Christie in unusual role: Selling a tax increase
WALL, N.J. - Gov. Christie, back on the stump in New Jersey Tuesday for the first time since launching his unsuccessful presidential bid a year ago, found himself pitching an unfamiliar cause: a tax increase.
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WALL, N.J. - Gov. Christie, back on the stump in New Jersey Tuesday for the first time since launching his unsuccessful presidential bid a year ago, found himself pitching an unfamiliar cause: a tax increase.
But the Republican governor had potential tax cuts to promote, too.
He told the crowd gathered for a town-hall-style meeting in a Monmouth County library about a deal that cleared the Assembly early Tuesday to hike the gas tax - to replenish the depleted fund for transportation projects - and shave a point off the sales tax.
"I've never signed a tax increase in seven years as governor. I didn't want it to be for this one," Christie said. "But I also don't want our roads to fall apart" or bridges to fall down, he said.
The Assembly voted, 53-23, just before 1 a.m. Tuesday to raise the state's tax on gasoline - currently the second lowest in the nation at 14.5 cents per gallon - to 37.5 cents. The legislation, which must also pass the Senate, would also gradually reduce the sales tax from 7 percent to 6 percent by the time Christie leaves office in January 2018.
Christie, responding to a resident's question, said he had proposed the cut in the sales tax, which "would be the first statewide tax cut . . . since [Gov.] Christie Whitman cut taxes in 1994."
The sales tax cut would save New Jerseyans an average of $465 a year, Christie said, while the gas tax increase would cost the average driver, driving between 11,000 and 12,000 miles a year, $200. He also touted an income tax exemption for seniors with retirement income of less than $100,000 a year.
But "the story's not over," because the Senate hasn't voted on the plan, Christie said.
"Bad news?" asked a man in the crowd.
Not so, Christie said.
"Between now and Thursday" - when the Senate comes back in session - "there are going to be a lot of conversations about this," he said.
Senate President Stephen Sweeney (D., Gloucester) expressed surprise Tuesday over the deal that emerged from the Assembly, which is different from a package being considered in the Senate, NJ.com reported.
"I went to sleep with one plan and woke up with a different one, and I haven't had a chance to talk to my Assembly colleagues," Sweeney said at a public event Tuesday, according to the website.
It cited Sweeney as saying he would review the Assembly plan but preferred the Senate version.
Members of both parties in the Senate are said to be skeptical of the Assembly plan, in part because of a projected budget hole it would create.
The sales tax cut, coupled with the increase in the income tax exemption for seniors' retirement income, to be phased in over four years, would create a $1.2 billion hole a year from now, which would grow to $1.9 billion by fiscal year 2022, according to the nonpartisan Office of Legislative Services.
A proposed constitutional amendment that has already passed the Legislature would dedicate all new revenues collected by the gas tax to the Transportation Trust Fund. Voters will decide whether to approve the amendment in November.
On Tuesday, Christie drew applause when he said the gas tax was "constitutionally dedicated only to transportation. So we can't spend it on anything else."
"Amen," one woman called out.
Companion legislation, which also passed the Assembly early Tuesday, would allocate $16 billion to the state's empty Transportation Trust Fund over eight years, including the proceeds of the gas tax and $12 billion in bonding that lawmakers expect voters to authorize via referendum in November.
Previously, a bipartisan group of senators had endorsed a gas tax hike and various offsetting tax cuts, including a phaseout of the estate tax. Those taxes would be cut gradually and less drastically than in the Assembly plan to allow for a bigger cushion in the event of an economic downturn.
The Senate plan would reduce revenues by $500 million this time next year and $1 billion by fiscal year 2022, according to OLS.
Each plan's supporters believe lost revenues could be offset, at least in part, by greater economic activity spurred by the tax cuts and infrastructure upgrades.
Two Democratic senators - Loretta Weinberg of Bergen County and Raymond J. Lesniak of Union County - planned to hold a news conference Wednesday to express concerns about the Assembly plan.
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