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BIPARTISAN AGREEMENT ON NJ TRANSPORTATION TRUST FUND AND TAX CUTS

gas tax nj

June 10,2016

the staff of the Ridgewood blog

Ridgewood NJ,  Senators Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex) today announced that they reached a bipartisan agreement funding a 10-year, $20 billion Transportation Trust Fund and a series of wide-ranging tax cuts that are designed to create jobs, strengthen New Jersey’s economy and create tax fairness.

“We are optimistic that our plan for a 10-year, $20 billion Transportation Trust Fund will win the support of business and labor leaders, environmentalists and transportation advocates, and the millions of New Jerseyans who are tired of driving over poor highways and crumbling bridges, jamming into overcrowded buses and trains that break down and get delayed too often,” said Senator Sarlo. “This plan will create jobs, spur economic growth, increasing housing values and make New Jersey competitive for decades to come.”

“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,” said Senator Oroho. “Just as important, it makes New Jersey’s tax structure more competitive. Our plan eliminates the estate tax, gives senior citizens an exemption on their retirement income, raises the Earned Income Tax Credit for the working poor, makes charitable contributions to New Jersey social service providers tax-deductible, and provides a gas tax deduction for those who have to drive the most.”

The Sarlo-Oroho plan calls for a 7% Petroleum Products Gross Receipts Tax, a 10-cent-per-gallon PPGRT tax on motor fuel, and a 3-cent-per-gallon PPGRT diesel surcharge, all imposed at the wholesale level  If oil companies passed the full cost of the PPGRT tax on to motorists, the gas tax increase would be 23 cents a gallon. Added to New Jersey’s current 14.5-cent tax on motor fuels, New Jersey’s 37.5-cent per gallon would still be lower than both New York’s 42.4-cent motor fuel tax and Pennsylvania’s 50-cent tax.

All motor fuel taxes will be dedicated solely to the Transportation Trust Fund under a constitutional amendment already scheduled to go on the ballot in November.

Senators Sarlo and Oroho noted that the Petroleum Products Gross Receipts Tax increases and all of the phased-in tax cuts – elimination of the estate tax, an Earned Income Tax Credit rasied to 40% of the federal level, the $100,000 senior retirement income tax exemption, the deduction for charitable contributions, and the gas tax deduction – are included in one tax bill.

“Creating the right tax structure to pay for our road and bridge infrastructure, combined with tax cuts to help make New Jersey more competitive and retain income and capital, will provide tens of billions in tax relief over the next 25 years, ” said Senator Oroho said.

A second bill authorizes a 10-year, $20 billion Transportation Trust Fund to replace the current five-year TTF that expires June 30 and runs out of money for new projects by April.

“This is a robust transportation capital plan that will double county and municipal transportation aid to hold down property taxes, fund the Hudson-Bergen and Camden-Glassboro light rail extensions, and expand rail freight funding to deal with the doubled cargo that the giant Panamax super freighters will be bringing into Port Newark once the Bayonne Bridge is raised,” Senator Sarlo said. “We are calling on all of our colleagues on both sides of the aisle in both houses to support it.”

DRAFT PLAN FOR TRANSPORTATION TRUST FUND AND TAX CUTS

1.      $2 billion a year Transportation Trust Fund authorizing spending of $20 billion over 10 years, with all revenue from motor fuels taxes constitutionally dedicated and unused funding rolled over into TTF Capital Fund surplus

2.      TTF Funding: 23 cents in motor fuels taxes added to existing 14.5-cent gas tax

·         Existing 10.5-cent per gallon tax on motor fuel,13.5-cent tax on diesel, and 4-cent Petroleum Products Gross Receipts Tax on motor fuel and non-motor fuel use remain dedicated to payoff of existing debt.

·         Existing $200 million in constitutionally dedicated sales tax revenue remains dedicated to payoff of existing debt (but additional $346.2 million in sales tax revenue the Governor used in FY17 budget to plug hole in TTF is shifted back to General Fund to pay for tax cuts)

·         New 7% PPGRT tax on motor fuel (equivalent to 12-cent tax hike on regular gas as of May 1 prices), with floor set at price level when new tax goes into effect. Future price increases projected to just about offset future decline in motor fuel consumption over next decade due to fuel efficiency; while PPGRT^ tax rate will go up, consumers will end up paying about the same amount.

·         Additional 10-cent per gallon Petroleum Products Gross Receipts Tax on regular motor fuel and 14-cent PPGRT on diesel fuel.

·         New7% PPGRT tax on jet fuel (aviation kerosene) to replace current tax limited to taxiing and takeoffs, and 7% PPGRT tax on non-motor fuel use represents increase from current 2.3% (home heating oil still exempted).

·         Pilot Vehicular Mileage Tax on electric, hydrogen-powered and other non-gas powered vehicles to kick in one year after passage based on Oregon-California model, with revenue dedicated to TTF projects that reduce emissions such as mass transit or congestion reduction initiatives. Drivers and businesses can choose straight $150 user fee for individuals or $300 for businesses paid with registration renewal.

3.      Increase Earned Income Tax Credit from 30% of federal credit to 35% of federal credit effective for 2016 tax year to offset PPGRT motor fuel tax increase for those earning up to $45,000.

4.      Phase out estate tax, starting with increase from $675,000 threshold to exemption on first $1 million effective December 31, 2016, scaling up to full repeal of estate tax effective December 31, 2019, following the schedule set in the original Sarlo-Oroho bill.

5.      Increase exemption for retirement income for those earning $100,000 or less from current $20,000 for couples/$10,000 for individuals to $40,000/$20,000 in the 2017 tax year, ramping up to $100,000/$50,000 for the 2020 tax year.

6.      Establish income tax deduction for contributions to New Jersey charities limited specifically to charities engaged directly in meeting the social services needs of the most vulnerable, such as food banks, Catholic Charities, ARC, United Way, homeless shelters and Meals on Wheels. Eligible charities would be developed from NJ State Employees Charitable Campaign list, which has been properly vetted since 1985 and has strict standards. Deduction would be phased in over four tax years from 2017 to 2020.

7.      Establish income tax deduction of all gas taxes paid by those for whom gas tax exceeds 1% of income. Consumer can save credit card receipts or use standard multiplier based on odometer readings. Mileage reimbursed by employer is not eligible, nor is gas tax paid for commercial vehicles.

8.      Tax cuts are offset by $346 million in reallocated sales tax revenue (over and above the $200 million constitutional dedication) that Administration raided to keep TTF solvent in absence of promised PAYGO funding, plus $57 million to $75 million in additional income, sales and payroll tax revenue generated by increased TTF spending and tax cuts. Net to budget is break-even until FY20, 110 million loss in FY21 and $294 million loss in FY22, but that does not include any projection of additional income or sales taxes generated by wealthy taxpayers or seniors deciding to stay in New Jersey because of tax policy changes.

9.      Overall, this program dramatically improves the state’s cash-flow position and sharply reduces the amount of short-term borrowing from capital markets that would be needed to make quarterly pension payments. Treasury and TTF regularly borrow back and forth. The $1 billion rolling surplus in the TTF Capital Fund by the end of FY18 will range from $1.7 billion to $1.9 billion from FY20 to FY24. This money will be available to Treasury for short-term borrowing at the beginning of the year (bond payments come due at the end of December and the end of June). In addition, fuel tax revenues come in monthly, while the cost of the EITC, pension and charitable tax cuts do not hit until the end of the fiscal year, effectively improving the state’s cash flow position by $120 million a month during the course of each year. The net result is that the state will be able to make quarterly pension payments without having to borrow more than the usual $2 billion to $2.5 billion that we have traditionally borrowed from credit markets on short-term notes due by June 30 each fiscal year.

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No repair in sight for N.J. transportation fund; talks collapse in hunt for revenue

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No repair in sight for N.J. transportation fund; talks collapse in hunt for revenue

MARCH 25, 2015, 3:51 PM    LAST UPDATED: WEDNESDAY, MARCH 25, 2015, 11:07 PM
BY CHRISTOPHER MAAG AND MELISSA HAYES
STAFF WRITERS |
THE RECORD

Negotiations to fix New Jersey’s depleted transportation funding system have broken down, the state transportation commissioner said Wednesday. That means any permanent fix — including a possible gas tax increase — probably will not happen this year, elected officials and transportation experts said.

“The likelihood of it being resolved for the moment is not ideal,” said Commissioner Jamie Fox in reference to the upcoming November election when all 80 seats of the state Assembly are on the ballot. The primary filing deadline for that race is Monday. “It’s election time, which makes it a much more difficult thing |to do.”

Since the beginning of the year, Fox and leaders of both political parties have said the state’s transportation system faces a serious budget shortfall, and they pushed to fix it immediately. The fund that pays for major transportation projects takes in $1.2 billion annually, mostly from motor fuels taxes and turnpike tolls. Nearly all the money is dedicated to paying off more than $18 billion in debt, however, with little left for big maintenance projects and new construction.

https://www.northjersey.com/news/n-j-transportation-funding-talks-over-for-now-1.1295459

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Reader says NJ Transportation Trust Fund is a Black Hole of Waste

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Reader says NJ Transportation Trust Fund is a Black Hole of Waste

Raising the gas tax is only for one reason… decades of bad management, deceptive accounting, and the continual awarding of higher wages and benefits to union workers without adequate funding by governors and legislatures.

Raising gasoline taxes in a state that is already the nation’s highest taxed isn’t plausible, and it only goes to fund a BLACK HOLE… NJ spends 12X the national average and 3X the next highest state at over $2 million per mile of state road; the whole system is corrupt (see this if you haven’t read it already https://watchdog.org/201704/new-jersey-gas-tax-highways-cost/ ). Given the gravity of the situation, no part of the status quo is acceptable, and yet Senators Sarlo and Sweeney just blindly want to raise taxes on our gasoline to keep their gravy train for overpaid union labor going..

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Reader says Time for Beneficiaries of Squandered NJ Transportation Funds to Return Them

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file photo by Boyd Loving

Reader says Time for Beneficiaries of Squandered NJ Transportation Funds to Return Them

When a Ponzi scheme goes broke prosecutors appoint a trustee and use a “clawback” cause to force those who received beneficial $$$ to return it, and it’s distributed to investors/victims.

The same needs to be applied to the municipalities/homeowners who received the “benefit” of the sounds walls from money that was dedicated to road repairs, NOT to improve privat property of those who chose a poor location to live.

Until those funds that were pissed away on sound barriers are returned from the beneficiary homeowners and municipalities, no increase in taxes.

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Road Warrior: Route 4 bridge in Teaneck gets no respect

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PHOTO COURTESY OF BOB LEAFE
Bob Leafe, a reader from of Hackensack, recently spotted this large crack on the bridge near River Road in Teaneck.

Road Warrior: Route 4 bridge in Teaneck gets no respect

JANUARY 25, 2015 LAST UPDATED: SUNDAY, JANUARY 25, 2015, 2:49 PM
BY JOHN CICHOWSKI
RECORD COLUMNIST |
THE RECORD

During a stroll along the Hackensack River walkway on the day after Christmas, Bob Leafe became intrigued by the geese taking shelter under the Route 4 bridge in Teaneck, so he pulled out his camera and started shooting.

But when he looked closely at his work, Bob realized he had shot something a bit less idyllic than wildlife. His photo, as shown here, depicts what appears to be a vertical gash that extends along one of the giant pillars holding up part of the span that carries more than 100,000 vehicles each day, according to the state Department of Transportation.

“I’m no engineer, but that does NOT look good,” he wrote in an email. “Pretty scary,” he said later on the phone, adding that he would look for other ways to cross the Hackensack River from Teaneck to his home in Hackensack.

DOT engineers insist the span is safe enough for traffic — safer certainly than the Route 3 bridge over the same river between East Rutherford and Secaucus, whose left eastbound lane had to be closed last week for at least a month to repair persistent deterioration. Such road conditions rarely attract much attention from Trenton policymakers. But the Route 3 one attracted reporters and photographers to a DOT yard about a half-mile from the bridge, where Transportation Commissioner Jamie Fox again made his pitch for a “revenue enhancer.”

This term is code for some sort of additional levy that Fox believes is necessary to replenish the state’s Transportation Trust Fund, which has reached its bonding capacity. But the commissioner again avoided endorsing any hike to the hated 10.5-cent-a-gallon motor-fuels tax, which has always fueled most of the fund.

https://www.northjersey.com/news/nj-state-news/bridge-gets-no-respect-1.1251241

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NJ Motorists about to Be Run Over by Big Gas Tax Hike?!

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NJ Motorists about to Be Run Over by Big Gas Tax Hike?!
May 2,2014
AFP

Ridgewood NJ, New Jersey motorists could be run over by a huge gas tax hike this year. In a report from New Jersey Policy Perspective, the state’s biggest liberal “think tank”, called for a 39 cent gas tax hike! 
 
NJ gas tax is the only low tax in New Jersey . The New Jersey Policy Perspective omitted to mention that  New Jersey spends $1.2 MILLION to pave a mile of road–that’s 8.4 times the national average! The reason is simple: union favoritism! The Big Labor giveaways of prevailing wage statutes and project labor agreements inhibit competition and inflate the cost of every road construction project in the state. Without prevailing wage and PLAs, New Jersey would have plenty of money to address improving our roads and bridges.

Now that our Transportation Trust Fund has been bled dry  because we overpay so much to build and maintain our infrastructure, what is Trenton’s solution? You guessed it. Just like every other problem we face, they want to tax hard-working New Jerseyans even more. 39 cents a gallon more!

The AFP is call on citizen-activists to make their presence felt in Trenton. “Road to Prosperity” event next Thursday, May 8: . If you and I don’t attend committee hearings and speak out, the special interests and Big Labor Union Bosses will run roughshod over us.

New Jersey cannot tax, spend and borrow our way out of the mess we are in. Quite the opposite: New Jersey needs to cut taxes and spending to grow our economy. Economic prosperity is the only real solution to address the fiscal hole our state government is now in. The only way to win is by freedom fighters like you taking on the forces of big government under the dome

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