Gov. Chris Christie and New Jersey state legislators have agreed on a series of tax cuts and funding for the Transportation Trust Fund (TTF), bringing to an end the months-long impasse on the issue that led Christie to order a shutdown of TTF projects.
The plan calls for a gas tax increase of 23 cents per gallon, which the governor’s office says will cost the average citizen of the state between $184 and $276 per year. The plan calls for “flat” transportation investment, but will include $2 billion of work over the next eight years.
“I am pleased to present a plan that represents tax fairness for the residents of New Jersey,” Christie says. “This is the first broad-based tax cut for all New Jerseyans since 1994, which is much-needed. At the same time we are going to have constitutionally-dedicated revenue to improve roads, bridges and the mass transit systems in the state.”
“While it took us some time to get here, in the end everyone worked together and compromised to create a plan we could all coalesce behind —one that puts safety first, puts residents back to work and provides broad-based tax cuts for all New Jersey residents,” says Assembly Speaker Vincent Prieto (D-Bergen/Hudson).
Details of the tax cuts, which officials say could save taxpayers $164 million in 2017 and $1.4 billion by 2021, include:
- On January 1, 2017, the sales tax will go from 7% to 6.875%. The following year on January 1, 2018, the sales tax will go from 6.875% to 6.625%. A .375% decrease in the sales tax is the first statewide tax cut that has been given in New Jersey since 1994.
- Raising the Earned Income Tax Credit for the working poor to 35 percent of the federal benefit amount beginning in Tax Year 2016.
- Increasing 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.
- Phasing out the estate tax over the next 15 months, replacing the current $675,000 threshold with a $2 million exclusion after January 1, 2017 and eliminating the estate tax altogether as of January 1, 2018.
- Providing a personal exemption on state income taxes for all New Jersey veterans honorably discharged from active service in the military or the National Guard.