NEW JERSEY POLITICS

Gas-tax deal could boost struggling NJ families

Payton Guion
@PaytonGuion
The earned-income tax credit could help hundreds of thousands of struggling families in New Jersey.

A new report says that an increase in New Jersey's earned-income tax credit — part of last year's deal to boost the state's gasoline tax  — will boost the incomes of nearly 600,000 families in the state.

N.J. Policy Perspective says there are 27,412 families in Monmouth County who could benefit from the increased tax credit. Ocean County has 31,936 families that could get a boost from the credit.

The tax credit was raised to 35 percent from 30 percent, as part of the deal that boosted the gasoline tax by 23 cents a gallon. The added tax credit helps people filing taxes in 2017.

Christie defends the gas tax increase

It works like this: If a family of five makes less than $53,505 annually, or a single person earns less than $14,880 per year, they can qualify for the federal earned-income tax credit, according to N.J. Policy Perspective. The state will then match 35 percent of that credit. So, if a family gets a $1,000 credit from the federal government, New Jersey will chip in an additional $350 credit.

"These are tax refunds that low-paid families look forward to," said Jon Whiten, vice president of N.J. Policy Perspective, a nonpartisan organization that researches state policy, which wrote the report. "It immediately goes into the local economy. They definitely aren't storing them in offshore accounts."

The report estimates the average qualifying family will see their take-home pay increase by between $100 and $300 per year. The extra money will help offset the toll from the gasoline tax increase, which went into effect on Nov. 1. For those who drive 20,000 miles annually, in a vehicle that gets 30 miles per gallon, the cost in added gasoline tax is $153.33 per year.

The report comes on the heels of a United Way report that shows more and more New Jersey families struggling to pay for basic necessities. About 1.2 million New Jersey households – including a growing number at the Shore – don't earn enough to afford such basics as rent and food, according to the United Way.

REPORT: More NJ families can't make ends meet

That's 37 percent of N.J. households, up from 29 percent in 2007, the report found. The new percentage is comprised of the 11 percent of New Jersey households living in poverty and the 26 percent of households whose earnings are above the poverty line but still not enough to afford basic necessities.

In both Monmouth and Ocean county, more households are under such stress.

In Monmouth County, 31 percent of households in 2014 were either living below the poverty line or struggling to make ends meet, up from 22 percent in 2007. Such costs include rent, food, child care, transportation and health care.

In Ocean County, 40 percent of households in 2014 were either in poverty or considered among the working poor, up from 39 percent in 2007.

Both reports come the week after Gov. Chris Christie pledged in his State of the State address to provide more help to the state's "working poor." He did not specify how.

Franklin said increasing the earned-income tax credit is one of the quickest ways to help those in the state struggling to make ends meet.

MORE: Christie errs on tax records for working poor

READ: The 5 lowest-paying jobs in NJ

REPORT: One-third of NJ resident live in 'true poverty'

Payton Guion: pguion@gannettnj.com; 732-643-4245