New Jersey became one of the highest-income, wealthiest states by taking advantage of its location in the middle of the world's largest markets with convenient access to New York. No other state can make the same claim, but location is only a critical advantage if New Jersey improves and modernizes its roads, bridges and public transit networks. And the Transportation Trust Fund, New Jersey's bank for transportation capital projects, goes belly-up this July with only enough funds to pay off its surging debt.
Finally, after years of the state's political leadership pretending that band-aids and patches would suffice, the assembly speaker and senate president have owned up to the magnitude and urgency of the pending emergency. They've even put a realistic number of $2 billion as the amount in new funding required if the Fund is to be put on a stable footing going forward. In this unusual acknowledgement, they've been joined by Gov. Christie's recently appointed transportation commissioner, Jamie Fox, who is highlighting the deteriorating conditions of highways and bridges and calling for immediate action to raise the money required.
Meanwhile, the governor repeats that "everything's on the table" (meaning, presumably, that he might sign tax increases) as he alights in New Jersey from his heavy international and national travel schedule.
But it increasingly appears that the political price to salvage the state's core economic asset and secure the governor's signature on a gas tax hike is to eliminate or reduce New Jersey's estate tax. Presumably, national Republican primary voters will somehow forgive the governor if he accepts a major tax hike that everyone pays by getting rid of a modest tax that a very few pay.
Here are three reasons that this swap is a perfectly terrible idea:
1. New Jersey is broke.
Each year it spends more than it takes in by employing accounting gimmicks like postponing property tax rebates until the next fiscal year, thereby "balancing the budget." It also borrows from the next generation to pay for services that only current residents benefit from. The last thing any responsible leader should be discussing is digging the state into a deeper hole by cutting up to $350 million in revenues.
2. There's no connection between fixing New Jersey's biggest competitive advantage --its location with a transportation network that works -- and improving the lot of the four percent or so of families that pay estate taxes.
When the Chamber of Commerce's president is leading the fight to raise taxes to pay for our transportation needs, you know we have a big problem that affects everyone - and everyone must pay for the solution. On the other hand, the estate tax is a manageable problem for few New Jerseyans - one that could be sensibly included in a comprehensive review of all state taxes, but not one to be cut or eliminated in a vacuum.
3. The proposed deal ignores those who will suffer the most from any increase in fuel taxes to take care of those who will suffer the least.
New Jersey families earning less than $45,000 stand to pay the most towards a new gas tax as a share of their income, foregoing other necessities to pay the tax., while those at the top will hardly notice. If lawmakers are truly interested in putting together a tradeoff deal that is fair to working New Jerseyans, they ought to instead restore the 2010 cut to the state Earned Income Tax Credit, which would give enough of a boost to 500,000 families at the bottom to avoid visible and painful cuts.
Fixing the state's transportation mess is crucial. And there's no alternative but to find significant, stable funding to do so.
Nor should the politics of Gov. Christie possibly seeking his party's presidential nomination trump responding to New Jersey's emergency. This is an immediate and defining test of the governor's legacy: does his personal ambition overtake his oath to meet New Jersey's glaring needs and serve all its people? Or, is his price for fixing New Jersey's transportation mess to worsen the state's badly deteriorated financial condition by taking care of the fortunate few?