NJ Gas Tax Hike Will Not be Linked to Death Tax Cuts, Lawmaker Says
Talk of a gas tax hike to replenish the nearly bankrupt Transportation Trust Fund will dominate the lame duck session in Trenton after the November elections.
There had been a lot of discussions about linking an increase in the gas tax to the elimination of New Jersey’s estate and inheritance taxes, the so-called death taxes. Garden State residents can expect a gas tax hike bill, but it won’t include death tax cuts.
At a State House press conference Monday, State Senate Budget Committee chairman Paul Sarlo (D-Wood-Ridge), who wants to cut the estate tax made it sound like a gas tax hike proposal was a foregone conclusion, but a death tax cut was not.
“We need to first come up with a plan on the TTF. If it’s necessary and we need the political support the estate tax could be joined, but they’re not connected in the same piece of legislation. Clearly I’m in support of it, but let’s not connect them at the hip and write them in the same bill,” Sarlo said.
Dating back to 1892, the transfer inheritance tax is one of New Jersey’s oldest taxes. The 16 percent tax is applied when property is transferred outside the immediate family. Another so-called “death tax,” known as the estate tax, is applied on property valued at more than $675,000.
The top Republican in the Assembly said Democrats need to give GOP lawmakers the lay of the land before they started pushing for an increase in the gas tax.
“Let me hear my friends across the (political) aisle who’ve raised 115 taxes tell me what taxes they’re going to lower and then we’ll start talking about the gas tax,” said Assembly GOP Leader Jon Bramnick (R-Westfield). “I don’t care about the word ‘linked.’ What I care about is hearing them say there is something in New Jersey that they want to reduce.”
One existing proposal would completely repeal the transfer inheritance tax and amend the estate tax to increase the filing threshold to $5.1 million. The only other state to impose both of the so-called death taxes is Maryland.
“The Republicans are looking for cover to justify improving and fixing the roads,” said State Sen. President Steve Sweeney (D-Thorofare).
The Democrats are the ones who raised taxes so they are the ones who need cover Bramnick said.
“Small business owners understand that the TTF is in crisis and needs an infusion of money,” said Jerome Montes, business representative for the New Jersey Main Street Alliance. “However, a bad situation is not a good reason for our elected leaders to make a bad deal that will cause massive budgetary problems. Tying a gas tax increase to cutting or eliminating the estate or inheritance tax could open an $800 million hole in our state budget, and have disastrous consequences for small businesses and the communities they serve.”