New Jersey Senate puts brakes on gas-tax hike

TRENTON - New Jersey's gas tax isn't going up - at least for the holiday weekend.

The Senate did not hold a vote Thursday on legislation to raise the tax to replenish the state's fund for roads and bridges, spurning a call by Gov. Christie to resolve the crisis before the fiscal year ended Thursday.

Senate President Stephen Sweeney (D., Gloucester) said he didn't believe there was enough support in his chamber to advance legislation, backed by Christie, that the Assembly passed this week.

That bill, like one Sweeney does support, would raise the gas tax from 14.5 cents per gallon to 37.5 cents. The tax hasn't been raised since 1988.

Sweeney said he was concerned about a different provision in the Assembly package, which would gradually reduce the sales tax from 7 percent to 6 percent by the time Christie leaves office in January 2018.

"The Senate feels it's too expensive," Sweeney said. The cut in the sales tax would open a $1.9 billion budget hole by fiscal 2022, according to the nonpartisan Office of Legislative Services.

Senate Democrats in particular are concerned the state won't be able to plug that hole, especially because they also want voters to approve a constitutional amendment in November that would require the state to make bigger contributions to the pension system for public employees.

Under his plan, Christie has said, on average a family would spend an additional $200 on gas but save more than $400 from the lower sales tax.

Dozens of building-trades laborers - whose unions are big political players - observed the Senate's proceedings from the gallery. They also marched outside the Statehouse with chants of "Say yes to TTF," the Transportation Trust Fund.

"Each day we are without a solution, workers will be laid off," Raymond M. Pocino, vice president of the Laborers' International Union of North America, said in a statement. "This failure to act is now directly impacting the livelihoods of thousands of New Jerseyans."

The unions generally want the trust fund to be replenished and are impatient with the wrangling over offsetting tax cuts.

Progressive groups wary of future budget shortfalls that could force cuts to social programs were relieved.

"No deal is a good deal," said Jeff Tittel of the New Jersey Sierra Club.

The Legislature is scheduled to go on a break beginning Friday, but it can reconvene at any time.

Speaker Vincent Prieto (D., Hudson) said he would be on vacation next week, so a new proposal likely won't emerge until he returns.

Sweeney said he planned to try to negotiate a new deal with Prieto and Christie.

"I'd love to be able to get the governor on board," Sweeney told reporters. "He stepped out and showed us what he was willing to do. We've got to find out if we can get him in the same place. At the end of the day, it's easier if the governor is in agreement."

Sweeney and other senators had been pushing a package that would raise the gas tax, phase out the estate tax, increase a tax credit for the working poor, add a charitable-contribution exemption to the personal income tax, and boost an income-tax exemption for seniors.

The exemption for seniors is also in the Assembly bill.

Christie had indicated he would not sign the Senate legislation, which had some GOP support in both houses, because he didn't think it represented "tax fairness" to New Jerseyans.

Moreover, Prieto and Sweeney couldn't whip up a two-thirds majority vote that would be needed to override a possible veto.

"I need a bill the governor will sign," Prieto told reporters.

Senate Minority Leader Thomas H. Kean Jr. (R., Union) said he opposed the Assembly plan, putting him at odds with a governor from his own party. At the same time, Kean noted a split among Democrats: "It seems that the majority party is in disarray."

The five-year authorization for transportation funding expired Thursday night at the end of the fiscal year. But Sweeney said the state would have enough money for transportation until August. That's when "things would shut down," he said.

Currently, all gas-tax revenues are used to pay debt. If a tax increase is enacted, lawmakers would ask voters in November to dedicate the new revenues to transportation needs.

Lawmakers also plan to seek voter permission to borrow more money to help finance roads, bridges, and rail projects. The Transportation Trust Fund Authority, which issues bonds, has hit its legal borrowing limit.

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Gov. Christie on Thursday signed a roughly $34.5 billion budget into law for the fiscal year that begins Friday, using his line-item veto authority to cut $300 million from the spending bill passed by the Democratic-controlled Legislature.

The state constitution requires the budget to be balanced. The Legislature passed a $34.8 billion spending plan this week, with Democrats and Republicans mostly on the same page.

The governor generally has 45 days to act on other pending legislation.

Among dozens of measures awaiting his approval or veto is a bill that would prohibit the Treasury Department from investing public employee pension funds in companies that boycott Israel.

Lawmakers didn't go through with a scheduled vote to override Christie's veto of a bill requiring domestic-violence offenders and those subject to restraining orders to surrender firearms. Legislative staff said Senate Majority Leader Loretta Weinberg (D., Bergen) was working with Senate Minority Leader Thomas H. Kean Jr. (R., Union) on a compromise measure.

Christie vetoed the bill in May, saying it was redundant because current law requires officers to seize a person's weapons if there is probable cause he or she has committed domestic violence.

- Trenton Bureau

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