A bipartisan coalition of New Jersey lawmakers is pushing a $20 billion 10-year Transportation Trust Fund plan that would replenish the program before it expires June 30.
The legislation sponsored by state senators Paul Sarlo, D-Wood Ridge, and Steve Oroho, R-Sparta Township, would spend $2 billion a year for 10 years on road and rail projects. The new TTF plan anticipates spending $500 million annually in pay-as-you-go funding and issuing $1.5 billion in bonds per year. It would be financed largely by raising the gas tax as much as 23 cents a gallon.
“This is a real plan to broadly address New Jersey’s financial crisis,” said Senator Oroho in a statement. “With this restructuring plan we will shore up the Transportation Trust Fund.”
New Jersey’s current 14.5-cents-per-gallon rate is second lowest in the U.S. behind only Alaska, according to the Tax Foundation. The Sarlo-Oroho plan also calls for a 7% Petroleum Products Gross Receipts Tax, a 10-cent-per-gallon PPGRT tax on motor fuel, and a 3-cent-per-gallon PPGRT diesel surcharge. All motor fuel taxes would be dedicated solely to the Transportation Trust Fund under a constitutional amendment that would go on the ballot in November.
New Jersey Gov. Chris Christie has resisted efforts to raise the gas tax for a TTF reauthorization unless it is balanced with other tax cuts. The Senate legislation would repeal the state’s estate tax in 2019, establish income tax deductions on charitable contributions and increase retirement income exemptions.
Christie said in remarks to the Morris County Chamber of Commerce Monday that the proposal fails to include enough tax reductions to balance out the high gas tax increase. The Republican governor also criticized how the plan doubles annual transportation funding for counties and municipalizes to $400 million.
“If there’s a crisis what are you doing doubling the amount of money going to municipalities,” said Christie. “That is a payoff to protect their political backsides.”
The TTF legislation will need the support of Christie unless enough votes can be achieved in the Senate and Assembly to override a veto.
New Jersey has utilized the TTF to pay for transportation-related construction projects since the program was formed in 1984.
The TTF was last authorized in 2012 and Christie did not include any funding for it in his $34.8 billion fiscal 2017 budget proposal. Most of the current $1.26 billion state appropriation to the five-year $8 billion trust fund is used for debt service.