NJ.com- The state's Democratic legislative leaders announced Friday they cut a deal on a plan to raise money for road and rail construction projects in New Jersey, and potentially bring to a close a two-week statewide construction freeze.
Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Vincent Prieto (D-Hudson) renegotiated the tax cut deal as Sweeney was working a separate track with the governor.
They'll need either veto-proof majorities in both houses or to get Gov. Chris Christie on board.
The new deal does not include a cut in the sales tax — a primary component of an agreement Christie struck with Prieto in late June.
"This stalemate cannot continue," Prieto said in a statement. "With efforts to negotiate a compromise with the governor stalled, I'm pleased to reach this new compromise that will provide much-needed investment in our state's infrastructure and tax relief. I will now look for a firm commitment of strong support from Assembly Republicans to keep our roads and bridges safe and workers on the job."
The state's primary source of road funding, the Transportation Trust Fund, expired at the end of July and is expected to run out of money in early August.
The plan closely resembles a funding scheme proposed by the Senate that seemed on its way to becoming law, before Christie stepped in with his own plan that won Assembly support.
The joint proposal would gradually eliminate the estate tax, increase a popular tax credit for the working poor, raise the tax exemption for retirement and pension income — all elements of the original Legislative proposal.
But instead of creating a tax deduction for charitable giving, the latest alternative would provide a small tax deduction for spending on gas taxes and create a tax exemption for veterans.
The tax cuts are designed to offset a new 23 cent per gallon, increase on gasoline sold in New Jersey that would boost New Jersey's second-lowest in the nation gas tax, 14.5 cents per gallon, to 37.5 cents. According to lawmakers, that will fund a 10-year, $20 billion Transportation Trust Fund.
Their plan drops a highly disputed jet fuel surcharge.
The disagreement over tax cuts has led to a statewide road and rail construction freeze ordered by Christie to ration what little money is left in the fund.
The executive order idled more than 900 road projects and hundreds more rail projects worth a combined $3.5 billion.
Industry experts have estimated the shutdown has cost tens of millions of dollars and taken thousands of construction workers off the job.