Category: Statement

Rush to Approve $14 Billion in Corporate Tax Breaks is a Stunning Disappointment

Posted on by Brandon McKoy
Earlier today, the New Jersey Senate and Assembly voted to approve more than $14 billion in corporate tax breaks. This vote follows two years of task force hearings and investigative reporting that showed how costly and ineffective the state’s previous corporate tax incentive programs were. The 300-plus page bill, A4/S3295, was made public less than a week ago and was fast-tracked through the Legislature. In response to today’s vote, New Jersey Policy Perspective releases the following statement. 
 

Brandon McKoy, President, NJPP:

“The rush to approve more than $14 billion in corporate tax breaks is a stunning disappointment, especially at a moment of tremendous suffering and economic uncertainty for so many families. There is broad consensus that subsidizing corporations is an irresponsible and wasteful use of taxpayer dollars, whether it’s research from institutions across the ideological spectrum, independent investigative reporting, or even Governor Murphy’s own tax incentive task force. The bill passed by the Legislature today ignores all of that and instead doubles down on the failed trickle-down policies of the past, with an overall price tag that eclipses that of the infamous 2013 Economic Opportunity Act.

“We acknowledge that this legislation contains important labor protections along with critical provisions for oversight, program assessment, and accountability. Checks and balances are plentiful in this proposal, but the sheer size of it rests on the erroneous assumption that corporate tax subsidies significantly persuade businesses to relocate to New Jersey. The Garden State used to spend approximately $100 million dollars annually on these programs, and comparable states continue to operate at that level. A program of this size goes beyond merely “competing” and represents total fiscal irresponsibility.

“The implementation of this bill bucks the previously stated positions of this administration and is rightly being lampooned by state and national experts alike. In his 2019 State of the State Address, Governor Murphy remarked that it “simply put, is nuts” for the state to forgo more than $1 billion a year in corporate tax subsidies. We agreed with that statement then, and we agree with it now. Over the next several years, New Jersey will be forgoing billions more in revenue while grappling with increased need for education and transit investments, paying back billions in borrowed funds, and maintaining vital services and support for workers, families, and small businesses.

“Now, the same justifications that were used to pass the 2013 Economic Opportunity Act are being used to legitimize this bill. And just as those reasons turned out to be wrong, so will those being used today. The best way to stimulate an economy is by supporting proven sectors of economic growth like education, public transportation, and the development of safe and affordable homes. Expecting investments to trickle down from corporations to communities is a proven failure, a proven waste of taxpayer dollars, and it must end.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.
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NJPP Applauds Passage of Historic Marijuana Legalization Bill

Posted on by Brandon McKoy

Earlier today, the New Jersey Senate and Assembly passed enabling legislation to legalize recreational cannabis in the Garden State. The bill, which sets the regulatory framework for the new legal cannabis industry, comes on the heels of New Jersey voters approving cannabis legalization on the General Election ballot in November. In response to this historic vote, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brandon McKoy, President, NJPP: 

“This is a historic day for New Jersey and a pivotal step toward dismantling the failed War on Drugs, which has disproportionately harmed Black and Latinx communities. Today’s vote codifies the will of the voters who overwhelmingly passed marijuana legalization on the November ballot. It also says loud and clear that prohibition does not work. 

“While there is still much work to be done to improve New Jersey’s legal market and fully secure equity, this is the culmination of years of hard work by social justice advocates who insisted on doing legalization the right way. This bill will use the tax revenue from legal cannabis sales to invest in communities harmed most by the drug war. NJPP applauds the countless advocates, grassroots activists, state lawmakers, and everyone else who made today’s vote possible.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy. In 2016, NJPP released a landmark report detailing how a legal cannabis market could net the state over $300 million in annual revenue, grounding the legalization debate in hard facts and figures.

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New Jersey Cannot Afford $11.5 Billion in Corporate Tax Subsidies

Posted on by Brandon McKoy

Late Tuesday, Governor Murphy and legislative leaders announced a deal to renew New Jersey’s corporate tax subsidy programs. The proposal, which has yet to be publicly released, sets an enormous cap of $11.5 billion over six years. Lawmakers plan to hold hearings on the bill on Friday and pass the legislation on Monday. In response to the proposal and lack of transparency, New Jersey Policy Perspective (NJPP) releases the following statement.

Brandon McKoy, President, NJPP: 

“Fast-tracking an $11.5 billion corporate tax incentive program is a slap in the face to New Jersey taxpayers. Study after study, as well as New Jersey’s own recent history, shows that corporate tax breaks have little effect on job creation or the broader economy. Instead, they rob the Treasury of much-needed funds and make it difficult to invest in areas of proven economic growth, like public schools and transit infrastructure. 

“Good government groups and grassroots activists have fought for years to rein in and reform New Jersey’s runaway corporate tax subsidy program. While this bill includes important oversight and independent review provisions to help prevent fraud and abuse, those safeguards are completely undermined by the bloated $11.5 billion price tag. There is no doubt that this will do long-term damage to the state’s already strained finances. It also normalizes a comically high level of subsidies and cements New Jersey’s status as woefully out of line with the development programs of comparable states. Simply put, New Jersey cannot afford this deal.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.

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At Last! Deal on Millionaires Tax Makes New Jersey’s Tax Code A Lot Fairer

Posted on by Brandon McKoy

By

Published on Sep 17, 2020 in Tax and Budget

Earlier today, Governor Murphy, Senate President Sweeney, and Assembly Speaker Coughlin announced a deal on the FY 2021 budget. The deal includes the “millionaires tax” — a new tax bracket on annual earnings over $1 million — and provides a $500 rebate to middle-class families with children. In response to the budget deal, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brandon McKoy, President, New Jersey Policy Perspective (NJPP):

“New Jersey’s tax code just got a lot fairer with the budget deal announced by Governor Murphy and legislative leadership. Calling on the state’s wealthiest residents to help fund New Jersey’s pandemic recovery is both smart and just policy, especially now during an economic downturn that has disproportionately harmed low-paid workers and communities of color.

“While many states across the country are balancing their budgets with steep spending cuts, New Jersey’s legislative leaders made the right choice in rejecting austerity measures like those made in response to the Great Recession. This deal recognizes the importance of maintaining state investments that grow our economy and protect New Jersey families harmed during the pandemic.

“There is still much more work to be done. Even with this deal, New Jersey needs more resources to meet its obligations, address future challenges, and advance racial equity and economic justice. We eagerly await details regarding funding for programs and will provide analysis of those decisions when they are made public.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.

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Gov. Murphy’s Budget Protects Key State Programs During Pandemic

Posted on by Brandon McKoy

By

Published on Aug 25, 2020 in Tax and Budget

Earlier today, Governor Murphy delivered his revised Budget Address for Fiscal Year 2021. The $32.4 billion budget proposal covers nine months, beginning October 1, and closes New Jersey’s revenue shortfall with a combination of tax increases and borrowing from the federal government. In response to the budget address, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brandon McKoy, President, New Jersey Policy Perspective (NJPP):

“In the face of an unprecedented health and economic crisis, Governor Murphy’s budget proposal thoughtfully protects key state programs and services that workers and their families rely on. These investments — in public education, tuition assistance, tax credits for working families, and much more — are the building blocks of strong communities, a strong economy, and a strong recovery from the COVID-19 pandemic.

“Unlike state budgets passed during the last economic downturn, this proposal recognizes that New Jersey must balance revenue shortfalls by ensuring wealthy individuals and big corporations pay closer to their fair share in taxes. Every dollar raised through new revenue is a dollar we don't have to cut or borrow. These revenue streams will set a strong foundation for a stable recovery, as they provide the state with resources to keep the economy afloat and deliver critical relief to families and small businesses in need.

“This budget falls short in one key area: it neglects immigrants who have been excluded from state and federal pandemic relief. Immigrants play a huge role in New Jersey’s diverse communities and local economies and deserve their share of state aid. We urge state lawmakers to do more to ensure that no one is left behind in the state’s recovery, regardless of where they were born. Only then can we be sure that our recovery will be strong and long-lasting for all.”

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Supreme Court’s Borrowing Decision is Great News for New Jersey’s Pandemic Recovery

Posted on by Sheila Reynertson

Earlier today, the New Jersey Supreme Court ruled in favor of Governor Murphy’s plan to borrow funds from the federal government to balance the state budget. In response to this decision, New Jersey Policy Perspective (NJPP) releases the following statement.

Sheila Reynertson, Senior Policy Analyst, New Jersey Policy Perspective (NJPP):

“Today’s ruling is great news for New Jersey, as it will set the stage for a stronger and faster pandemic recovery. While borrowing should always be viewed with skepticism, the COVID-19 pandemic necessitates this plan. New Jersey is facing unprecedented revenue shortfalls over the next three fiscal years. Without federal borrowing to support state and local governments, lawmakers would be forced to slash critical programs and services at the precise time they are needed the most. We’ve seen the damage caused by a cuts-only approach before. It not only devastated local economies and caused unnecessary hardship, it deepened the Great Recession and hampered New Jersey’s economic recovery. Catastrophic budget cuts during a global pandemic are a nonstarter.”

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Budget Bill is a Mockery of the Legislative Process

Posted on by Brandon McKoy

Earlier today, the New Jersey Legislature released its three-month supplemental spending bill proposal, which relies solely on budget cuts to close New Jersey’s revenue shortfall. The last-minute proposal, released this morning and voted out of the Assembly Budget Committee this afternoon, leaves little room for public input or scrutiny. In response to the spending bill, New Jersey Policy Perspective (NJPP) releases the following statement.

Brandon McKoy, President, NJPP:

“This budget was written in secrecy with zero public hearings, zero opportunities for public comment, and little time for reporters, advocates, or even lawmakers to actually read and fully understand the bill before it was voted on. The budget document itself is unclear and begs more questions than it answers, as it fails to communicate the scale of cuts that are being made. This is a mockery of the democratic and legislative process — one we have all become far too comfortable with  — and completely shut out the families harmed most by the pandemic who will now bear the brunt of budget cuts that could have been avoided. Until this deeply flawed process changes, it’s impossible to expect equitable outcomes. The people of New Jersey need and deserve better.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.

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Pandemic Fallout Justifies Gov. Murphy’s Borrowing Proposal

Posted on by Brandon McKoy

On Thursday, Governor Murphy announced that the state could borrow as much as $9 billion from the U.S. Federal Reserve to fill budget holes brought on by COVID-19. In response to this announcement, New Jersey Policy Perspective (NJPP) releases the following statement. 

Brandon McKoy, President, NJPP:

“The ongoing health and economic emergency New Jersey faces from the COVID-19 pandemic justifies, if not demands, the borrowing proposed by Governor Murphy.

“New Jersey faces unprecedented challenges that endanger the economic security of families and small businesses, and stretch thin the financial resources our state relies on to help those in need. Without significantly more aid from the federal government, we are forced to choose between devastating cuts to public services that families need and borrowing billions of dollars to enable state government to meet its growing responsibilities to its residents. 

“Borrowing, especially at the levels that would be required in this crisis, should always be viewed with skepticism, especially because New Jersey in the past has too often justified massive borrowing to support tax cuts that reduced the state’s ability to invest in the building blocks of economic growth. This situation is different. Borrowing now will speed our recovery out of this recession. This will require a disciplined approach that includes reforming the state tax code to make it fairer by calling upon the wealthiest to pay their fair share toward repaying, on schedule, what the state borrows.

“Policy decisions made in the next few weeks will set the path for New Jersey’s recovery. The worst thing the state could do when it’s in a hole like this is to keep digging. As we learned after the Great Recession, a response centered on cutting services and reducing investments in public needs will only slow New Jersey’s economic recovery, prolong the suffering of those harmed most by the pandemic, and worsen existing racial and economic inequality. Borrowing funds to plug budget holes, while far from ideal, is the best way for lawmakers to avoid harmful cuts in the short-term and maintain a strong social safety net for residents losing their jobs and businesses.”

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Corporate Charity Is No Substitute for Paying Taxes

Posted on by Sheila Reynertson

Earlier today the Senate Select Committee on Economic Growth Strategies heard testimony from recipients of corporate tax subsidies under the Economic Opportunity Act. In response to today’s hearing, New Jersey Policy Perspective (NJPP) releases the following statement.

SHEILA REYNERTSON, SENIOR POLICY ANALYST, NEW JERSEY POLICY PERSPECTIVE: 

“Today’s hearing does nothing to discount the testimony of national experts and economists from earlier this month. The facts remain that New Jersey’s corporate subsidies are a national outlier, as the state spends way more than it should for every job created. At the rate New Jersey pays in corporate subsidies — $196,388 per job to Subaru and $235,902 per job to American Water Works — taxpayers will never break even. This is a failed approach to economic development.

“Instead of providing data on job creation, the companies that testified today touted their philanthropy work. In an era of runaway economic inequality, charity is no substitute for paying taxes. Lawmakers must rein in the state’s corporate tax breaks with hard caps, shorter timeframes, and greater oversight.”

Read NJPP’s latest report on reining in corporate subsidies:
https://www.njpp.org/budget/reining-in-corporate-tax-subsidies-a-better-economic-development-playbook-for-new-jersey

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FY 2020 Budget Turns Page on Gimmicks, Invests in Rainy Day Fund

Posted on by Brandon McKoy

Earlier today, Governor Murphy signed a $38.7 billion budget for Fiscal Year 2020. The budget protects most of the legislature’s spending priorities and dedicates $401 million to the state’s reserve fund — the first deposit in over a decade. In response to the budget, and lack of a millionaires tax, NJPP releases the following statement: 

BRANDON McKOY, PRESIDENT, NEW JERSEY POLICY PERSPECTIVE: 

“The budget signed by Governor Murphy is about much more than dollars and cents, as it represents a commitment to New Jersey’s middle class families and the state’s long-term fiscal health. It also strikes an important balance between the governor’s original proposal and what was ultimately passed by the Legislature. Collectively, these efforts make huge investments in assets proven to grow the economy, like NJ Transit and good public schools, and provide the state with sustainable savings achieved through collective bargaining. 

“Through an executive order, Governor Murphy also made the first deposit into the rainy day fund in over a decade, preparing New Jersey for the next recession and improving the state’s standing in the eyes of credit rating agencies. This is a nationally recognized budgeting best practice and a win for taxpayers of today and tomorrow. 

“Governor Murphy signed a responsible budget that turns the page on the short-sighted gimmicks of the past, but more must be done to position the state for long-term prosperity. New Jersey takes in less revenue than it did before the Great Recession, a direct result of almost a decade of tax cuts that primarily benefited the wealthiest individuals and corporations. The restoration of a millionaires tax remains necessary for the state to reliably meet its obligations and continue investing in areas that enable everyday New Jerseyans to thrive.”

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