By David Madden

By David Madden

TRENTON, NJ (CBS) — This time of year, talk in the New Jersey capitol centers on the state budget. That debate is all but done, with a spending blueprint awaiting Governor Chris Christie’s likely signature and expected line item changes.

This year, it’s all about trying to fix the Transportation Trust Fund, which runs out of money this week. And a new deal struck overnight between Assembly leaders and Governor Chris Christie could pave the way to solving that problem.

The gas tax still goes up 23 cents a gallon, but in return the state’s sales tax drops from 7 to 6% by 2018 and tax exemptions for retirement income increase over time to 100 thousand dollars a year.
The accord drops an elimination of the estate, or so called “death tax” along with an increase in the earned income tax credit.

Assemblyman John Burzichelli (D-Gloucester County) voted in favor of the altered package. “We’re really moving numbers around,” Burzichelli told KYW Newsradio. “I was there when the sales tax was raised and I would like to see the sales tax lowered.”

While the gas tax fixes the TTF problem, the tax cuts are expected to blow a 1.7 billion dollar hole into future budgets. This year’s proposed budget has been passed and sent to Christie, who helped to broker the late night deal with Assembly leaders.

Burzichelli concedes the gas tax hike will be hard to take, but said “we’re out of gimmicks. We’ve kicked the can down the road too long. Frankly there should have been some movement at the gas pump over a period of time.”

Christie’s office issued a statement Tuesday morning saying the deal meets the Governor’s call for “tax fairness”, and labeled the deal “the first broad based tax cut for all New Jerseyans since 1994.”

All this begs the question, where does the state Senate come down on the TTF? Traditionally deals such as this are hammered out between Christie and State Senate President Steve Sweeney. Not this time. Christie said he looked forward to “working with the Senate between now and Thursday to hopefully bring this issue to a successful conclusion.”