garden State residents, but increasing the gas tax would affect almost every New Jerseyan. Members also said eliminating both taxes would mean roughly $800 million less in revenue for the state annually.
“Tying a gas tax increase to a repeal of the state’s inheritance and estate taxes is wrong and worse, it’s stupid,” said coalition member and NJ Citizen Action program director Anne Vardeman.
Vardeman said the loss in revenue would make funding cuts to education and other programs inevitable.
“Everything is on the table for discussion, but it must be done within the context of overall tax fairness to the people of New Jersey. If there is I’d consider any suggestions that they want to make regarding the Transportation Trust Fund,” said Gov. Chris Christie, referring to the gas tax increase during the November edition of Townsquare Media’s "Ask The Governor" program.
In an Oct. 21 press conference, the chairman of the State Senate Budget Committee spoke as if a gas tax increase was inevitable, but linking it to the elimination of one or both so-called "death taxes,” was definitely not a sure thing.
“We need to first come up with a plan on the TTF. If it’s necessary and we need the political support the estate tax could be joined, but they’re not connected in the same piece of legislation. Clearly I’m in support of it, but let’s not connect them at the hip and write them in the same bill,” said State Sen. Paul Sarlo (D-Wood-Ridge).
A Quinnipiac University poll released on Nov. 11, 2015 revealed 62 percent of the registered New Jersey voters surveyed were opposed to a gas tax hike. Only 35 percent supported the idea. The same poll showed voters still said they were against a gas tax increase even if it was tied to a cut in the death taxes (56 percent to 33 percent).
Dating back to 1892, the transfer inheritance tax is one of New Jersey’s oldest taxes. The 16 percent tax is applied when property is transferred outside the immediate family. Another so-called “death tax,” known as the estate tax, is applied on property valued at more than $675,000.
Kevin McArdle has covered the State House for New Jersey 101.5 news since 2002. Contact him at email@example.com. Follow him on Twitter at @kevinmcardle1.