NJBIA Comments on S-2412, Revises “New Jersey Transportation Trust Fund Act”

We thank Senate President Steve Sweeney, Assembly Speaker Vincent Prieto, Majority Leader Lou Greenwald and Senators Paul Sarlo and Steve Oroho for the leadership they have shown in developing this important plan.

This is a balanced, bipartisan proposal that addresses our state’s transportation infrastructure needs while beginning to provide comprehensive tax relief, making our state more competitive and affordable.

It is not easy for NJBIA to support a tax increase. We do not take this step lightly. We applaud the efforts of all the stakeholders including legislators, transportation advocates, labor and the business community, who have compromised long-held beliefs to get to this moment. Action is imperative and needed now.

A gas tax increase in 2016 has a different impact than it might have had a decade ago. The transportation business model and driving patterns have changed and New Jersey needs to change as well. New Jerseyans own more fuel efficient vehicles, which use less gas, drive fewer miles and are using mass transportation to a much greater degree. It will also mean lower repair costs for residents’ cars and trucks, which are damaged by our deteriorating roadways. AAA estimates current repair costs to be $600 per year, per driver on average.

In order to ensure that the gas tax revenue is only used for infrastructure purposes, NJBIA is urging voters to approve a proposed constitutional amendment in November that would dedicate all of this revenue to TTF.

NJBIA also supports the creation of a new funding bank for local infrastructure needs. This will provide for more transparency and fiscal responsibility in the expenditure of these funds and will help New Jersey residents understand how their tax dollars are spent.

New Jersey depends on its roads and bridges so businesses can move their goods and employees more quickly, while providing services more effectively. Without a healthy, vibrant transportation network the infrastructure advantages we enjoy over our neighboring states will erode. This is critical for the state’s economic climate.

This is a bipartisan proposal that addresses our transportation infrastructure needs while beginning to provide tax relief for all New Jersey residents. We have long advocated for comprehensive reform that makes the state more affordable for ALL New Jerseyans and more competitive with those states that vie for our businesses and our residents. This proposal is a major step toward that goal.

NJBIA strongly supports the phase out of the estate tax; increase in the pension and retirement income tax exclusion; a state income tax deduction for charitable contributions; and an increase in the Earned Income Tax Credit.

Many New Jerseyans, including our retirees, can no longer afford to live here due to high taxes and high housing and healthcare costs. Raising the pension and retirement income tax exclusion will make this income virtually tax free for thousands of New Jersey middle-class retirees. Combined with the estate tax phase out New Jersey residents will be more likely to stay here, near their families, rather than moving to more tax friendly states.

These tax relief measures represent a significant step toward reversing New Jersey’s consistent pattern of outmigration. We have lost more than $18 billion in net adjusted gross income over the last decade, which has resulted in $11.4 billion in lost economic activity. We also have the highest tax burden and the highest level of outmigration of any other state including the District of Columbia.

Under this plan the deduction for charitable contributions will assist struggling nonprofits, which are having a very rough time right now. As New Jersey citizens make the decision to stay here, so too will their charitable giving, which would now be deductible on state income tax returns.

An increase in the Earned Income Tax Credit will be a significant step toward providing relief to New Jersey’s lower wage earners. This provision of the plan highlights the further recognition that the cost of living in New Jersey is so high that we must provide relief to struggling low- income families.

Overall, we support this balanced bipartisan proposal. Not only will it address one of New Jersey’s greatest needs, but it will reduce the tax burden that many New Jersey residents are facing.

These bills represent a compromise on both sides. NJBIA urges the Legislature to move forward to approve S-2412/A-10 and S-2411/A-11 on an equally bipartisan basis.