Fiscal Policy
Judy Cambria Cambria, Fiscal Policy Specialist
Re: Continuing action on legislation /law approving
reauthorization of the Transportation Trust Fund with
constitutional dedication of revenue from the Petroleum Gross
Products Tax ($200 million) and the Sales and Use Tax ($200
million).
The Board of Directors voted at its January board meeting to
oppose legislation to provide additional funding needed to
reauthorize the Transportation Trust Fund by constitutionally
dedicating two additional revenue sources to the Fund. Voters
would be asked to approve dedication of a minimum of $200 million
from the Petroleum Products Gross Receipts Tax and a minimum of
$200 million from sales of new cars from the Sales and Use tax.
This revenue would supplement the constitutionally dedicated
revenue of 9 cents of the 10 ½ cent Motor Fuels Tax
(gasoline). LWVNJ supported the following position:
- Oppose any further constitutional dedication of existing
state tax revenues because it merely shifts already available
funds and fails to address the need for additional new tax
revenues to meet essential transportation needs.
- Oppose any further increase in debt for transportation
without a substantive increase in new tax revenue.
- Do not oppose any plan for raising new revenue that also
calls for constitutional dedication. Support the tax increase
while opposing the constitutional dedication.
LWVNJ testified four times, before the Senate Transportation,
Senate Budget and Appropriations, Assembly Transportation, and
Assembly Appropriations Committees, in opposition to this
legislation. See the League's
testimony.
The League was not alone in its opposition to constitutional
dedication of this revenue. The Whitman administration opposed
such dedication as well. Roland Machold, State Treasurer,
testified at both the Senate Transportation and Senate Budget and
Appropriations Committee that the administration could not support
constitutional dedication. He testified that it would stabilize
the Transportation Trust Fund but would destabilize the state
budget. When questioned, by Senator Kenny, Democrat, at the Senate
Budget and Appropriation Committee, if this meant he (and the
administration) opposed S.16, Machold declined to do so. Following
that, the Treasurer failed to appear at either of the Assembly
Committee meetings on this legislation. And, the Governor signed
S16 after it passed both houses with overwhelming margins. Whitman
had no power to stop the constitutional amendment to dedicate the
revenue from appearing on the ballot; the constitution reserves
this power to both houses of the legislature.
Late in the process, LWVNJ realized that the companion
constitutional resolution, SCR1, that places the constitutional
dedication question on the ballot, was a single ballot question
asking voters to vote yes or no on the dedication of the two
different taxes. This resulted in the League Board voting to seek
legal representation to challenge the constitutionality of this
action. (See companion August SBR, Fiscal
Policy/Constitutional Rights).
If the League’s suit is successful in finding that it is
unconstitutional for the legislature to put two different changes
to the constitution in a single question, the amendment will not
appear on the ballot. This will occur because a constitutional
deadline will have passed for placing the question in newspapers
and sending it to the county clerks for placement on the
ballot.
If the League’s case fails, we will mount a campaign in
opposition to the constitutional dedication question on the
November ballot.
