Top New Jersey lawmakers lay out possible tax cuts in exchange for transportation funding

Top New Jersey Democratic lawmakers say they are interested in reducing income taxes on retirees and estates as part of a deal to raise more money for transportation projects.

Assembly Speaker Vincent Prieto and Senate President Steve Sweeney both laid out parts of their visions Thursday at a meeting of the New Jersey Bankers Association.

Funding the state's Transportation Trust Fund has become a major priority for lawmakers. Officials say the gasoline tax that funds it will not collect enough to cover even the debts from past projects after June.

The political problem is that there is not a way to boost funding without taxpayers feeling it.

Republican Gov. Chris Christie, who is considering a presidential run, has consistently said he opposes raising income taxes, but that seems to leave the door open for some other tax increase, perhaps on gasoline.

Sweeney said he thought Democratic and Republican lawmakers were close to a deal recently but that more negotiation is needed. Prieto said lawmakers missed the end-of-January deadline they had given themselves to strike a deal.

Some fissures have been on display this week. On Wednesday, Democratic Assemblyman John Wisniewski and Republican Assembly Leader Jon Bramnick exchanged news releases blasting each other's approaches. Wisniewski, chairman of the Assembly Transportation Committee, said Bramnick was suggesting that school funding be cut, an idea Democrats said should be "dead on arrival." Bramnick responded to say that "reducing spending should also be on the table."

On Thursday, Prieto said one of his priorities is to have a component of any new transportation funding pay for projects as they happen rather than borrowing for all projects. He also wants a plan that can be in place to ensure transportation funding for many years.

Sweeney said he wants plans to include funding for light-rail expansions in both northern and southern New Jersey and for freight rail improvements, as well as road projects.

Both lawmakers pointed out that the state taxes estates worth more than $675,000 and levies an inheritance tax, something conservatives have long complained about. The estate tax threshold, they said, is too low.

They both said the amount exempted from income taxes for retirees should be raised. Currently, the first $15,000 for single retirees and the first $25,000 for married couples are not taxed by the state.

Sweeney said he expects to reach a deal that will have Republican lawmakers on board, even though the Democratic legislative majority makes it technically possible to have one without their votes.

"We're all going to be adults and find a bipartisan solution," he said.

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