Plan for restocking N.J. transportation fund includes gas tax hike, array of decreases

The chairman of the budget committee in the New Jersey Senate has outlined a plan he believes could lead to an agreement to restock the rapidly diminishing Transportation Trust Fund.

Sen. Paul Sarlo said his proposal would increase the state gas tax to provide $2 billion a year for the fund that covers road and bridge repairs in each of the next seven to 10 years.

To deal with concerns about tax fairness, Sarlo said the gas tax hike would be tied to phasing out the inheritance tax, a higher threshold for taxes on retirement income, and a state income tax deduction for some charitable contributions.

“I’m trying to impact some of our local middle-class folks who want to donate to their local church, their local synagogue, to their local little league, to their local fire department,” said Sarlo, D-Bergen. “Give them some incentive, put a cap on it, that will provide them with some tax relief for donations they make locally.”

The plan will succeed only if all its facets are undertaken.

“Each individual piece may need to be modified slightly depending on the different advocacy groups, the different players — whether it’s the Republicans in the Senate and Assembly, or the Assembly Democrats or the governor’s office,” he said. “But I think, as a whole, it’s a framework that we all could live with.”

Sarlo has not said how much the gas tax would have to rise.

Sen. Jennifer Beck opposes increasing the state tax on gas.

“It is the most regressive tax you can impose on our citizens,” said Beck, R-Monmouth. “If you are a low-income person, and you have to drive to work, and I raise the cost of that commute, it impacts” families enormously.

If the trust fund is not replenished, the state will run out of money in August to move ahead with new road and bridge projects.