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NJ Assembly, Senate leaders propose $20B transportation fix

Friday, June 10, 2016   (0 Comments)
Share | 06/10/16

Leaders of the state Senate and Assembly rolled out ambitious 10-year plans to raise $20-billion to fix to the state transportation fund — and a host of changes to New Jersey’s tax code, including the end of the state’s estate tax and the ability to deduct charitable donations from taxes. To find the money for road repairs — the state’s transportation trust fund is expected to run dry on June 30 — the plans envision increasing the state’s wholesale taxes on motor fuels to raise an additional $2 billion annually.

Assembly President Vincent Prieto released his plan minutes before Senate leaders sent out theirs, but the Senate proposal includes far more details. Issued by state Sens. Paul Sarlo, D–Woodridge, and Steve Oroho, R–Sparta, the plan calls for increasing the wholesale gasoline tax, officially called the “petroleum products gross receipts tax,” by 7 percent, or 10 cents per gallon. The wholesale diesel tax would increase by 3 cents a gallon. If wholesalers pass the entire cost on to motorists at the pump, the proposal would increase the cost of gasoline by 23 cents per gallon. Combined with existing state and federal taxes, that would bring the total to 55.9 cents per gallon, still less than the amount charged by neighboring states including New York and Pennsylvania.

The plan includes several items to make it more palatable to taxpayers, the majority of whom have opposed a gas tax increase for years. The estate tax, one of the highest in the nation, would be phased out over four years. The earned income tax credit for low- and moderate-income families would be increased, and the exemption for retirement income would quintuple by 2020. “The plan we have put together will save hundreds of millions of dollars for New Jersey taxpayers by ensuring that out-of-state drivers who use our roads pay their fair share for their upkeep,” Oroho said. “Just as important, it makes New Jersey’s tax structure more competitive. The plan from the Assembly contained far fewer details. It also came only from Democratic leaders of the body, and included no Republican supporters. 

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