August 18, 2020 – Today, 96 economists and policy experts in New Jersey released a joint letter to Governor Phil Murphy and state legislative leadership urging them to balance the state budget with tax increases on the state’s wealthiest residents and biggest corporations instead of counterproductive budget cuts.
The letter warns that state budget cuts are much worse for the economy than modest tax increases targeted to high-income households and corporations, stating “Large cuts would erode the health and social infrastructure needed to continue combatting COVID-19, increase inequality, and exacerbate the economic downturn. Instead of budget cuts, the state should look to raise revenues to balance its budget.”
The letter includes economists and public policy professors from public and private universities across New Jersey. The letter was made possible by the Scholars Strategy Network, an organization of university-based scholars who are committed to using research to improve policy and strengthen democracy. Signatories include Alan S. Blinder and Cecilia Rouse of Princeton University, Yana van der Meulen Rodgers and Henry Coleman of Rutgers University, and Deborah M. Figart of Stockton University.
The economists cite a June 2020 report by New Jersey Policy Perspective (NJPP), a nonpartisan think tank that researches tax, budget, and economic policy, that proposes increasing income tax rates on annual earnings above $250,000. NJPP’s plan would raise approximately $1.5 billion a year in revenue.
“As we learned after the Great Recession, we cannot cut our way out of an economic downturn,” said Brandon McKoy, President of New Jersey Policy Perspective. “New Jersey is facing an unprecedented economic crisis that is uniquely harming low-paid workers and their families. The economists’ letter makes it abundantly clear that budget cuts would make it impossible for the state to provide relief to the families and small businesses who need it most, while also taking money out of local economies across the state. Balancing the state budget without cuts is the best way to build a strong and speedy recovery in New Jersey.”