NEW INFO ABOUT THE PROPOSED 23-CENT PER GALLON GAS TAX INCREASE
$15/HOUR MINIMUM WAGE PROPOSAL TOOK FINAL LEGISLATIVE STEP TODAY
EMPLOYEES FILING CRIMINAL CHARGES AGAINST EMPLOYERS OVER PAY DISPUTES

Since last week’s Road Warrior, rumors and misinformation have swirled around the proposed 23-cent gas tax increase.  The details that I outlined last week are still valid. However, there is an important detail that was not discussed last week, which is now clear in the official language released early Tuesday morning. Here’s what we learned:

• The Motor Fuels Tax will stay at 10.5 cents/gallon for gas and 13.5 cents/gallon for diesel. There is going to be NO increase in the Motor Fuels Tax.
• The Petroleum Gross Receipts Tax will be a combination of the current flat tax of 4 cents/gallon AND a new percentage-based amount of 12.5% of the average retail gasoline prices (minus taxes), adjusted quarterly. 
• The tax amount calculated on the day that the bill goes into effect will be the FLOOR, meaning that even if gas prices drop at any point in the future, gas taxes will not fall below the starting amount. Here is how the gas tax will be calculated:
  • Average Retail Price of gasoline = $2.11
  • Subtract $0.33 in gasoline taxes = $1.78
  • Multiply $1.78 by the 12.5% tax rate = 22 cents
  • Add on the current 14.5 cents/gallon that you already pay.
  • TOTAL GAS TAX = approximately 36.5 cents/gallon.

• I don't know when the new tax will take effect. Theoretically, if the legislature passes the bill this week, and the Governor signs it, the increase will occur July 1.
• Regardless of when the tax goes into effect, the State will be sending you a tax return, and you will be responsible for paying the NEW tax on whatever fuel you have in the ground on the day that the increase goes into effect. You will be charging customers for that NEW tax on that day, and the State wouldn’t want you keeping that extra 22-23 cents to yourself if all of the fuel you were selling was purchased at the old (14.5 cent) tax rate, now would they?

Keep in mind this is very fluid. There is the potential that Democrats and Republicans will NOT come to an agreement, and we will not see a tax increase on July 1.  Each and every day beyond July 1 that goes without a solution will make the problem worse, and will continue to jeopardize the agreement that I have with the Legislature to NOT impose sales tax.  

In fact, in my conversations with legislative leadership as recently as yesterday, I have learned that the sales tax is still an option that many legislators favor!!  If this deal fails, I predict that sales tax will be back on the table!!  So it’s important to us that an agreement is reached!  This legislation provides funding for the TTF for 10 years, and I'd love to get a somewhat long-term solution to this problem, instead of increasing the gas tax 5 cents/gallon right now and then having to revisit another broke TTF in two years.
 
We also must look very favorably on the tax cuts that are incorporated in the gas tax legislation. The phase out and total elimination of the estate tax could result in hundreds of thousands of dollars you will be able to pass to your children upon your death, that otherwise would be paid before they inherit your assets.  This is a big deal for those of you who own the property that your fuel or repair business occupies.  Many of those properties will be worth several millions of dollars at some point and are currently subject to a 37% tax upon your death.
 
The $15/hour minimum wage is another extremely serious issue that we have been battling. Last Thursday I was in Trenton with NJGCA member Marty Gallagher to give legislators a first-hand look at how devastating a $15/hour minimum wage would be to our members. Marty did a really great job detailing the issues and the consequences to his business that a $15/hour minimum wage would produce. You can listen to the testimony that Marty and I gave by clicking HERE, and I have included a picture from the hearing at the end of this message. As of the writing of this Road Warrior, the full Senate is voting on passage of this bill, which would send it to Governor Christie.  We assume that the Governor will veto the bill, but the Legislature can pass it again next year and get it on the ballot for the voters to amend the NJ Constitution in November 2017.
 
A final legislative issue that we are working on revolves around a bill that permits an employee to file criminal charges against their employer in municipal court if they do not receive proper wages. This bill was heard this week in the Assembly Judiciary Committee, and it was the identical version of the bill that we opposed three weeks ago in the Senate.  After the hearing in the Assembly, we were able to take our concerns straight to the bill’s sponsor, and we had a private meeting with her yesterday. Luckily, Assemblywoman Quijano seemed very receptive to the issues we presented, and she agreed to ask the Assembly Budget Chairman NOT to consider the bill today, as he originally planned to do, in order to allow us to work on the bill with her and to negotiate some more favorable terms for employers. Again, as of the writing of this message, we have no guarantees that the bill will be taken off the schedule, but the Assemblywoman left us with a high degree of confidence that she understands our concerns and she will speak with her colleague to allow us more time to discuss the bill’s consequences on small business owners.
 
It has been a crazy week defending your interests in Trenton but we will have some great back-room negotiating stories to tell at some point.  Enjoy the weekend and I’ll report next week on the status of these very important pieces of legislation.

 
Sal with NJGCA Member Marty Gallagher in Trenton discussing the detrimental effects of a $15/hour minimum wage

Thanks for reading -- See you all next week!

Sal Risalvato
Executive Director

06/23/2016:
$15 minimum wage approaching final legislative passage
The state Senate will vote today on a bill to raise the minimum wage to $15 an hour, one of the more contentious issues before the Legislature. That measure would raise the minimum wage from $8.38 to $10.10 on Jan. 1, 2017, and then by more than $1.25 an hour until 2021. After 2021, the wage floor would increase annually based on changes in the consumer price index. The proposal from Democratic leadership in the Senate and Assembly has already passed the Assembly. The Senate, which is controlled by Democrats, is likely to approve the measure and send it to the governor, who has signaled he will veto it. The proposed update would increase New Jersey's $8.38 minimum wage by 80 percent. The bill (S15) is the product of a deal Democratic leadership reached in February to raise wages. Business owners and groups testifying before legislative committees have warned the sharp increase in labor costs could force them to raise prices, cut hours and staff, and possibly close up shop, shrinking the labor market. Workers and worker advocates, meanwhile, have spoken on the hardship of trying to get by on the minimum wage in such a high-cost state.
 
 
06/21/2016:
Who are the winners and losers of proposed 23-cent gas tax increase?
State lawmakers on Monday introduced an extensive plan to raise money for road, bridge and rail improvements that trades one tax hike for a number of tax cuts. That plan has been criticized by some lawmakers and progressive advocates as a "shell game" that will create winners and losers of New Jersey residents. In addition to raising taxes on gasoline, that proposal reduces the amount of retirement income that is subject to income taxes, raising a tax credit for the working poor, eliminates the estate tax and creates deductions against income taxes for charitable donations. Click above to see some of the potential winners and losers in the legislation.
 
 
6/20/2016:
N.J. gas prices are the lowest they've been in 12 years. Will they last?
Summer is here and so is $2 gas. Despite record demand by drivers, experts predicted the state will see below $2 a gallon prices through July 4. What's making that happen? A glut of 531 million barrels of crude oil that is making its way through the refining process and on to the street as gas and diesel fuel, said Tom Kloza, petroleum industry analyst for the Oil Pricing Information Service. "We'll cruise through most of the season where the (state) average price may be $2.10 to $2.12, and you'll be able to buy sub-$2 gas through July 4," Kloza said. "We'll start (the season) with the lowest retail prices for summer since 2004." Gas prices are down 20 cents a gallon from where they were two weeks ago, he said. That's despite tying the record for demand for gas last week.  Normally, more driving would send prices skyrocketing.