N.J. plan for gas-tax hike coupled with sales-tax cut too risky, some say

The Assembly-passed measure for replenishing New Jersey’s Transportation Trust Fund is getting a cool reception from business and consumer groups.

Laurie Ehlbeck, the state director of the National Federation of Independent Business, said small companies worry the 23-cent gas tax increase will hurt much more than cutting the state sales tax from 7 percent to 6 percent.

“They’re afraid that it’s going to deter people from taking a trip to the Shore or to amusement parks, and they feel that they’re going to see less people coming through,” she said.

Most people won’t notice the penny sales tax reduction, said New Jersey Policy Perspective president Gordon MacInnes, but it will result in a $1.6 billion drop in state revenues.

“People are going to see all sorts of programs that are essential to particular families that are going to disappear or they’re going to be badly underfunded,” MacInnes said.

Senate Majority Leader Loretta Weinberg said the Assembly plan needs a lot more discussion.

“We can’t possibly fund the pension payments that the Assembly passed and do the one-penny cut on the sales tax and fund the TFF,” she said. “The numbers don’t work.”

If the Senate doesn’t go along with that plan, Weinberg said, the state may have to rely on more borrowing to pay for transportation projects.