Legislature’s Budget Plan Would Restore Working-Poor Tax Credit and Preserve SNAP Benefits Through ‘Heat and Eat’ Changes

June 25th, 2014  |  by  |  Published in Budget and Tax Policy, NJPP Blog: As a Matter of Fact ...

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In addition to making the required pension payments by temporarily increasing the income tax rate on income over $1 million and on all corporate tax filers, the budget proposal making its way through the legislature has a number of laudable differences from the governor’s proposed spending plan. The fate of these additions will not be known until the governor exercises his line-item veto. Here’s the rundown.

The legislature’s proposed budget:

• Reverses the 2010 benefit cut to the Earned Income Tax Credit for working poor families. By restoring the credit to 25 percent of the federal benefit, the budget provides about $56 million in vital benefits to half a million New Jersey households.

• Increases heating-assistance payments to low-income households to avoid a $170 million annual federal cut in nutrition benefits to 160,000 households.

• Expands eligibility for Tuition Aid Grants to students eligible for in-state tuition rates under the New Jersey DREAM Act.

• Requires that Homestead Benefit property tax relief payments be made in August 2014 instead of May 2015. The payment shift proposed by the governor would have meant that eligible households would have gone 21 months without receiving any benefits.

• Includes $3.5 million in state funding for Medicaid/NJ FamilyCare outreach and enrollment. These state dollars will generate $3.5 million in federal matching funds.

The new proposed budget, while slightly smaller than the governor’s proposed plan, also makes a number of notable spending increases, including:

• $13.2 million for social service community providers to help maintain staff and increase wages
• $7.5 million for family planning services
• $21 million for cancer programs
• $11 million for payments to nursing homes
• $5 million for Legal Services of New Jersey
• $5 million for vocational rehabilitation services, including extended employment (center based jobs), extended transportation services and long-term follow along services
• $3 million for a new “county vocational school district partnership grant program”
• $3 million for library aid
• $1.565 million for the state’s Educational Opportunity Fund


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