By Hilary Russ

NEW YORK (Reuters) - New Jersey's two top Democratic leaders said on Friday that they reached an agreement on raising the state gasoline tax to pay for road, bridge and mass transit projects.

Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto, who previously clashed over what other taxes to cut to make the increase palatable, said their plan would reduce five kinds of taxes while raising the gasoline tax to 37.5 cents a gallon from 23 cents.

Sweeney said he would seek next week to amend existing legislation to incorporate the new plan. New Jersey's gas tax has not risen since the late 1980s.

Governor Chris Christie backed Prieto's proposal, which slashed the state sales tax. Sweeney's previous plan targeted cuts to the state tax on wealthy residents' estates when they die.

Instead, the plan calls for an increase in the earned income tax credit for the working poor, and to the state's gross income tax exclusion on pension and retirement income. It would also phase out the estate tax, provide an income tax deduction for state gas tax payers and allow a $3,000 personal income tax exemption for veterans.

Sweeney and Prieto "have not shared the specific details of their joint proposal with the governor beyond the vague generalities contained in their press release," Christie's press secretary, Brian Murray, said in a statement. 

Christie could only determine if their plan "offers tax fairness to the people of New Jersey in the form of significant broad-based tax relief" once he reviews its details, Murray said.

After lawmakers failed to reach a deal before the start of the new fiscal year on July 1, Christie halted construction projects that relied on the state's Transportation Trust Fund, including repairs to some New Jersey Transit train stations and bus facilities.

Sweeney and Prieto's new agreement also includes a 12.5 percent increase of the petroleum products gross receipt tax, a four-cent diesel surcharge and a 7 percent tax on non-motor-fuel petroleum products, according to a joint press statement.

The plan would generate about $1.2 billion annually for infrastructure investments, the lawmakers said.

The left-leaning New Jersey Working Families Alliance said in a statement that the plan was fiscally irresponsible.

"Although there is no dispute on the urgency to solve New Jersey's transportation-funding crisis, the proposal put forth hinders the future growth and stability by siphoning critical funds from our general fund," said the group's executive director, Analilia Mejia.

(Reporting by Hilary Russ; Editing by Steve Orlofsky)