Explanation of Ballot Questions supplied by the League of Women Voters of NJ

CONSTITUTIONAL AMENDMENTS TO APPEAR ON THE
NOVEMBER 8, 2016 GENERAL ELECTION BALLOT

CONSTITUTIONAL AMENDMENT TO DEDICATE ADDITIONAL REVENUES TO THE STATE TRANSPORTATION
SYSTEM.

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?

This amendment would provide that an additional three cents of the current motor fuels tax on
diesel fuel, which is not dedicated for transportation purposes, be dedicated to the Transportation
Trust Fund. In doing so, the entire State tax on diesel fuel would be used for transportation
purposes. The entire State tax on gasoline is currently dedicated to the Transportation Trust Fund
and used for transportation purposes. The amendment would also provide that all of the revenue
from the current State tax on petroleum products gross receipts be dedicated to the
Transportation Trust Fund. In doing so, the entire State tax on petroleum products gross receipts
would be used for transportation purposes.

This amendment does not change the current tax on motor fuels or petroleum products gross
receipts.

INTERPRETIVE STATEMENT (AS IT WILL APPEAR ON THE BALLOT)

This amendment would dedicate all of the revenue from the State tax on motor fuels to the
Transportation Trust Fund. The current dedication is 10.5 cents per gallon on gasoline and diesel
fuel. The amendment would include an additional three cents of the tax on diesel fuel that is not
currently dedicated. The total revenue from the tax on motor fuels this fiscal year is estimated to
be $541 million.

The amendment also dedicates all of the revenue from the tax on gross receipts of the sale of
petroleum products 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 change the current tax on motor fuels or petroleum products gross
receipts. The dedication to the Transportation Trust Fund ensures that the revenue is only used for
transportation purposes.

BACKGROUND

If passed this amendment constitutionally dedicates all revenue from a tax on the sale of motor
fuels and all revenue from a tax on sale of petroleum products to the Transportation Trust Fund.

The impact of this change would be relatively small, since all of the tax on gasoline sales, and
75% of the tax on diesel fuel, are already constitutionally dedicated to the TTF. The remaining
25% of the latter goes into the general fund to be allocated by the legislature. In 2015, the
legislature allocated all of the undedicated income to the TTF, thus providing $215 million
including the dedicated portion although the required minimum is $200 million.

If the ballot question passes any future increases the legislature may approve in these taxes will
also be constitutionally dedicated.

The Transportation Trust Fund (TTF) pays for maintaining the State’s roads, bridges and many
mass transit projects. The gas tax and tax on petroleum products are two of several sources of
funding for the TTF.

Today the TTF is insolvent, with most of the taxes raised going to debt servicing. This
amendment is a small step toward solving its financial difficulties.

REASONS TO VOTE YES

• The TTF supports vital transportation projects and infrastructure in NJ.

• Future revenues from motor fuel and petroleum products will be dedicated to

infrastructure needs.

• Constitutional dedication ensures that the money is actually used for the TTF.

REASONS TO VOTE NO

• Constitutional dedication of taxes ties the hands of the legislature to make spending decisions as needed in any given budget year.
• The increased amount dedicated is fairly small and may give a false impression that the funding difficulty faced by the TTF has been solved.
• The financial situation of the TTF needs a more comprehensive solution than this modest increase in dedicated taxes.

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CONSTITUTIONAL AMENDMENT TO PERMIT CASINO GAMBLING IN TWO COUNTIES OTHER THAN
ATLANTIC COUNTY

Do you approve amending the Constitution to permit casino gambling in two additional
counties in this State? At present, casino gambling is allowed only in Atlantic City in Atlantic
County.

Only one casino in each of the two counties would be permitted. Each casino is to be located in
a town that is at least 72 miles from Atlantic City. The amendment would allow certain
persons to apply first for a casino license.

INTERPRETIVE STATEMENT (AS IT WILL APPEAR ON THE BALLOT)

At present, casino gambling is allowed only in Atlantic City in Atlantic County. This
amendment would allow the Legislature to pass laws to permit casino gambling to take place
in two other counties in this State.

Only one casino in each of the two counties would be permitted. Each casino is to be located in
a town that is at least 72 miles from Atlantic City. The amendment would allow certain
persons to apply first for a casino license.

The laws passed by the Legislature would provide for the location and type of casinos and the
licensing and taxing of the operation and equipment.

The amendment provides that the State’s share of revenue from the operation of the two
casinos and of the casinos in Atlantic City would be used for programs and property tax relief
for senior citizens and disabled residents. It would also be used for the recovery, stabilization,
or improvement of Atlantic City and other purposes as provided by law. Lesser portions would
be used to aid the thoroughbred and standardbred horsemen in this State and each town and
county in which a casino is located.

This question asks voters whether they approve a constitutional amendment to allow two casinos
to be built in North Jersey. Neither the ballot question nor the official interpretive statement
capture the many specific details of the proposal. The full text of the proposed amendment is 1,500
words, much of it devoted to spelling out exactly how each additional $150 million in state
revenues from the new casinos in a given year would be divided between Atlantic City and other
purposes. If the amendment is adopted, Atlantic City could receive up to $200 million each year for
the first 17 years. After 17 years the percentages devoted to Atlantic City diminish -- eventually,
after 26 years from initial revenues, and continuing beyond that, Atlantic City would receive at most
$42 million (and could receive less) each year. Of the rest (the amount not dedicated for AC) at least
2% must be used for programs to aid the thoroughbred and standardbred horsemen in the state.

BACKGROUND

As noted in the ballot question, the amendment would allow certain persons to apply first for a
casino license. More specifically, bidding for the licenses would be restricted for 60 days to current
Atlantic City casino operators, and after that period any company would be eligible to bid. Details to
be determined include the tax rate the casinos will pay to the state, how much of the revenue would
benefit Atlantic City, and who would control the Atlantic City revenue.

Casinos were first legalized in Atlantic City in 1976. The city was a thriving gambling destination
for decades, but it has recently seen four casinos close as competition from gambling halls has
increased in neighboring states. The primary factor in the arguments for and against the proposal
is the impact on New Jersey’s economy. Following are reasons provided by both supporters
(reasons to vote yes) and opponents (reasons to vote no).

• Additional casinos would increase New Jersey's competitive stance in the northeast gaming
market.

REASONS TO VOTE YES

• These casinos could bring significant tax revenue to New Jersey.
• A substantial part of the tax income from these new casinos would benefit Atlantic City.
• Much of the remaining tax income would support programs and offer tax relief for senior

citizens and the disabled.

• Building and running casinos creates jobs.

• Allowing casinos elsewhere may lead to additional Atlantic City casino closures, which
could cost the city well above the $200 million per year it may gain from the amendment.

REASONS TO VOTE NO

• It is not clear that the northeastern market can support more casinos, or if other states
would respond by adding more of their own (perhaps in Manhattan).

• Casino building jobs would be temporary, and many of the permanent casino jobs are low
wage.

• The casinos would likely go into areas that already suffer from serious traffic congestion
and public transit delays.