What to Know
Drivers gassing up in New Jersey will have to pay 23 cents more per gallon under a deal reached Friday
The agreement establishes a $2 billion per year trust fund over eight years, along with cuts in the sales and estate taxes
It ends a three-month impasse over how to pay for road, bridge and transit work in the state
New Jersey drivers are about to see their traditionally low gas prices rise — dramatically.
Drivers gassing up in New Jersey will have to pay 23 cents more per gallon under a deal reached Friday between Republican Gov. Chris Christie and Democratic leaders.
The agreement establishes a $2 billion per year trust fund over eight years, along with cuts in the sales and estate taxes and ends a three-month impasse over how to pay for road, bridge and transit work in the state.
Friday's announcement all but resolves a major hurdle for Christie, whose approval rating in the state is at a record low and who is serving as a surrogate for Republican presidential candidate Donald Trump who's in a tight race against Democrat Hillary Clinton.
"There's compromise on all sides here," Christie said. "I'm happy to be a governor now who is going to be able to say that we have responsibly financed (transportation) for a long period of time."
The deal still must be passed through the Democrat-led Legislature, but Assembly Speaker Vincent Prieto and Senate President Steve Sweeney said they're confident they have the votes for the deal to pass. They're planning a voting session on Wednesday.
If it goes forward, it would be the first time since 1998 the state has raised its gas tax. It would also mean New Jersey no longer has the second-lowest fuel surcharge in the country at 14.5 cents. New York and Pennsylvania have higher gasoline taxes, Sweeney and Prieto said.
In addition to the gas tax hike, the deal calls for cutting a handful of other taxes.
The sales tax would go from 7 percent to 6.875 percent by January and to 6.625 percent by July 2017. The legislation would also phase out New Jersey's estate tax, changing the threshold from $675,000 to $2 million in 2017 and eliminating it completely in 2018.
The deal also includes raising the Earned Income Tax Credit, which helps low-income residents, from 30 percent to 35 percent for the current tax year, as well as increasing the tax exclusion on retirement income over four years to $100,000 for joint filers. Veterans would get a personal exemption for state income taxes under the measure.
The impasse between Christie and lawmakers dates to late June and centered on what the governor called "tax fairness," or cutting other taxes while raising the gas tax. He and Prieto reached a deal, but it was rejected by the Senate, which never voted on it.
Now, Christie and leaders call the new measure, which would boost the transportation trust fund from $1.6 billion a year to $2 billion a year, a compromise.
Not everyone is happy about the deal, though. Analilia Mejia, director of the left-leaning advocacy group New Jersey Working Families, said the deal will siphon funds from education and other priorities.