N.J. ballot questions: New casinos going down, sharp divide on gas tax

Haddonfield Memorial High School freshmen Abigail Mackey (left). 15, and Alison Talty (right) 14, unload their sandwich board "vote here" signs outside the polling place at the Haddonfield Borough Hall on November 8, 2016.

Incomplete returns in New Jersey showed voters emphatically rejecting a ballot question that would have allowed gambling casinos in North Jersey, but being closely split on whether to dedicate all state fuel tax revenues to improving and maintaining transportation infrastructure.

With nearly three-quarters of the vote counted, about 80 percent were saying no to allowing casinos outside Atlantic City, according to unofficial tallies, and there was a virtual tie on a proposed amendment to the state constitution that would commit all gasoline and diesel fuel tax revenues to the Transportation Trust Fund.

The ballot question on the gas tax appeared just one week after a 23-cent-a-gallon hike went into effect, the first such increase since 1988. The measure would put gas and diesel fuel tax revenues outside the reach of future governors or legislators who might want to assign them elsewhere.

Used to repair and maintain roadways, bridges, and mass transit, the Transportation Trust Fund has seen its funding dwindle from $350 million a decade ago to $33 million this year, leaving thousands of projects - including a long-awaited repaving of Route 70 in South Jersey - to languish.

"The importance of this measure is that it would double the portion" of transportation moneys flowing to municipalities and counties, said Mike Cerra, assistant executive director of the New Jersey League of Municipalities, which endorsed it.

Faced with the need to make essential repairs to roads and bridges, Cerra said, municipalities are often forced to raise local taxes to pay for them. A yes vote on the question would be "sound public policy, sound fiscal policy, and give property tax relief," he said.

Rejection of the ballot question would not erase the new fuel tax, which the Legislature approved by a wide margin.

The Office of Legislative Services in October calculated that the new gasoline tax would generate $1.16 billion a year, the diesel fuel tax $39.6 million, and non-motor fuels $31 million.

Those will not yield net increases in state revenues, however. In approving the fuel tax hike, lawmakers also voted to eliminate the estate tax over the next two years, trim the state sales tax from 7 percent to 6.625 percent, ease the tax on retirement income, and give tax breaks to honorably discharged veterans.

The fuel tax referendum had the support of Gov. Christie and most lawmakers, but Lt. Gov. Kim Guadagno made a surprising break with Christie over it this fall.

She urged voters to vote no on the fuel tax ballot question because, she said, it would authorize the state to borrow up to $12 billion against anticipated revenue for transportation infrastructure.

"What we're really saying in this ballot question," Guadagno said in an October radio interview, "is that you have my permission - 'you' meaning Trenton, 'my' meaning the taxpayers - to borrow $12 billion and pay for it with that 23 cents."

Casino expansion advocates said the measure was needed to restore gambling revenues lost in recent decades to legalized gambling in Pennsylvania and Connecticut.

But opponents had warned that casinos in the New Jersey suburbs of New York City would undermine Atlantic City's struggling casino industry, and pre-vote surveys showed weak support for the plan.

If approved, Public Question 1 would have amended the state constitution to allow creation of one casino in each of two unspecified counties at least 72 miles from Atlantic City.

The Meadowlands in Bergen County, Jersey City in Hudson County, and Newark were frequently mentioned as likely sites. Even as the ballot question went before voters, however, the Legislature had not settled on the tax rate for the new casinos or where those revenues would be allocated.

The measure would have given owners of existing Atlantic City casinos first rights, and 60 days, to apply for the two new licenses. It would also have compensated the city's seven casinos for any loss of revenue the new casinos generated.

With its likely defeat, the question of allowing new casinos outside Atlantic City cannot appear on the ballot for at least two years.

Both 2016 ballot questions were initiated by the Legislature, since state law does not permit initiatives or referendums to change the constitution.