with Tyler Kane, Transportation Investment Advocacy Center

A new bipartisan proposal to keep New Jersey’s Transportation Trust Fund functional was introduced June 20 by Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex) in the state Senate, with a companion bill introduced by Assemblyman Vincent Prieto (D- Hudson/Bergen) to the state General Assembly.  The proposal aims to generate $20 billion in new revenue over 10 years. Without new revenue by June 30, the state will only be able to fund older transportation projects and make payments towards the bond debt that financed them.

The plan’s funding components include:

  • A gas tax increase totaling 23 cents-per-gallon, achieved by a:
    • 7 percent Petroluem Products Gross Receipts Tax with a floor in place;
    • 10 cents-per-gallon PPGRT tax on motor fuel; and
    • 14 cents-per-gallon PPGRT diesel surcharge.
  • A 7 percent PPGRT tax on jet fuel (aviation kerosene) and non-motor fuel.
  • Pilot Vehicular Mileage Tax on non-gas powered vehicles; a $150 individual fee or a $300 fee for businesses with a renewal.
  • $200 million in sales tax revenue dedicated to alleviating debt.

The plan would also lower other tax revenue sources to counterbalance the transportation fund increase, a concept imperative to gaining the support of Gov. Chris Christie (R) for increasing the gas tax. Several “tax fairness” measures tied to the proposed motor fuel tax legislation include:

  • Increasing the Earned Income Tax Credit from 30 percent to 35 percent for individuals earning up to $45,000;
  • Gradually removing the estate tax, moving the threshold from $675,000 to $1 million effective Dec. 31, with a full repeal to take place on Dec. 31, 2019;
  • Increasing the exemption for retirement income for individuals earning $100,000 or less from $20,000 for married couples and $10,000 for individuals to $40,000/$20,000 during the 2017 tax year, all the way up to $100,000/$50,000 for the 2020 tax year;
  • Creating new income tax deductions for contributions to certain New Jersey charities; and
  • Using odometer readings, individuals can establish income tax deductions if their gas tax payments exceed 1 percent of their income.

Several other proposals to increase transportation funding have been introduced in the legislature this session, including raising motor fuel taxes. New Jersey voters will decide on Nov. 8 whether all revenue generated from transportation-related fees should be constitutionally dedicated to the state’s Transportation Trust Fund.