Category: Press Release

New Report Dives Deep into Decisions That Sent New Jersey Into Financial and Economic Tailspin

Posted on by NJPP Staff

FOR IMMEDIATE RELEASE: September 14, 2016
Contact: Jon Whiten, NJPP: 609-393-1145 ext. 15 | whiten@njpp.org

New Report Dives Deep into Decisions That Sent New Jersey Into Financial and Economic TailspinFormer Governor and Treasurer Join NJPP in Releasing ‘Notorious Nine’

 

From betting big on the false economic promise of drastic tax cuts to plugging budget gaps with gimmicky short-term fixes to raiding public employee pensions and health benefits, New Jersey’s finances have taken a beating from bad decision after bad decision over the past two decades. These decisions – in particular the nine highlighted in a new report by New Jersey Policy Perspective (NJPP) – help explain why the state has gone from an economic powerhouse with a coveted AAA bond rating to a state struggling to grow its economy or even make basic ends meet, with a bottom-basement credit rating.

Behind each of the decisions – which were made by all branches of government and both parties – examined in the report were two unstated assumptions:

  • That policymakers happily promised essential services without bothering to pay for them
  • That future taxpayers should bear the burden for today’s spending without the luxury of benefiting from it

“Time and again, New Jersey policymakers revert to their bad old ways and trying to govern by avoiding necessary but hard choices,” said Gordon MacInnes, NJPP President and lead author of the report. “As a legislator or governor, it’s easiest to take the path of least political resistance – but it’s damaging and short-sighted in the long run. And now the “long run” has arrived. We’re here today to highlight these cautionary tales to help our political leaders stop repeating the sins of the past and start putting New Jersey on a path to a better future.”

NJPP was joined in a noon press conference releasing the report by former Governor Jim Florio and former State Treasurer Clifford Goldman, who both noted the importance of understanding past mistakes in order to avoid making similar ones in the future.

“You can’t fix the problem if you don’t understand the problem,” said Gov. Florio. “To fix the dire fiscal situation New Jersey now finds itself in, we must find out how we got here. This thorough and understandable report of the details of that history should be distributed as widely as possible, not only for an accurate historical record, but as future guidance for policymakers as to what not to do.”

“As NJPP documents in this important study, today’s problems were predictable two decades ago, just as tomorrow’s problems are predictable today,” added Goldman, who served as Treasurer under Governor Brendan Byrne. “The crush of daily news events usually swamps the insights that only a longer view can give us and the understanding that NJPP’s report provides.”

While the report focuses mostly on relatively wonky financial policy decisions, there is no doubt that those choices have contributed to the hollowing out of New Jersey’s middle- and working-class families. Property tax relief has declined significantly, while property taxes continued their rise. The cost of a public college education has risen dramatically as state operating support tumbled, leading to higher tuitions and higher student debt. And the list could go on.

“It’s tempting to dismiss the story of this path to financial distress as a narrow one of state budgets, finance, actuaries and complex transactions on arcane debt markets,” said Sheila Reynertson, NJPP Senior Policy Analyst and co-author of the report. “But to do so is to miss the very real and extremely negative effect that New Jersey’s slide downward has had on working-class, middle-class and low-income families across the state.”

Without Access to State Financial Aid, A College Degree Remains Out of Reach for Many Undocumented New Jerseyans

Posted on by NJPP Staff

Leading lawmakers, students and policy experts joined together today to call on the legislature and governor to build on the steps taken in 2013 to help undocumented students in New Jersey have a better shot at a college education.

The state boosted educational and economic opportunities for undocumented students living in the state by allowing them – if they met certain requirements – to pay in-state tuition rates instead of much higher out-of-state rates at public colleges and universities. This has clearly helped more undocumented New Jerseyans pursue a higher education, which will put them – and New Jersey – on a path towards greater economic opportunity. But the cost remains a huge barrier for these students and their families, who have lower-than-average incomes yet are blocked from accessing the need-based financial aid available to their low-income peers, a report released today by New Jersey Policy Perspective (NJPP) finds.

“This is the other piece of the puzzle if we really want to help these students succeed and contribute to society,” said Assembly Budget Chairman Gary Schaer, the first prime sponsor of legislation to extend access to aid as part of the Tuition Equality Act. “Given the ever-escalating costs, many students, even with in-state tuition rates, are finding college more and more financially unattainable. Making this assistance available will make higher education a reality for these aspiring students.”

NJPP has tracked enrollments of tuition equity students since the policy went into effect in the Spring 2014 semester. In the third and fourth semesters under the law, the number of enrolled undocumented students continued to climb, to 407 in Spring 2015 and 577 in Fall 2015 from 138 students in the Spring 2014 semester. But even though enrollment has increased, 577 students – out of more than 145,000 total undergraduate enrollees – is still a tiny sliver (less than one half of 1 percent, in fact) of total enrollment.

Given the high costs of even in-state rates (Rutgers University tuition and fees are over $14,000 a year at the flagship New Brunswick campus) and the low incomes of New Jersey’s undocumented families (average estimated family income is $34,500, compared to $113,394 for all Garden State families), it’s no wonder so few students are enrolling. With these students unable to access federal need-based aid, access to state aid is even more important.

“We’re seeing the number of students enrolled under tuition equity grow, but not by enough. Even with in-state rates, costs at four-year colleges are out of reach for many undocumented families,” said NJPP policy analyst Erika Nava. “New Jersey should follow the lead of eight other states, from progressive California to conservative Texas, and allow these students to apply for aid. This would put them – and the whole state – on a path towards greater economic opportunity.”

But the case for true tuition equity with access to financial aid doesn’t stop at the need of these striving students and their families. It’s also a common-sense investment for the state of New Jersey. As it stands now, New Jersey taxpayers already spend tens – if not hundreds – of thousands of dollars on the primary and secondary educations of these students. Yet when they graduate high school, the state drops them off a cliff by keeping a college degree – and the increased earnings and reinvestment in the state that entails – unnecessarily out of reach.

“No sensible business would invest tens or even hundreds of thousands of dollars in training its workers and then lay them off, but that’s effectively what New Jersey is doing to striving high school graduates by denying them Tuition Aid Grants and other forms of assistance,” said NJPP President Gordon MacInnes. “Such denials harm students and their families and New Jersey’s economy.”

That point was driven home by the story of Money Othatz, a recent graduate of Dover High School and honor student who was accepted to many four-year universities but will have to start at community college instead due to lack of access to financial aid.

“We should be able to get financial aid like our fellow classmates, since our parents paid taxes as well,” Othatz said. “Give us the chance to work hard and chase our dreams, so we can better contribute to our home of New Jersey.”

New Jersey Has Ninth Highest Level of Income Inequality in the Nation – Let’s Not Make it Worse

Posted on by NJPP Staff
Eliminating estate tax will significantly widen the yawning gap between the rich and the rest 

As lawmakers close in on an imprudent plan to eliminate one of New Jersey’s best tools to fight concentrated wealth and inequality, a new report released this week shows income inequality remains at record levels in the Garden State. While New Jersey’s level of inequality dropped ever so slightly from 2007 to 2013, it remains higher than it’s been since the 1920s.

New Jersey is now the ninth most unequal state in the nation, with the top 1 percent earning 25.3 times more than the bottom 99 percent, according to the report, which was published by Economic Policy Institute for the Economic Analysis and Research Network, of which New Jersey Policy Perspective is a member. New Jersey was one of only 15 states where the top 1 percent took all income gains between 2009 and 2013.

“Income inequality in New Jersey remains at heights not seen since the 1920s,” said New Jersey Policy Perspective President Gordon MacInnes. “Those at the top have been doing quite well while the rest of us have been struggling the make ends meet or, worse, falling out of the middle class or even into poverty. Now is certainly not the time to exacerbate the problem by offering sweetheart tax breaks to a few wealthy heirs.”

Other key New Jersey findings:

  • Between 2009 and 2013, New Jersey’s top 1 percent captured all income growth, while incomes for the bottom 99 percent actually shrank. That’s because the top 1 percent saw their incomes grow by 15.2 percent while the incomes of the bottom 99 percent fell by 1.4 percent.
  • The average annual income of the top 1 percent is $1,153,293, which includes everyone in New Jersey who earns at least earn $547,737.
  • The most unequal county in New Jersey is Essex. The top 1 percent there makes 44.8 times more than the bottom 99 percent.

To help stem the tide of rising inequality, New Jersey policymakers should:

  • Preserve the estate tax, which is currently under serious threat, and other progressive taxes that are based on the ability to pay
  • Boost working-class and poor families with smart policies, like increasing cash assistance benefits to deeply poor households under WorkFirst New Jersey, raising the minimum wage and expanding the Earned Income Tax Credit for working families
  • Explore tax policies that will help change the fact that New Jersey’s lowest-income families pay the highest share of their incomes to state and local taxes, while the wealthiest pay the least

There’s No ‘Exodus’ of Rich New Jerseyans

Posted on by NJPP Staff

FOR IMMEDIATE RELEASE: JUNE 8, 2016

Contact: Jon Whiten, NJPP: 609-393-1145 ext. 15 (office) | whiten@njpp.org

There’s No ‘Exodus’ of Rich New Jerseyans
Latest research shows that the benefits of maintaining – and even raising – taxes on the wealthy far outweigh the costs

As New Jersey’s budget negotiations heat up, vitally important tax policy changes are being considered in a haze of anecdote and misinformation about who is moving in and out of New Jersey, why they do and what it means for the state’s wellbeing.

The idea that wealthy New Jerseyans are leaving the state in large numbers to avoid high personal income taxes or taxes on inherited wealth, thereby endangering the state’s prosperity, receives a lot of attention from politicians and State House insiders. But this so-called “exodus” is more like a trickle, and widespread tax flight among the well-off is little more than a myth, according to two new comprehensive reviews of data on interstate moving patterns.

Continuing to give undue attention and credence to this myth harms New Jersey’s ability to create economic opportunities and prosperity for all its residents, as experts from New Jersey Policy Perspective (NJPP) and Stanford University’s Center on Poverty and Inequality explained on a press conference call today.

“Some political leaders are imprudently connecting the widely recognized need to fund our road and transit assets with yet another tax break for the wealthiest among us,” said Gordon MacInnes, President of New Jersey Policy Perspective. “New Jersey can’t meet its current obligations nor invest in its most treasured advantage: its location and transportation networks in the middle of the world’s richest market. Tying essential investment to elimination of the estate tax is reckless economics and unfair to the bottom 96 percent of us.”

The call coincided with the release of a new NJPP report examining New Jersey’s population and moving trends over the past decade. The report makes clear that the billing of “outmigration” as a crisis by some lawmakers and lobbyists is overblown, and very dangerous to the state’s economic future, as the proposed solutions to this purported “crisis” involve tax policy changes that would harm New Jersey’s ability to invest in the assets that form the building blocks of a strong economy.

The report’s key findings:

  • There is no significant correlation between state taxes and interstate moves.
  • Proponents of cutting taxes for the wealthy use a misleading reading of Internal Revenue Service data when they contend that if a person moves from one state to another that automatically means the state they leave loses income as a result.
  • Even if one accurately uses IRS figures on the number of households moving, the patterns and data – if presented in context – tell a very different story – one of population, income and wealth growth – than that peddled by business lobbying groups and others who would deprive New Jersey of resources needed to help communities thrive.
  • Many of the households that do leave New Jersey depart for other high-cost, high-tax states.

“There simply is no empirical evidence to support the notion that New Jersey’s taxes, specifically its income or estate taxes, are driving hordes of people or billions of dollars away and shrinking the state’s economy,” said Sheila Reynertson, Senior Policy Analyst at New Jersey Policy Perspective and report author. “Without that data, there is absolutely no reason to offer tax breaks for wealthy heirs in the hopes that they will stay.”

The NJPP report comes just weeks after the release of a new landmark academic study published in American Sociological Review, which looks at tax returns of wealthy Americans over 13 years, tracking the states from which these millionaires file their taxes. The findings, which are based on data from 45 million tax records, show that millionaire tax flight occurs only at the margins of significance, Charles Varner, a co-author of the study and the Associate Director of Stanford University’s Center on Poverty and Inequality, explained on the call.

“Our study shows that millionaires are quite reluctant to leave a place where they are enjoying great success.” Varner said. “In contrast to the conventional view that elite migration threatens progressive tax policy, state millionaire taxes can be effective levers in moderating economic inequality, particularly the rising share of income held by the top 1 percent.”

In Every County, Very Few New Jerseyans Owe Estate Tax

Posted on by Jon Whiten

FOR IMMEDIATE RELEASE: May 25, 2016
Contact: Jon Whiten, NJPP: 609-393-1145 ext. 15 | whiten@njpp.org

Report: In Every County, Very Few New Jerseyans Owe Estate Tax

Boosting the EITC a Better Option for Tax Fairness

estate-tax-by-county-01In 20 of New Jersey’s 21 counties, fewer than 400 heirs have estates large enough to owe the estate tax in any given year – and in the majority of counties, including every one in the southern part of the state, fewer than 200 heirs owe the tax, according to a new reportreleased today by New Jersey Policy Perspective (NJPP).

The report comes a week after the news broke that New Jersey is facing a $1 billion budget hole in the next 14 months, and in the midst of an ongoing campaign by the governor, some legislators and business lobbying groups to eliminate this tax on inherited wealth. Despite the fact that doing so would cost New Jersey $550 million in annual revenue, last week a leading Senator behind this push said efforts to eliminate the tax would continue, despite the state’s dire and worsening financial condition.

“Seeing how few people actually owe estate tax in each county reinforces the fact that wiping it off the books would benefit only the fortunate few and do actual harm to rest of New Jerseyans,” said Sheila Reynertson, NJPP’s Senior Policy Analyst and author of the report. “At a time when we get warning sign after warning sign about how broke New Jersey is, pulling $550 million a year out of our coffers is a big step in the wrong direction.”

The share of heirs that owe estate tax varies by county, from a low of 2.2 percent in densely populated Hudson County to a high of 9.1 percent in wealthy Morris and Somerset Counties. When fewer than 1 in 10 heirs in New Jersey’s wealthiest counties owe the estate tax, it’s laughable to assert that eliminating the tax will help the “middle class.”

Supporters of eliminating New Jersey’s estate tax think it must be part of a package deal to increase the fuel taxes needed to repair and maintain New Jersey’s deteriorating highway and transit networks in the name of so-called “tax fairness.” But eliminating the estate tax would leave New Jersey with $550 million less each year, seriously threatening support for things like public colleges, safe communities and health care.

If real “tax fairness” is the goal, it would be better served by enacting an increase in the state’s Earned Income Tax Credit, which would help offset the fact that low-income and working-class New Jerseyans would pay a higher share of their yearly earnings in fuel taxes than would more well-off households.

And the number of EITC recipients dwarfs the number of estate tax payers. The estate tax repeal would give a tax break to just 3,000 to 4,000 well-off households per year, the majority of whom live in a handful of New Jersey’s wealthier counties. Raising the state EITC would help nearly 600,000 households across the entire state – and cost about one-tenth as much as eliminating the estate tax.

“Eliminating the estate tax in no way guarantees that elderly residents will stick around to enjoy New Jersey winters. That’s fantasy,” said Gordon MacInnes, NJPP’s President. “But raising the EITC guarantees immediate fairness for low-income and working-class New Jerseyans who would actually notice the hit to their wallets from higher fuel taxes, unlike the state’s wealthiest households.”

Marijuana Legalization Could Bring $300 Million in Tax Revenue to New Jersey

Posted on by Jon Whiten

New Jersey would bring in hundreds of millions of dollars in new revenue by legalizing marijuana, a new report released by New Jersey Policy Perspective and New Jersey United for Marijuana Reform has found. Legalization, taxation, and regulation of marijuana for use by adults aged 21 and older would ultimately add an estimated $300 million in sales tax to state coffers rather than divert consumers to the illegal market, the two policy-focused groups said at a Trenton press conference.

“The lessons from around the country are loud and clear: marijuana legalization makes fiscal sense, and it makes practical sense,” said New Jersey Policy Perspective Policy Analyst Brandon McKoy, a co-author of the report (pictured at right speaking at this morning’s press conference). “Expanding economic opportunities and addressing our persistent budget deficit aren’t the only reasons to legalize and regulate marijuana, but they are extremely persuasive ones.”

The report estimates that New Jersey would bring in at least $300 million annually if marijuana legalization were fully implemented, using graduated tax increases over a three-year period, going from 5 percent, to 15 percent, to the final rate of 25 percent. The first-of-its-kind report in New Jersey relies on conservative estimates, predicting the tax revenue only from marijuana sales. The report’s projections are based on the experiences of other states, current information on marijuana users in New Jersey and the surrounding area, current pricing, and the tax structure of other states as they relate to New Jersey’s interests.

Including a small percentage of New Yorkers and Pennsylvanians from counties neighboring New Jersey who are expected to participate in the legal, regulated market, the state could take in approximately $305.4 million once the sales tax is fully scaled to 25 percent, the report said. The report estimates that approximately 343,100 New Jerseyans would participate in a legal marketplace, spending $1.2 billion each year. Currently, New Jerseyans spend more than $850 million on marijuana each year. The calculation of tax revenue was based on a price of $350 per ounce, similar to the current estimated price of $343 per ounce in New Jersey.

Legalization would bring other economic benefits not covered in the report, such as job creation, growth in business, research and development, and boosts in property, agricultural, business, and income taxes. In addition, it would increase public safety, protect young people, save resources, advance racial justice, bolster public health, and reduce the strain on the police, corrections, and the criminal justice system, the report argues. New Jersey arrests more people for marijuana possession each year than for any other crime. A June 2015 Rutgers-Eagleton poll found that 58 percent of New Jerseyans support legalizing, taxing and regulating marijuana for use by adults aged 21 and older.

“Facing yet another budget shortfall, New Jersey is again confronted with the untenable choice of either further draconian cuts or massive tax increases in order to balance the state budget,” said New Jersey United for Marijuana Steering Committee member Bill Caruso, Of Counsel at Archer & Grenier and former Executive Director of the New Jersey Assembly. “But, we have the ability to generate hundreds of millions of dollars in new revenue and create tremendous economic opportunities in our state by capitalizing on New Jersey’s geographic location and our world-class education and health care infrastructure. It’s time for New Jersey to get off the sidelines and into the game to join success stories like Colorado and Washington State. For every day that passes without safe and responsible legalization, taxation, and regulation of marijuana in our state, we are leaving money on the table.”

To set up a legal, regulated market and increase public health, the report recommends:

• Introducing graduated tax increases in the first three years

• Building flexibility into the tax rate to account for the challenges of transitioning from an illegal, unregulated market to a legal, regulated one

• Creating a board or committee focused on calculating the right tax rate for New Jersey, preventing use by individuals under 21, undercutting the prices of the illegal market, and maximizing revenue for the state

• Using tax revenue for critical state needs, such as expansion of drug-treatment, drug-abuse prevention, and justice reinvestment

“New Jersey can’t afford to wait – it’s time to legalize, tax, and regulate marijuana,” said Ari Rosmarin, a co-author and the Public Policy Director of the American Civil Liberties Union of New Jersey, which sits on the steering committee of New Jersey United for Marijuana Reform. “With just one vote, the Legislature can raise hundreds of millions of dollars annually, help end a civil rights injustice, and make sure that no more New Jerseyans see their lives ruined for something every president in the last 24 years has done. It’s time for common sense, and that means ending prohibition again.”

Four states and Washington, D.C., have fully legalized marijuana for adult use, and Nevada voters will consider a ballot measure in November to legalize marijuana. Twenty-four states, plus Washington, D.C., and Guam, have instituted medical marijuana programs, and 17 states have decriminalized marijuana possession but not legalized it. States that have legalized marijuana have seen revenues outpace initial estimates. Colorado is on pace to bring in $140 million in tax revenue from marijuana this year, according to the Tax Foundation. According to the Oregon Employment Department, the state has added 2,165 new jobs since its legal marijuana program launched in October 2015, and the sector is expected to see significant additional growth in the coming months.

Patriotic Millionaires Join NJPP in Applauding Movement on $15 Minimum Wage in New Jersey

Posted on by NJPP Staff

qL3oSXWRAfter two key legislative committees moved legislation this week to increase New Jersey’s minimum wage to $15 an hour by 2021, representatives of the Patriotic Millionaires – a group of 200 high-net-worth Americans who are committed to building a more prosperous, stable, and inclusive nation – joined New Jersey Policy Perspective in applauding these first steps towards a livable wage for nearly 1 million Garden State working people.

“All businesses will be able to make more money when so many of their customers get raises, truly strengthening the economy,” said Chair of the Patriotic Millionaires Morris Pearl, Former Managing Director of BlackRock.

“With New Jersey’s post-recession job growth among the slowest in nation, millions of residents unable to make ends meet and a growing wealth gap between those at the very top and the rest of us, it’s clear that the state urgently needs a course correction,” added Jon Whiten, Deputy Director of New Jersey Policy Perspective (NJPP). “We need to shift from the failed trickle-down agenda to prioritize economic policies that work for all New Jerseyans. Bringing the minimum wage closer to a living wage is a big part of that.”

Approximately 1 in 4 New Jersey workers, or 975,000 men and women, would get a raise under the legislation cleared by committees this week, according to a March report from NJPP. The analysis, which explored the characteristics of New Jersey workers earning less than the equivalent of $15 an hour in 2021 – or less than $13.16 in 2015 dollars, found that nearly all are adults, most work full time, many are relatively well educated and many are raising children.

As NJPP policy analyst Brandon McKoy noted in his testimony this week, despite the tired old claims lobbed by opponents of fair wages, there is no correlation between raising wages and job losses. On the contrary, increasing the minimum wage spurs economic activity as people working low-wage jobs have more money to spend on their daily needs. That’s why many of the Patriotic Millionaires who are small business owners advocate for raising the wage.

“I am sick and tired of business owners complaining that their business will not allow them to raise their employees’ wages to a level that they, the employees, can actually live on,” said Vice Chair of the Patriotic Millionaires Stephen Prince, CEO of Sterling Card Solutions. “What they don’t want to recognize is that they have created a situation that is forcing their employees to invest in the business that they own, but the employees get no investment return.”

And while some legislators have raised concerns about how much a minimum wage increase might cost the state itself, which employs – both directly and through contractors – some low-wage workers, the fact remains that an economy built on low-wage work relies on a hefty amount of government funding to help make these working people make ends meet. In New Jersey, state taxpayers contribute approximately $726 million a year to public assistance and safety net programs for workers who aren’t paid enough to get by. (The real cost is almost certainly much higher, since the estimate does not take into account the state’s share of the Earned Income Tax Credit, and because the data used to arrive at the figure is prior to New Jersey’s 2013 decision to expand Medicaid.)

“The low, unlivable minimum wage that exists now isn’t working,” said Patriotic Millionaire Lawrence Benenson, Principal at Benenson Capital Partners. “Raising the minimum wage will create healthier, happier, more productive people.”

Raising the minimum wage to $15 by 2021 would boost the economic security of many working people across the state, who are paid so poorly they cannot get by in high-cost New Jersey. A single adult New Jerseyan working at minimum wage needs to work at least 66 hours a week just to earn enough to afford basic needs. In order to have a more stable household budget, that same worker would need to work at least 94 hours a week.

“The shameful fact that full-time work isn’t enough to lift a New Jerseyan out of poverty should be enough to convince everyone in the state to raise the minimum wage,” said NJPP’s Brandon McKoy. “In order to have a prosperous New Jersey, we need to restore the strength of our working and middle classes. Raising the wage is a crucial step to help get us there.”

About the Patriotic Millionaires

The Patriotic Millionaires are a group of 200 high-net-worth Americans who are committed to building a more prosperous, stable, and inclusive nation. The group focuses on promoting public policy solutions that encourage political equality; guarantee a sustaining wage for working Americans; and ensure that millionaires, billionaires, and corporations pay a greater percentage of taxes.

About New Jersey Policy Perspective

New Jersey Policy Perspective drives policy change to advance economic justice and prosperity for all New Jerseyans through independent research, analysis and advocacy. The nonprofit, nonpartisan organization, founded in 1997, is based in Trenton.

Over Three Dozen Leading New Jersey Organizations Ask the Legislature for Small-Business Tax Fairness by Closing Corporate Tax Loopholes

Posted on by Jon Whiten

Over Three Dozen Leading New Jersey Organizations Ask the Legislature for Small-Business Tax Fairness by Closing Corporate Tax Loopholes
‘Combined reporting,’ a common practice in other states, would also provide resources needed to grow the economy and meet the state’s growing needs

Thirty-seven New Jersey organizations representing hundreds of thousands of state residents are today sending a letter to the state legislature asking lawmakers to promote tax fairness for small, local businesses by closing corporate tax loopholes.

The letter, signed by a spectrum of community, labor, faith, environmental and social justice groups, shows widespread and deep support for what’s known as “combined reporting.” This treats the parent company and subsidiaries of multistate corporations as one entity for state corporate income tax purposes. Their nationwide profits are added together and the state then taxes the appropriate share of the combined income.

combined reporting mapWith recent enactment in Rhode Island and Connecticut, 25 out of the 45 states that have some form of corporate income taxation, plus the District of Columbia, now mandate combined reporting. In fact, this important reform has become so commonplace in other states that nearly all of New Jersey’s largest employers already use it when filing state taxes elsewhere, according to research by New Jersey Policy Perspective (NJPP), which has led recent efforts to enact combined reporting in New Jersey.

“This letter sends a strong message to New Jersey’s lawmakers: the time to close corporate loopholes is now,” said NJPP Deputy Director Jon Whiten. “The track record from across the nation is abundantly clear: this common-sense reform would help level the playing field for small and local businesses and raise significant new resources that New Jersey could invest in the building blocks of a strong state economy.”

A comprehensive bill to require combined reporting – as introduced by Senators Lesniak, Sarlo and Greenstein and Assembly members Holley, Eustace and McKnight – would raise up to $290 million a year in new corporate business tax revenue, according to the Office of Legislative Services. This shot in the arm is particularly timely, given that corporate tax revenues are flat at best as a result of New Jersey’s recent surge in tax subsidies.

The letter will be sent to all members of the legislature today.

Signers:

American Federation of State, County and Municipal Employees – Council 1

American Federation of Teachers – New Jersey

The Anti-Poverty Network of New Jersey

BlueWave New Jersey

Clean Water Action

Communications Workers of America – New Jersey

Communications Workers of America – Local 1032

Communications Workers of America – Local 1037

Communications Workers of America – Local 1081

Council of New Jersey State College Locals

Drug Policy Alliance

Environment New Jersey

Greater New Jersey Pride at Work

Health Professionals and Allied Employees

Housing and Community Development Network of New Jersey

Ironbound Community Corporation

Latino Action Network

Lutheran Episcopal Advocacy Ministry of New Jersey

The Main Street Alliance of New Jersey

Monarch Housing Associates

National Association of Social Workers – New Jersey

New Jersey Citizen Action

New Jersey Communities United

New Jersey Education Association

New Jersey Policy Perspective

New Jersey Public Interest Research Group

New Jersey Sierra Club

New Jersey State AFL-CIO

New Jersey Tenants Organization

New Jersey Work Environment Council

New Jersey Working Families

SEIU – New Jersey State Council

SEIU – 32 BJ

SEIU – Local 617

SEIU – Workers United

SEIU – Local 518

Unitarian Universalist Legislative Ministry of New Jersey

Lawmakers & Advocates: Earned Sick Leave is a Win-Win for New Jersey

Posted on by Jon Whiten

FOR IMMEDIATE RELEASE: APRIL 27, 2016
Contact: Jon Whiten, NJPP: 609-393-1145 ext. 15 (office) | whiten@njpp.org

Workers Would Gain Economic Security, While Modest Cost to Businesses Would Be Outweighed by Likely Savings, According to New Report

New Jersey would have a stronger economy and healthier people if every working man and woman could take days off when they are sick without forfeiting their pay or, sometimes, their jobs. Today, though, over 1 million New Jerseyans – most of whom work in low-wage jobs – don’t get paid when they have to take off for being sick.

While it’s clear that these workers would benefit from a statewide earned sick days policy, New Jersey business owners would also benefit and save money, thanks to a more productive workforce and lower employee turnover, according to a new report released today by New Jersey Policy Perspective, which advances economic justice and prosperity for all New Jerseyans through non-partisan, data-driven research, analysis, advocacy and strategic communications.

Legislative leaders, elected officials and advocates pointed to the report as another reason to move a statewide policy forward.

“New Jersey must continue to lead the way when it comes to protecting the rights of workers to a fair and healthy working environment,” said Senate President Steve Sweeney, co-prime sponsor of legislation to extend earned sick days to all New Jersey workers. “Making sure every employee in our state has earned sick leave will give them the confidence to come to work when healthy and to stay home when ill, protecting the well-being of their co-workers, customers and family. No sick employee should ever have to go to work, out of fear that they could lose their job simply because they needed rest to get healthy. As NJPP’s report shows, employers in areas that already require sick leave, have benefited from the stability of a more productive workforce. Now it’s time to share those same benefits with workers and employers statewide.”

“Earned sick leave means stronger families, stronger workplaces and stronger communities,” said Assembly Speaker Vincent Prieto, who has made enacting earned sick leave legislation a priority. “Workers should never have to choose between caring for their health and keeping their paychecks or jobs. Earned sick leave is a modern and sensible workplace policy that is good for business and will prove crucial to New Jersey’s economic future, stability and strength.”

The report’s key findings:

  • The entire group of businesses employing the New Jersey workers without earned sick days would save up to $104.3 million each year.
  • Businesses in the six sectors with the largest number of workers without sick days would save even more – up to $126.4 million a year.

A bill that would implement a statewide standard, S-799, has cleared a key Senate committee but still needs to approval of the full Senate, as well as the full Assembly, where a similar bill, A-1446, has been introduced.

“Earned sick leave is a basic workers’ right that should be extended to all employees in New Jersey,” said Senate Majority Leader Loretta Weinberg, prime sponsor of S-799. “Doing so will create a better working environment for the more than one million residents who currently do not have this critical benefit and will help to protect the health of workers and their families. Importantly, it will help businesses, too, resulting in increased worker productivity, reduced turnover, and protection against the spread of illness in the workplace that in some industries could pose a threat to the public. This report reinforces the very real benefits that a state earned sick leave law will provide. Workers and employers are already seeing the positive impact of policies enacted on the local level. It’s well past time that we implemented a law statewide.”

“More than one million New Jerseyans do not have access to any form of paid leave through their employer. Earned sick leave policies help workers to stay healthy and more productive, strengthening our economy and creating a healthier and happier workforce,” said Assemblywoman Pamela Lampitt, the prime sponsor of A-1446. “Workers should not have to choose between their health and their livelihood. For many of our working class families, missing a day’s pay may mean not being able to put food on the table for their family. New Jersey has not only a moral obligation but a public health responsibility to provide all of our state’s residents with paid sick leave.”

While opponents claim that earned sick leave will lead to job losses, the experience of cities and states across the country – and right here in New Jersey – shows that just isn’t true.

“We were the first city in New Jersey to pass earned sick leave,” said Mayor Steven M. Fulop of Jersey City. “And now, over a year later, we continue to enjoy a growing economy – the fastest in the state – with more than 6,000 jobs added, hundreds of new businesses opening, and a thriving commercial sector. This is all proof that earned sick leave policies not only benefit workers, but also contribute to a strong local economy.”

After Jersey City passed earned sick leave in September 2013, many other New Jersey cities and towns followed suit. To date, a dozen municipalities across the state have policies on the books, thanks in large part to the dogged efforts of advocates.

“NJPP’s report echoes what we’ve been saying all along, as we’ve worked to help pass 12 municipal earned sick leave ordinances around the state: this common-sense policy is good for workers and the economy,” said Analilia Mejia, Executive Director of New Jersey Working Families. “Now’s the time to take what we’ve learned on the local level and apply it to a strong, consistent statewide standard that covers all workers in every municipality.”

“For the sake of working people across New Jersey, the time has more than come to adopt a paid sick days policy in our state. This report underscores that businesses too will reap the benefits,” said Dena Mottola Jaborska, Associate Director of New Jersey Citizen Action and Co-Convener of the Time to Care Coalition. “Any business owner who continues to oppose the policy is working against their own best interest, in addition to the best interest of their employees. This is both irrational and irresponsible.”

While the main focus of the NJPP report is how businesses could stand to save money under a statewide earned sick days policy, it also reinforces how vital this basic workplace right is for working men and women, particularly the working poor.

“The chance to earn sick time is especially important for low-income parents,” said Serena Rice, Executive Director of the Anti-Poverty Network of New Jersey. “Most child care providers do not give a rebate if your child is home sick, so without paid sick time parents end up paying for care and taking a hit in their paycheck. When budgets are barely balanced, one or two days of the flu can create a crisis.”

 

Undocumented Immigrants Pay $590 Million in State and Local Taxes; Contributions Would Increase by $77 Million Under Reform

Posted on by NJPP Staff

FOR IMMEDIATE RELEASE: February 24, 2016
Contact: Jon Whiten (NJPP), 609.393.1145 ext. 15 & whiten@njpp.org or Kelly Davis (ITEP), 262.472.0578 & kelly@itep.org

Undocumented immigrants contribute more than $11.6 billion to state and local coffers each year, including $590 million in New Jersey, according to a new study released today by the Institute on Taxation and Economic Policy (ITEP). The study, Undocumented Immigrants’ State and Local Tax Contributions, also estimates that New Jersey stands to gain $24 million in increased revenue under full implementation of the administration’s 2012 and 2014 executive actions and by more than $77 million under comprehensive immigration reform.

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“New Jersey is home to a diverse immigrant community, and it’s not surprising that our undocumented neighbors contribute so much in state and local taxes. In fact, the $590 million they pay each year is the fifth highest in the country,” said Erika Nava, Policy Analyst at New Jersey Policy Perspective. “This report is essential in busting the myth that undocumented New Jerseyans don’t pay taxes or contribute to the state’s economy. In fact, just like the rest of us they pay quite a lot already – and would pay more under common-sense reforms.”

With the lack of comprehensive immigration reform at the federal level, states have taken matters into their own hands by advancing pragmatic policies that help both documented and undocumented immigrants. New Jersey has taken some initial steps, but could do much more, including allowing immigrants to drive legally and ensuring that undocumented students who want to attend public colleges and universities have access to state financial aid. As this study shows, undocumented immigrants are already contributing greatly to New Jersey’s economy; allowing them to drive legally or attend college would boost these contributions.

The report found that undocumented New Jerseyans contribute $274 million in property taxes, $49 million in personal income taxes and $267 million in sales and excise taxes to New Jersey and local governments. These tax contributions would be larger if all undocumented immigrants were granted legal status under a comprehensive immigration reform and if President Obama’s 2014 executive action were upheld.

“Regardless of the politically contentious nature of immigration reform, the data show undocumented immigrants greatly contribute to our nation’s economy, not just in labor but also with tax dollars,” said Meg Wiehe, ITEP State Tax Policy Director. “With immigration policy playing a key role in state and national debates and President Obama’s 2014 executive action facing review by the Supreme Court accurate information about the tax contributions of undocumented immigrants is needed now more than ever.”

To view the full report or to find state-specific data, go to www.itep.org/immigration

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