Two town hall meetings on Governor Jon Corzine’s 800% toll hike plan have proven the public is adamantly opposed to the idea. Two Democratic legislators are poised to introduce bills they say would help mitigate the pain of the possible future toll increases.
Assemblymen Pat Diegnan and Neil Cohen say they’ll propose separate legislation to ease the pain of the impact of toll hikes under Corzine’s proposed fiscal restructuring plan through a new tax credit for New Jersey motorists.
Diegnan’s measure would provide a direct credit to residents on their state income taxes equal to the amount of annual toll payments made in excess of $100 over any increase which may take effect. He says, “If tolls are to be increased, New Jerseyans who drive the Turnpike, Parkway, or Atlantic City Expressway to-and-from work daily should be protected…….we must work to minimize the impact of higher tolls on everyday commuters.”
Cohen says his legislation would allow motorists to apply for tax credits of up to $500 on the portion of tolls that would increase under the proposed fiscal restructuring plan. Commuters seeking to take advantage of the credit would either have to be E-ZPass subscribers or keep detailed receipts of their cash toll payments.
“Allowing motorists to apply for a tax credit on the tolls they pay would help reduce the strain on those who use our toll roads out of necessity, not convenience,” says Cohen.
Under both bills, the credit would not be available to commuters who receive reimbursement for tolls from their employer or who can claim tolls as a business deduction on their federal tax returns.
“Businesses already have the ability to absorb the costs of increased tolls, through tax write-offs and cost increases; residents do not,” says Cohen. He adds, “We need to put a system in place that will ameliorate the increased costs that residents – especially those on fixed incomes – would incur.”
Both lawmakers say they are preparing their measures only as a safeguard to New Jersey drivers, should the fiscal restructuring plan become law. Cohen says he has taken no position on the proposed fiscal restructuring plan, as no legislation has been formally introduced.
“I’m not necessarily endorsing the plan, but it is the only plan I’ve seen so far,” says Diegnan. He adds, “I would have real great difficulty voting for the plan if there was not some kind of consideration made for those that have no choice but to take the toll roads.”
Under Corzine’s plan here will be no toll increases in 2008 or 2009, the year before and the year of the next gubernatorial election. In 2010, tolls will be hiked 50% plus the rate of inflation for 08 and 09. The tolls will be increased by 50% every four years after that while also factoring in the rate of inflation.
The Corzine Administration uses $1.21 as the average a toll road commuter pays per day. Under the plan, in 2010 that would go up to $2.05. In 2014, the total would be $3.46. In 2018, it will be $5.84 and in 2022, the final year of the scheme the total will be $9.86. That means a toll road commuter will be paying more than eight times what he or she is paying today to take the same ride in 2022. Tolls would continue to be increased at the combined rate of inflation every four years until the 75-year life of the plan is over.
In his State of the State Address one week ago today, Corzine explained the four elements of his plan saying, “First … I will introduce a budget in February that freezes spending at this year’s current level. Second … for future budgets, spending will not be allowed to exceed recurring revenue growth. Third … we will capture the value in our toll roads to pay down 50% of the State’s debt and fund statewide transportation investments for a generation. And finally … all future debt issued without a dedicated revenue source must be approved by the voters.”
Corzine says the plan should produce the money needed to fund all of the State’s transportation needs. To accomplish these broader goals without the plan says Corzine, “would require a 20% across the board increase in income taxes. I am not recommending that. That 20% increase would be permanent and apply to every taxpayer – not just millionaires. If people think that is too burdensome, we could instead levy a 30% increase in the sales tax. And if you don’t like the first two options, we could propose an increase in the gas tax of about 45 to 50 cents. I think it’s clear… if we were to pursue any of these tax alternatives … we would “lead the league” in the chosen category.”