The New Jersey Senate is holding its first voting session in over a month today, but legislation seeking to renew the state Transportation Trust Fund with a gas-tax hike may not make the final agenda. The same goes for a resolution to put a pension-funding question on the ballot this fall.
Any delay would be considered a setback for Democratic legislative leaders, who back the pension amendment and are also hoping to secure enough votes to override Gov. Chris Christie and end a shutdown that’s brought projects to a halt during the summer construction season.
Transportation industry experts say that stopping road, bridge, and rail projects is directly leading to layoffs while transportation advocates warn that the prolonged detours are now posing a safety issue for motorists.
Also mired in the political gridlock in Trenton is the final legislative approval of a proposed constitutional amendment that government-worker unions want to see on the ballot this fall in a desperate push to shore up the state’s grossly underfunded public-employee pension system. Thanks to a hard deadline set in the state constitution, if a vote on the amendment isn’t held soon, the effort could be delayed for at least a year.
As of last night, neither the proposed constitutional amendment nor the legislation featuring a 23-cent gas-tax increase and a series of tax cuts that Democratic legislative leaders are backing amid their stalemate with Christie over the TTF were listed on the Senate’s official agenda for Monday’s voting session. That suggests there still aren’t the firm 27 votes in the Senate, where Democrats hold a 24-16 majority, for a successful override of an expected veto from Christie. Legislative leaders have said their goal to end the impasse is to send their own bill to Christie with enough votes to survive a veto.
“We’re going to easily get 25, 26 votes, easily,” said Sen. Paul Sarlo (D-Bergen) after the gas-tax legislation cleared the Senate Budget and Appropriations on Friday afternoon. “But we need to send a strong message that we’re serious on a 27-vote override.”
In the Assembly, where Democrats have a 52-28 edge, the target is 54 votes.
“I’m confident we’re going to get there, (but) I know we have some work to do in the Assembly, on some of the Assembly Republicans,” said Sarlo, who is a cosponsor of the gas-tax legislation.
The bill sponsored by Sarlo and Sen. Steve Oroho (R-Sussex) pairs the 23-cent gas-tax hike with several tax cuts aimed at making the increase more palatable to taxpayers. They include a phase out of New Jersey’s estate tax, an increase in the Earned Income Tax Credit for low-wage workers, and a new tax break for seniors living on pensions and other sources of retirement income like 401(k) plans.
Amendments officially added to the Sarlo-Oroho legislation on Friday include a $3,000 income-tax break for New Jersey veterans and a new gas-tax deduction for households earning less than $100,000.
Oroho, in a pitch made to colleagues on the committee just before the successful vote on the amended bill was held, said the proposed tax cuts are targeted specifically at keeping retirees from leaving the state due to high taxes. And since New Jersey’s current 14.5-cent gas tax only produces enough revenue to help pay down the TTF’s significant debt, hiking the gas tax prevents having to shift the cost of fixing local roads and bridges onto homeowners already paying the highest property taxes in the nation.
“We have to be extremely honest with our taxpayers about what’s happening,” Oroho said. “Look at the facts and circumstances that are right before you today.”
But Christie, a Republican, has repeatedly said over the past month that he’ll only approve the gas-tax hike if it comes with a one-percentage-point reduction in the state sales tax. He’s also ordered the shutdown of transportation projects throughout the state to make sure that whatever funding is left in the TTF is available for essential work and emergencies.
Christie, asked about the transportation-funding issue during a public event in Fair Lawn last week, sounded very much like he is still dug in. He said it’s only fair for taxpayers if something that impacts all residents like the gas tax is going to be increased that another broad-based tax be reduced at the same time.
“A 1 percent cut in the sales tax is about a $1.6 billion tax cut for people in the state,” Christie said. “It’s a lot of money, and it’s not just on the big items, it’s on everyday items that people pay.”
While the sales-tax cut favored by Christie is projected to save taxpayers $1.6 billion, it would also take a projected $1.6 billion out of the state budget, which has become a serious concern for lawmakers. The proposed gas-tax hike would generate roughly $1.2 billion in new revenue, but all of that money would go into the off-budget TTF. A proposed ballot question that will be going before voters in November seeks to constitutionally dedicate all New Jersey fuel-tax revenue to transportation projects.
The cost of the tax cuts proposed in the Sarlo-Oroho bill is a more modest $896 million, according to initial estimates. By raising the gas tax, roughly $350 million in sales-tax revenue that is going into the TTF now would be freed up to help offset the cost of the tax cuts, something the sponsors maintain is a more responsible option. That’s why they’re pushing for what would be the first successful override by the full Legislature of a Christie veto since the governor took office in early 2010.
During the committee hearing on Friday, a number of people came before the lawmakers to urge them to pass the gas-tax hike and quickly resolve the dispute with Christie. Many represented groups tied to the road-construction industry, including construction-worker-unions, contractors, and engineers.
“This is having a significant jobs impact on our profession today,” said Joseph A. Fiordaliso, president of the American Council of Engineering Companies of New Jersey.
Cathleen Lewis, director of public affairs and government relations for AAA of New Jersey, told lawmakers they should also consider the impact the prolonged detouring of motorists around the stalled construction zones is having on overall safety.
“Every project that is stopped has a safety component to it. It is done because our infrastructure is crumbling,” she said.
“Every time we detour someone, it means we are putting additional pressure on another road,” Lewis added. “Every time we detour someone, it means that their safety is put at risk because we have drivers who are uncertain where to go, confused by the detour.”
NJ Spotlight, an independent online news service on issues critical to New Jersey, makes its in-depth reporting available to NewsWorks.