Senate President Steve Sweeney and Assembly Speaker Vincent Prieto announced Friday that they had come to terms on a new agreement to replenish the state’s depleted Transportation Trust Fund and gradually phase out the estate tax.
The plan calls for a 23-cent-per-gallon gas tax increase, which Sweeney (D-West Deptford) and Prieto (D-Secaucus) say will generate $1.2 billion each year in new revenue and provide support for approximately $2 billion in annual infrastructure investments. The agreement also calls for several concessions in conjunction with the gas tax hike, such as a plan to gradually phase out New Jersey’s estate tax over the next three to four years.
- The attention will now shift to Gov. Chris Christie, who late last month agreed on an 11th-hour plan with Prieto to tie a 23-cent-per-gallon gas tax increase with a decrease in the state’s sales tax from 7 percent to 6 percent. Sweeney didn’t support the agreement, citing budget concerns;
- the new agreement, the plan to phase out the estate tax is similar to a bipartisan bill cosponsored months ago by state Sens:
- the exclusion rate on the estate tax, which currently applies to inheritances valued at $675,000 or more, would be upped to $2 million beginning Jan. 1 and then to the federal level of $5.4 million by Jan. 1, 2018. By Jan. 1, 2020, the tax would be completely eliminated;
- the plan would also increase the threshold for retirement income exemptions for married couples to $100,000 over four years. Exclusion rates would be increased to $50,000 for married couples filing separately and $75,000 for single taxpayers.
- the plan also calls for offering a $3,000 personal exemption on state income taxes to qualified veterans, a $500 annual income tax deduction to in-state motorists making up to $100,000 per year and an increase in the Earned Income Tax Credit program to 40 percent.