Vote to raise New Jersey gas tax by 23 cents rescheduled

TRENTON, N.J. (AP) - New Jersey lawmakers are set to vote on an agreement between Democratic leaders and Republican Gov. Chris Christie to raise the state’s gas tax by 23 cents a gallon to pay for road, bridge and transit work.

The Assembly and Senate rescheduled a Wednesday vote for Friday on the deal that Christie reached with Assembly Speaker Vincent Prieto and Senate President Steve Sweeney last week. The vote was rescheduled after lawmakers failed to get enough support to bypass a procedural vote.

If passed, the agreement would raise New Jersey’s gas tax - the second-lowest in the nation - from 14.5 cents to 37.5 cents a gallon. That would still be lower than neighboring New York and Pennsylvania, but higher than Alaska, which at 12.25 cents a gallon has the lowest gas tax in the country.

The deal would establish a $2 billion-a-year transportation trust fund over eight years and cut the sales and estate taxes, while also offering veterans and low-income residents tax credits, among other measures.

The legislation is up for a vote three months after the transportation trust fund expired and amid a shutdown of transportation projects ordered by Christie. Authority for the fund to pay for transportation work ran out without a deal in place to secure capital projects

The measure also provides that the sales tax go from 7 percent to 6.875 percent by January and to 6.625 percent by July 2017. The legislation would phase out New Jersey’s estate tax, changing the threshold from $675,000 to $2 million in 2017 and eliminating it completely in 2018.

The deal also includes raising the earned income tax credit, which helps low-income residents, from 30 percent to 35 percent for the current tax year, as well as increasing the tax exclusion on retirement income over four years to $100,000 for joint filers. Veterans would get a personal exemption for state income taxes under the measure.

The impasse between Christie and lawmakers dates to late June and centered on what the governor called “tax fairness,” or cutting other taxes while raising the gas tax. He and Prieto reached a deal, but it was rejected by the Senate, which never voted on it.

Now, Christie and leaders call the new measure, which would boost the transportation trust fund from $1.6 billion to $2 billion a year, a compromise.

Not everyone is happy about the deal, though. Both Republicans and Democrats have spoken out against the deal.

Democratic state Sen. Ray Lesniak, who is considering a run for governor in 2017, called the deal “Robin Hood in reverse” because low-income residents would struggle to pay the gas tax. Republican State Sen. Kip Bateman said the cost is not reasonable.