by Hoboken Strategy Group
So much has happened since we last checked in. Let’s get right into it.
If you have filled up your gas tank since November 1, you may have noticed that the State has increased the gas tax through the re-authorization of the Transportation Trust Fund (TTF). The TTF had run out of funding over the summer and Governor Chris Christie halted all transportation-related construction projects which had been funded with TTF funding. As a result, projects such as the Park Avenue Bridge rehabilitation were halted until a TTF resolution was instituted.
Late in the day on Friday afternoon, September 30, Governor Chris Christie, alongside Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto, announced a bipartisan agreement for the future of the TTF along with the State’s first broad-based tax cut since 1994. The Legislature approved legislation associated with this agreement the following week and Governor Christie signed it into law on October 14.
The bipartisan compromise for the replenishment of the TTF would provide dedicated funding of $2 billion per year through an increase in the gas tax by 23 cents per gallon while also authorizing up to $12 billion in borrowing for an 8-year period. Fiscal estimates have shown that the gas tax increase will cost the average New Jerseyan between $184 and $276 per year. However, the State Department of Transportation and NJ Transit have estimated that the average New Jersey driver spends approximately $600 per year on vehicle repairs caused by the State’s current road conditions.
On the tax cut side, the compromise includes:
- A reduction in the sales tax from 7% to 6.875% on January 1, 2017, followed by a further reduction to 6.625% on January 1, 2018
- An increase in the Earned Income Tax Credit for the working poor from 30% to 35%
- A $3,000 personal income tax exemption for all New Jersey veterans honorably discharged from active duty in the military or National Guard
- An increase in the tax exclusion on retirement income to $100,000 for joint filers, $75,000 for individuals, and $50,000 for filers married but filing separately.
- A phase out of the Estate Tax over the next two years, replacing the current $675,000 threshold with a $2 million exclusion after January 1, 2017 and the elimination of the tax altogether as of January 1, 2018.
After a long wait, transportation and infrastructure projects will receive the State funding necessary to advance. With increases in aid to counties and local governments, long-awaited improvements to the area’s roads, bridges and mass transit systems can be initiated.
Election Day 2016 is now behind us. While New Jersey voters supported former Secretary of State Hillary Clinton with 55% of the vote, Donald Trump earned 290 electoral votes to become President (compared to 228 electoral votes for Secretary Clinton). President-elect Trump has initiated the Presidential transition process. In the coming weeks, we can expect to learn the President-elect’s choices for Cabinet-level positions and White House senior staff.
President-elect Trump will be working with Republican majorities in both the Senate and House of Representatives. Here in Hudson County, voters easily re-elected our Congressional representatives, Congressman Albio Sires (D-8), Congressman Bill Pascrell (D-9) and Congressman Donald Payne, Jr. (D-10). And just in case you are in election overload, get ready because in New Jersey, 2017 will feature a gubernatorial election along with all 120 seats in the State Legislature and several other local offices up for election.
This year, voters in the State split in deciding two statewide ballot questions. Voters overwhelmingly rejected an amendment to the State Constitution to allow for casino gambling in two additional counties in the State, 78% to 22%. As you know, casino gambling is only allowed in Atlantic City. This amendment would have allowed the Legislature to permit casino gambling in two other counties in the State. Under the amendment, only one casino per county would be allowed and would be located at least 72 miles from Atlantic City. Speaking of Atlantic City, a share of revenue from the operation of the casinos would have been used for the recovery, stabilization or improvement of Atlantic City, with the remaining portion of the State’s revenue dedicated to programs and property tax relief for senior citizens and disabled residents.
The demise of this ballot question seemed inevitable for at least the past month when groups supporting the amendment pulled funding for an advertising campaign following a Stockton University poll showing 71% of voters opposed, 24% in favor and 5% undecided. In anticipation of defeat, proponents pledged before Election Day to explore getting the question on the ballot in a future election.
The State’s other ballot question, which was approved 51% to 49% dedicates all of the State’s gasoline and motor fuels tax revenue to transportation funding. The purpose of this amendment would be to constitutionally guarantee that the revenue collected could not be diverted to purposes other than the Transportation Trust Fund (TTF). With the 23 cent per gallon increase in the gas tax, this ballot question faced an uphill battle with opponents of the amendment under a number of misconceptions including that the increase would be eliminated with the rejection of the ballot question and a theory that the amendment would authorize an additional $12 billion in borrowing. The fact is that the gas tax increase could only be repealed by the Legislature and, as we noted earlier, the authorization of up to $12 billion in borrowing was a part of the TTF legislation. So as a result of the approval of this ballot question, motorists can rest assured that the additional money they are paying per gallon is going to transportation-related purposes and nothing else.
A lot has happened in the past few months around and beyond Trenton. As our nation prepares for a new presidential administration and our State gears up for a gubernatorial election, 2017 looks to be an exciting year, we will keep you up to date on all of the action From the Halls of Trenton!
Hoboken Strategy Group is a boutique New Jersey government relations and business development firm made up of public affairs professionals with years of experience handling legislative and regulatory challenges on the local, state and federal levels. Kay Elizabeth LiCausi, President of Hoboken Strategy Group, serves on the Government Affairs Committee for the Hudson County Chamber of Commerce. Michael J. Comba serves as Vice President of Hoboken Strategy Group. They can be reached online at www.hobokenstrategy.com and on Facebook at Hoboken Strategy Group.
Hudson County Chamber of Commerce 