TRENTON, N.J. – Raising the sales tax to fund NJ Transit’s budget deficit is a proposal staunchly opposed by Assembly Republican Leader John DiMaio. Lobbyists pitched the idea of raising the tax from 6.625% to 7% to replace Gov. Phil Murphy’s corporate transit fee that will fund NJ Transit by applying a surcharge of 2.5% to businesses earning over $10 million.
“The last thing New Jersey needs is another tax increase. It’s bad for businesses, the economy, and residents who are struggling to make ends meet in the face of rising costs,” said DiMaio (R-Warren). “When the cost of items goes up, people tend to buy less and cut out things they may need because they simply can’t afford it.”
Lawmakers in 2016 lowered the sales tax from 7% to 6.625% as part of an agreement with then-Gov. Chris Christie to raise the gas tax 23 cents to support the Transportation Trust Fund. At the same time, Republicans secured tax breaks for veterans, increased the earned income tax credit for the working poor and eliminated the estate tax.
“This administration and Democrats want to raise taxes again, increase property taxes to make up for the lack of school funding and now push NJ Transit’s problems on the backs of businesses, commuters and consumers,” DiMaio said. “They continue to move New Jersey in the wrong direction.”
The NJ Transit board recently approved a 15% fare increase that will kick in July 1. Fares will automatically increase 3% every year after. Murphy recently signed off on legislation that would raise the gas tax every year for five years to fund transportation infrastructure projects, and the Assembly passed a bill this month that would allow school districts to raise property taxes up to 9.9% without voter approval if they experienced state aid cuts.
“Democrats talk about affordability, but this is the complete opposite of affordability. People will be tightening their belts even more, which will hurt businesses,” DiMaio said. “New Jersey has a spending problem, not a revenue problem.”