The New Jersey Assembly's Democratic leader introduced legislation Friday to constitutionally block lawmakers from diverting money for transportation projects to the state treasury.
TRENTON -- The New Jersey Assembly's Democratic leader introduced legislation to constitutionally block lawmakers from diverting money for transportation projects to the state treasury.
Speaker Vincent Prieto's proposed on Thursday a resolution which asks voters to constitutionally dedicate all current and future gas tax revenue to the Transportation Trust Fund, laying the groundwork for a deal lawmakers are trying to strike to raise taxes on gas to fund statewide transportation projects.
The resolution (ACR1) precedes any actual agreement, but it is anticipated to raise gasoline taxes in exchange for changes to or the elimination of the estate tax. The trust fund will run out of money to pay for new projects this coming summer, with all current taxes collected going to pay off debt.
"Unfortunately no agreement has been reached, but it's important that voters be given the chance to dedicate all money raised by these taxes to transportation needs," Prieto (D-Hudson) said in a statement.
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The 10.5 cent per gallon tax on the sale of unleaded gasoline and 10.5 cents of the 13.5 cent per gallon tax on the sale of diesel fuel are already dedicated to the trust fund. The remaining 3 cent diesel tax, which generates about $25 million a year, is required to be spent on transportation by law but not under the constitution.
Another $15 million collected through the petroleum products gross tax receipts that is also not dedicated would be included, Assembly Majority spokesman Tom Hester said. The constitutional amendment would protect that $40 million in existing revenue plus any new dollars from a tax increase.
"New Jersey drivers want to know every cent they pay in taxes at the pump is being used appropriately," Prieto said. "This gives them that assurance and strengthens any future effort to ensure we have enough transportation funding to keep our state strong."
Senate President Stephen Sweeney (D-Gloucester) told NJ Advance Media on Friday that while he hadn't yet seen the legislation, he supports dedicated revenues.
"I don't think you can do enough of it," he said. "The more you can restrict the dollars that are raised for the intended purpose, the better."
The senate president had just stepped off the stage at an AARP conference in East Rutherford, where he bemoaned the state's porous revenue streams, including a tax on tires that after several years of funding environmental cleanup for tire piles became part of the general fund.
"What happens in this state, and it's happened under Republican and Democratic governors, is you raise a fund for something, and then it winds up in the general treasury," he told the group. "People understand you have to pay for things, but I want to know what I'm paying for."
Democratic lawmakers have suggested New Jerseyans will be more supportive of the hike if revenues are constitutionally dedicated and can't be raided.
Public polls suggest that's not the case.
Six in ten residents surveyed in two separate polls -- Quinnipiac University and Fairleigh Dickinson University -- said they don't want a gas tax increase to raise money for road and bridge improvements.
Thirty-nine percent of those polled did say they don't trust the money would be spent on roads, but 61 percent were opposed even if a the tax revenue was constitutionally dedicated.
"The broken trust that exists between policy makers and the public seems to be an underlying factor in any policy discussion," Krista Jenkins, director of the Fairleigh Dickinson PublicMind poll said of the results.
Some Republican legislators have said they're open to raising the gas tax as long as it's paired with a measure to raise the exemption on the estate tax or eliminate it altogether. New Jersey's threshold, $675,000, is much lower that the federal exemption, and it's opponents say it is driving middle- and upper-middle class residents -- and their money -- out of the state.
Advocacy and public policy groups have warned, however, that such a deal is tipped unfairly toward wealthy New Jerseyans who will benefit from a change in the estate tax and against low-income residents who will feel a gasoline tax hike more acutely.
The proposed ballot measure reads: "Do you approve amending the constitution to dedicate all revenue from the state motor fuels tax and petroleum products gross receipts tax to the Transportation Trust Fund? The dedication includes three cents of the existing motor fuels tax on diesel fuel not already dedicated. The dedication also includes any petroleum products gross receipts tax revenue that is not already dedicated. The amendment would dedicate all revenue from the state motor fuels tax and petroleum products gross receipts tax to the Transportation Trust Fund. The current minimum dedication is $200 million per year. This fiscal year, the revenue from the tax on gross receipts of the sale of petroleum products is estimated to be $215 million. The amendment does not increase the state motor fuels tax or petroleum products gross receipts tax. This change increases the dedication of revenues from current taxes. If the tax is increased in the future, the amendment dedicates the increased revenues that would result from the tax increase."
Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.
