N.J. Assembly Democrats Unveil Framework for Replenished Transportation Trust Fund

Plan Unveiled by Prieto, Sumter, Schaer, McKeon & Vainieri Huttle Calls for $2B Annual Spending & Doubling Local Transportation Aid
Would Also Involve EITC Increase, Pension Exclusion Boost, Estate Tax Phase-Out & Transparency Web Site

(TRENTON) – Assembly Speaker Vincent Prieto and key Assembly leaders on Friday detailed the Assembly’s framework for a long-term plan to replenish the dwindling Transportation Trust Fund, including boosting transportation spending to $2 billion annually and doubling vital transportation aid to local governments to repair and improve New Jersey’s road and bridges.
The new program was unveiled by Prieto, Assembly Majority Conference Leader Shavonda Sumter, Assembly Budget Chairman Gary Schaer, Assembly Judiciary Chairman John McKeon and Assembly Deputy Speaker Valerie Vainieri Huttle.
It would be funded through the state’s petroleum products gross receipts tax and modernizing how the state taxes jet fuel.
Prieto said he would accept, as part of overall fairness to taxpayers, phasing out the estate tax, if it was also accompanied by increasing New Jersey’s Earned Income Tax Credit to 40 percent of the federal benefit and increasing the state income tax’s pension and retirement income exclusion.
“A modern transportation network and the construction jobs it will bring are crucial to the state’s economic future,” said Prieto (D-Hudson/Bergen). “Gov. Christie has displayed a shocking lack of leadership when it comes to fixing this problem, becoming the first governor in modern history to do nothing as the transportation fund so vital to daily commutes and well-paying jobs nears bankruptcy. We will show leadership where Gov. Christie has failed, and stand ready to hammer out the details of this plan with my legislative colleagues in the coming weeks to strengthen New Jersey’s economy. I look forward to working with Minority Leader Bramnick and the Senate on putting a bipartisan bill on the governor’s desk by month’s end.”
The American Society of Civil Engineers notes two-thirds of New Jersey’s roads are in poor or mediocre quality, with 36 percent of the bridges deficient or obsolete. It also estimates that New Jersey drivers pay $601 per year in added car repair costs, which the lawmakers noted is a hidden tax that hits middle-class and lower-income drivers hardest.
Under the Assembly’s framework:
· The Transportation Trust Fund would be replenished for around 10 years;
· $2 billion would be spent annually on roads, bridges and transit networks, up from $1.6 billion.
· Annual transportation aid for local governments would be doubled to $400 million per year, providing key aid and property tax relief;
· The program would be funded by revising the petroleum products gross receipts tax, which is imposed on all companies engaged in refining or distributing petroleum products for distribution in this state. It applies to the first sale, not for export, of petroleum products within New Jersey. Home heating oil and propane gas and kerosene used for residential heating are exempt from tax.
· It would also be funded by modernizing how New Jersey taxes jet fuel. New Jersey taxes jet fuel at a low rate of 4 cents per gallon, and a recent study found commercial airlines get $42 million a year in tax breaks from the state under a policy that only taxes jet fuel they consume while taxiing and during takeoff.
· All fuel tax revenue would be constitutionally dedicated to transportation needs. Prieto has already sponsored a ballot question that will ask voters this fall to approve this dedication;
· New Jersey’s Earned Income Tax Credit would be increased to 40 percent of the federal benefit. The Assembly approved such a bill ushered by Prieto in March;
· The state income tax’s pension and retirement income exclusion would be increased;
· The state’s estate tax would be phased out over a 4-year-period;
· A new state web site would be established to track all state transportation projects in real time, providing taxpayers with more details and transparency on their investments.
“This framework represents a long-term sustainable plan that can be a major driver for economic growth and stability,” said Sumter (D-Passaic/Bergen). “New Jersey has relied far too long on patchwork transportation plans that didn’t do enough and irresponsibly increased debt. This is a responsible approach that will lead to improved commuter access to solid, well-paying jobs and more sorely needed business investment in our state.”
“New Jersey needs a modern and safe transportation network for its economic survival, but years of foolish borrowing leave our state teetering on the brink of a transportation disaster,” said Schaer (D-Passaic/Bergen). “This framework will mean long-term job creation and an improved transportation system key to maintaining and attracting business investment in our state.”
“A modern transportation and transit system is too important for New Jersey’s future,” said McKeon (D-Essex/Morris). “We need to act or we risk economic turmoil for our state. This is a balanced and fair plan that will reinforce our economic future, leading to more economic development and less congestion on our roads, which is good for drivers, our economy and our environment alike.”
“This is an investment in our future,” said Vainieri Huttle (D-Bergen). “This long-term sustainable plan will ensure we have a modernized transportation system that will lead to reduced commuting times and more time with our families. This is a smart and responsible approach that will pay dividends for years to come.”