It took a marathon bargaining session for the governor and Assembly speaker to cut that surprise TTF deal. And one person wields the power to sink it. He’s State Senate President Steve Sweeney. NJTV News Chief Political Correspondent Michael Aron caught up with him and asked why the Christie-Prieto compromise died in the Senate today.
Sweeney: Well the support, the votes just weren’t there. Tom Kean Jr. announced yesterday in the Republican caucus, the votes weren’t there. So, you know Michael, realize the Senate and the Assembly had a bill that the sponsors of the bill, the speaker was the sponsor of the bill in the Assembly, which was the same one that was in the Senate. We thought we had a compromise bill that worked. We really did. The struggle is, in fairness to the speaker and myself was not passing a bill, but making sure that it could withstand an override of the governor.
Aron: But on this bill, the governor agreed to the plan and if the Senate had agreed to the plan today, the Transportation Trust Fund would be solved.
Sweeney: Except that Michael, what the Assembly did the same day they did this which obviously is much more costly than the plan we have. The plan that we had was $870 million in tax cuts. That’s a lot of money, but over a four-year period. This would blow a billion dollar hole in our budget next year, in ’18. And on top of that, the Assembly passed the constitutional amendment to mandate the pension payment. You know, Michael, doing the two things they did the same day didn’t make a whole lot of sense.
Aron: So it’s just too expensive to cut the sales tax by a penny is what you’re saying?
Sweeney: Well that’s the numbers that we looked at. We think it costs too much. That’s why I want to sit with the speaker, I want to sit with the governor and see what we can come up with. As you said, the governor has already endorsed the speaker’s bill and said he’d sign it. The problem is there’s no will in the Senate on either side of the aisle. But he’s the governor and we want to work with him.
Aron: I did hear that there was very little support in both caucuses for this bill. And yet when you look at it as a citizen, as a taxpayer, the original Senate bill had a phase-out of the estate tax. That only helps wealthy people, basically. Four thousand families is what we heard. This sales tax cut, everybody was going to benefit from that.
Sweeney: Well, first off, it’s not 4,000 families. Every time they throw that number out, it’s not true. Our estate tax is at $675,000. And what that does is, if you own a home in Bergen County, you’re going to get hit by the estate tax. The threshold’s too low, Michael. New York state is at $5.4 million, that’s what the federal level is, with no inheritance tax. Connecticut a few years ago lowered their estate tax from $3.5 million to $2 million and reversed it and put it right back up to $3.5 million because they were having a problem keeping people. We really felt that we had tax policy that is going to help us retain income. That retirement tax cut where you raise the threshold to $100,000, there’s 206,000 joint filers, people over 65 years old, that would have benefited from that.
Aron: That was the piece of the plan that you’ve been pushing for a year and that’s still in the Prieto-Christie plan.
Sweeney: Yeah. But the problem is that the sales tax when we ran the numbers, it was just too rich for our taste. Some people said, Michael, just take the penny in the sales tax, put it in the TTF and forget it. Because that’s 1.3 or 1.4 and what we’re talking is 1.2, 1.3 so the numbers were almost the same.
Aron: Then you don’t get the benefit of taxing out-of-staters driving through if you just hike the sales tax.
Sweeney: Yeah, correct.
Aron: The Transportation Trust Fund, it’s authority to borrow money is finished.
Sweeney: Yeah.
Aron: The transportation commissioner has said there’s enough cash left in the fund to go until early August. What’s the game plan now?
Sweeney: The game plan is to meet with the administration and with the speaker just to find a solution to this thing. My members felt strongly enough, they know the situation we’re in. They know how tight this window is but they weren’t willing to go down the road the Assembly did. They just weren’t willing to do it. I originally looked at it, Michael, and originally looking at some numbers, well maybe this works. And then when we looked at it, especially because the governor showed interest in it. But at the end of the day, the numbers don’t work for us.
Aron: Is this some kind of a breakdown in the system? We got to the end of June, we didn’t fix the Transportation Trust Fund, the two houses can’t get together.
Sweeney: No. You know, Michael, this is one of these things… This is a big vote. You know that. In 2003, we were going to do a gas tax at a nickel and the same arguments you hear today you heard in 2003. It’s outrageous, it’s too much, there’s no way. And everyone starts fighting because everyone knows that you’re not going to be popular with taxpayers, drivers when you do this. I go to the gym. I get up at quarter to 4 in the morning, I go to the gym at 4:30 in the morning. On Tuesday after the Assembly had passed that, I had an earful from people.
Aron: Saying?
Sweeney: You know, don’t do this. Why are you doing it? You guys always waste the money. You know, the same old stuff. How do you ensure the money’s going to be there? I said, well we’ve got a constitutional amendment. Well that’s not good enough. You guys are going to waste it anyway.
Aron: We’re down to our last couple of seconds. You’re going to get it done in July?
Sweeney: We have to.
Aron: Two political conventions on the calendar?
Sweeney: Michael, we have no choice. It has to get done. Again, we offered a compromise that wasn’t accepted obviously by the administration and the speaker, although the speaker was the prime sponsor of our bill. So now we have to go back and work with him and work with the governor to see where we can come together. We have no choice. We have to get it done.
Aron: Senator, thanks very much.
Sweeney: Thanks, Michael.