State lawmakers in New Jersey are expected to devote time in the weeks ahead to possible solutions to restock the struggling fund that supports transportation projects.
An increase in the state’s 14.5-cent-per-gallon gas tax is among the options getting serious consideration from state lawmakers to head off the state’s Transportation Trust Fund from running out of money for new road and bridge work in June 2016. The fund relies largely on revenue derived from the state’s gasoline and diesel taxes.
The gas tax rate has remained unchanged since 1988. The tax includes a 10.5-cent motor fuels tax and a 4-cent petroleum products gross receipts tax. The diesel rate is set at 17.5 cents per gallon.
Democrats, which represent the majority party in New Jersey, say a long-talked-about tax rate increase would raise about $1.45 billion annually to support the struggling fund.
“New Jersey’s transportation funding woes have reached a critical point,” Assemblyman John Wisniewski, D-Middlesex, said in previous remarks. “Doing nothing and hoping the problem will resolve itself was not an option then, and it is not an option now.”
Assembly Republicans have said they are open to considering a fuel tax increase as long as such taxes as the estate tax are reduced. Republican Gov. Chris Christie, who would need to sign off on any tax changes, has made similar statements.
Wisniewski, chairman of the Assembly Transportation Committee, is the sponsor of a bill to increase the gas tax, but he is opposed to efforts to reduce the estate tax, or so-called death tax. The estate tax raises about $440 million annually.
His bill, A3886, calls for increasing the tax on motor fuels from 4 cents per gallon to 9 percent of the average retail price of gasoline. The rate would also be adjusted annually based on the rate of inflation.
The bill also allows taxpayers to claim an income tax deduction equal to the amount of tax paid for motor fuel from the fuel tax and the petroleum products tax.
In addition, a proposed constitutional amendment, ACR205, from Wisniewski would dedicate all the revenue from the petroleum products gross receipts tax to the Transportation Trust Fund.
Both pieces of legislation await review in the Assembly Transportation and Independent Authorities Committee.
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