Chris Christie Rejects New 23-Cent Gas-Tax Hike Plan

Gov. Chris Christie has rejected a new plan approved by leading Democratic lawmakers that would raise the gas tax by 23 cents.

Christie said he reviewed the Democrats’ latest plan to fund the Transportation Trust Fund through a "massive gas tax hike that does not represent tax fairness to the residents of New Jersey."

"Therefore, I cannot support it," he said, calling the plan "dead on arrival."

New Jersey lawmakers last week said they had agreed to a new 23-cent gas tax hike plan that wouldn't include a sales tax cut, as Christie wanted, but would have phased out the estate tax.

Senate and Assembly leaders say the dedicated revenue would generate $1.2 billion annually, which would support $2 billion in infrastructure investments each year and replenish the Transportation Trust Fund that is supposed to run empty by August.

They also hoped to restart projects that were effectively shut down by Christie earlier this month when Senate lawmakers passed on his own 23-cent-per-gallon gas tax hike plan. Christie reached an agreement with Assembly leaders to cut the sales tax by 1 percent.

Read more: $3.5B In N.J. Road Projects To Shut Down Friday: See The List Here

Christie said he and the state Assembly proposed a significant plan for "tax fairness," one that included a reduced sales tax and retirement income tax cuts to offset any increase in the gas tax.

“As I have said for two years, any solution for a Transportation Trust Fund must have as its foundation tax fairness," he said. "This proposal does not. Hopefully when they return to New Jersey after the Democrat National Convention in Philadelphia, the Democrats will put forward a plan consistent with that principle."

The new plan included these tax cuts:

• An increase of the "Earned Income Tax Credit" for the working poor to 40 percent of the federal benefit amount, beginning in 2016. Total tax savings of $137 million annually would be expected.
• An increase of the New Jersey gross income tax exclusion on pension and retirement income over four years to $100,000 for joint filers, $75,000 for individuals and $50,000 for married/filing separately.
• Phase out the estate tax over three and a half years, replacing the current $675,000 threshold with a $2 million exclusion after Jan. 1, 2017, and then phased in after that.
• Provide an annual income tax deduction of up to $500 in state gas taxes paid for all New Jersey motorists with incomes up to $100,000.
• Provide a $3,000 personal exemption on state income taxes for all New Jersey veterans honorably discharged from active service in the military or the National Guard. Total tax savings of $23 million annually would be expected.

“This is a bipartisan plan that supports a $2 billion a year Transportation Trust Fund and provides affordable tax cuts that will allow us to meet the state’s pension obligations without creating a fiscal crisis," Senate President Stephen Sweeney said in a statement. "This is an investment plan that will create jobs and support immediate and long-term economic growth.”