New Jersey officials have listed funding for the Gateway Tunnel and restoring the full federal deduction for state and local taxes atop their wish list in a Joe Biden administration.
Gov. Phil Murphy, who campaigned for Biden and helped raise money for him, used Monday’s coronavirus press briefing to mention “getting the federal funding in line for the new Gateway project rail tunnel under the Hudson River and restoring the state and local tax deduction for our taxpayers.”
U.S. Sen. Robert Menendez, D-N.J. told NJ Advance Media Tuesday that he already has discussed Gateway with the Biden team and plans to do the same with the tax break.
Shortly after Biden takes office in January, his administration can change the rating for Gateway, which was lowered by the Trump administration and made it ineligible for federal funding, Menendez said.
“A new secretary of transportation can look at what happened, which in my mind was strictly political,” Menendez said. “Remember, we had high ratings before Trump came into office.”
“They created every excuse possible to get low ratings,” he said. “If it gets the high rating, that automatically qualifies you for certain pots of money.”
He said there were things Biden could do administratively for taxes as well, such as rolling back the Trump administration’s rule severely limiting the benefit to taxpayers donating to municipal charitable funds in lieu of paying state and local taxes.
Trump revoked the Gateway agreement he inherited where the federal government would pay half the cost of the new train tunnel, which then would allow the existing tubes to be temporarily closed to repair the damage caused by Hurricane Sandy.
Trump went so far as to threaten to threaten to shut down the government rather than fund the Gateway.
Biden endorsed Gateway during the campaign. A frequent user of Amtrak when he was a U.S. senator, Biden’s infrastructure plan called for “putting the Northeast Corridor on higher speeds and shrinking the travel time from D.C. to New York by half – and build in conjunction with it a new, safer Hudson River Tunnel.”
Campaign spokeswoman Shadawn Reddick-Smith reiterated Biden’s support for Gateway to NJ Advance Media on Monday.
“One of the key pillars of his Build Back Better plan is to invest $2 trillion to build a modern, resilient infrastructure and tackle climate change,” she said.
"This plan includes funding for a high speed national rail network and a new, safer Hudson River Tunnel that can withstand the effects of climate change. These investments will create good paying jobs, bolster the local economy, and cut commute times in New Jersey, New York and across the country.”
But the campaign did not respond to several questions about whether Biden would seek to remove the Trump tax law’s $10,000 cap on deducting state and local taxes. That provision disproportionately affected New Jersey and other high-tax states, most of which send billions of dollars more to Washington than they get back in services.
Biden has called for rolling back some of the Trump tax cuts for corporations and the richest Americans but his tax plan was silent on the deduction.
Menendez, a member of the tax-writing Senate Finance Committee, said any discussion of tax legislation would include the state and local tax break, but the success of that would depend on whether Democrats win both Senate seats in Georgia in January and take control of the chamber.
“They obviously have made it very clear they have a different view of how you use the tax code to help middle class working families,”Menendez said of the incoming Biden administration.
Rep. Bill Pascrell Jr., the only N.J. member of the tax-writing House Ways and Means Committee, said he expected to get a friendly reception from the Biden administration.
“The overwhelming election of a new president gives me renewed confidence we can get New Jerseyans the relief they need," said Pascrell, D-9th Dist. "There is no question in my mind that the president-elect understands the burdens carried by our state and shares our unified push to help working people. New Jerseyans are crying out for help and with Joe Biden we’re hoping to deliver.”
The House-passed coronavirus stimulus bill temporarily waved the cap for the 2020 tax year to try to help states like New Jersey and New York that were among those hardest hit by the pandemic.