TRENTON -- State lawmakers under the wire to craft a funding scheme for New Jersey's expiring Transportation Trust Fund on Friday announced plans to lower taxes on retirees and inheritances in exchange for a 23 cent tax hike on a gallon of gasoline.

Leaders from the two chambers Friday afternoon announced similar plans to spend $20 billion over 10 years through the trust fund, which is running out of money for new road, bridge and rail projects.

Gov. Chris Christie signed over responsibility for replenishing the important fund to the Legislature, with instructions that their solution be fair to taxpayers.

So for months, lawmakers have been offering suggestions to meet that demand by pairing a gas tax hike with a phase out of the state's controversial estate tax over four years, elimination of the tax on retirement income for married couples earning up to $100,000, creation of a deduction for charitable giving and gas taxes, and an increase in a tax credit for the working poor.

"Governor Christie has displayed a shocking lack of leadership when it comes to fixing this problem, becoming the first governor in modern history to do nothing as the transportation fund so vital to daily commutes and well-paying jobs nears bankruptcy," state Assembly Speaker Vincent Prieto (D-Hudson) said in a statement.

"We will show leadership where Gov. Christie has failed, and stand ready to hammer out the details of this plan with my legislative colleagues in the coming weeks to strengthen New Jersey's economy."

In the state Senate, Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex) are backing a proposal that wraps in each of those tax changes to offset a 23 cent-per-gallon increase in taxes on gasoline and a 26 cent-per-gallon increase on diesel fuel.

New Jersey's taxes 14.5 cent per gallon tax on fuel is the second-lowest in the United States, after Alaska.

The plan includes a 7 percent tax on motor fuel, jet fuel and non-motor fuel that amounts to about 13 cents a gallon, based on a per gallon price of $1.84. There's an additional 10 cent-per-gallon tax on diesel fuel and gasoline and another 3 cent-per-gallon surcharge on diesel fuel.

Those increased taxes would generate about $1.36 billion a year, from which the state would pay $346 million in existing debt annually, according to the Senate Majority Office.

The $2 billion a year transportation program would be paid for through $500 million in cash and $1.5 billion in borrowing. The Transportation Trust Fund that expires at the end of this month spent $1.6 billion a year.

That increased revenue will allow the state to double the amount of money it sends back to municipalities for road improvements from $200 million to $400 million a year.

"The plan we have put together will save hundreds of millions of dollars for New Jersey taxpayers by ensuring that out-of-state drivers who use our roads pay their fair share for their upkeep," Oroho said in a statement.

Assembly Democrats also unveiled a plan Friday that follows the contours of the Senate agreement. Tom Hester, spokesman for the Assembly Democrats told NJ Advance Media the details of their proposal will be finalized with Republican leadership and the Senate.

Under both proposals, the estate tax will be phased out over four years -- a year sooner than originally offered.

In addition, fewer retired people would be hit by state income taxes. Right now married couples filing jointly pay no taxes on up to $20,000 in retirement and pension income. After three years they'd pay no taxes on up to $100,000. For individuals, the no-tax levels would rise from $15,000 to $75,000.

The Earned Income Tax Credit, a credit for low-income workers, would rise from 30 percent of the federal level to 40 percent.

Under the Senate plan, New Jerseyans could deduct charitable donations for New Jersey nonprofits and a deduction drivers who pay gas taxes exceeding 1 percent of their income.

Despite the slate of tax policy changes, Senate President Stephen Sweeney (D-Gloucester) told The Star-Ledger editorial board Thursday that Christie is likely to veto any plan with a tax increase and Democrats who control both chambers will need help from Republicans to override him.

"I'm going to need a certain number of Republicans to override a governor's veto because, at the end of the day, no matter what cuts we put in place," he said. "I expect him, I think there's a real, real (chance), that he'll veto any tax increase."

While the proposals earned praise from industry groups, advocates worried that it jeopardizes funding for safety net programs and leaves behind middle-class families.

"Neither plan is beneficial to the working men and women of this state who demand tax fairness that raises up families and that doesn't place our education, health care and public services in an even more precarious position," said Analilia Mejia, executive director of the NJ Working Families Alliance.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.