Category: Blog

Governor’s Modest Budget Vetoes Fall on Most Vulnerable

Posted on by Jon Whiten

While the three-day shutdown, the Horizon bill and “Beachgate” have dominated attention as this year’s budget season came to a dramatic close, there are several modest but important line-item vetoes Gov. Christie made to the final budget that fall on the most vulnerable in the state.

The governor agreed to most of the legislature’s changes to his spending plan, but aimed his red veto pen squarely at some of New Jersey’s most vulnerable residents. It’s a fitting final fiscal act from a governor who through eight budgets has prioritized tax cuts for the state’s wealthiest families and biggest businesses over helping struggling families climb the ladder into the middle class.

Among other things, Gov. Christie axed:

 

Food assistance for struggling families

The governor vetoed language that would’ve restored so-called “Heat and Eat” benefits that tie important federal nutritional benefits to state heating assistance. In 2014 when the federal government changed rules governing this program, most eligible states changed their rules as well to ensure the continuation of crucial benefits. New Jersey chose not to, and as a result an estimated 160,000 New Jersey households that include seniors, people with disabilities and children have had their Supplemental Nutrition Assistance Program (SNAP) benefits cut by an approximate average of $90 per month.

(Background: https://www.njpp.org/blog/op-ed-four-reasons-new-jersey-should-maintain-its-heat-and-eat-program)

Basic assistance for some of New Jersey’s poorest kids

The governor vetoed language that would’ve repealed the so-called “family cap” for Work First NJ. This cap denies basic assistance to children who, through no fault of their own, are born while their mothers are on Work First NJ (also known as Temporary Assistance to Needy Families). This cap has denied essential assistance to over 20,000 babies since its inception and punishes kids for being born poor.

(Background: https://www.njpp.org/blog/repealing-tanfs-family-cap-makes-moral-and-economic-sense)

Paid leave processing & awareness improvements

The governor vetoed language that would’ve directed the state to spend $2 million from the paid family leave program’s fund to improve the timeliness of paid leave claims processing, and $1 million on education and community outreach.

(Background: https://www.njpp.org/reports/boosting-families-boosting-the-economy-how-to-improve-new-jerseys-paid-family-leave-program)

Senate Health Bill a Warmed-Over Version of House Bill

Posted on by Raymond Castro

The Senate bill to repeal the Affordable Care Act is nothing more than a warmed-over version of the House bill, which would cause great harm to the health and economic security of hundreds of thousands of New Jerseyans. The Senate proposal revealed today retains all the major provisions in the House bill that would harm New Jerseyans the most – and in some cases makes even deeper cuts.

The bill would cause New Jersey’s uninsurance rate to skyrocket. (We will not have the final estimate until the Congressional Budget Office completes its analysis, but the phase out of the Medicaid expansion alone would cause the number of uninsured to increase by up to 400,000.)

Specifically, the bill:

  • Effectively repeals the Medicaid expansion that assists 562,000 New Jerseyans. They would lose coverage at a slower rate than under the House bill – but the bottom line is that they would all still likely lose their health coverage. The federal matching rate would be reduced starting in 2021 in the Senate bill, instead of 2020 in the House bill, and it would be phased down over three years. However, many states may not have the funding to pay for the higher state matching rate so they may have to end the expansion for new applicants the first year anyway.
  • Continues the radical restructuring of Medicaid by permanently capping and reducing the funding needed to serve 1.6 million New Jersey seniors, people with disabilities and children. In fact, the Senate makes even deeper cuts to Medicaid.
  • Raises premiums and eliminates subsidies that help reduce costs for New Jersey consumers. There are up to 350,000 New Jerseyans who buy their own insurance who could end up paying much more. This would be an even greater problem when over a half million New Jersey residents lose their Medicaid expansion coverage and must turn to the marketplace for insurance.
  • Allows states to drop basic services like maternity care, mental health and drug treatment. Insurers could in effect still deny insurance to people with pre-existing conditions by simply eliminating the benefits they need from their coverage. It is estimated that 24 percent of all non-elderly residents, or 1.2 million people, have a preexisting condition in New Jersey.
  • Allows insurers to charge older residents five times more than younger adults for their coverage. Over half of everyone in the New Jersey marketplace is age 35 or older.
  • Includes huge tax cuts for the wealthy. Millionaires in New Jersey would receive a tax cut averaging $50,000, which would only increase the enormous income and wealthy inequality in the state.

 

 

 

Legislative Consensus Forming on Paid Leave Improvements

Posted on by Jon Whiten

Yesterday afternoon, the Senate Budget & Appropriations Committee cleared a new, revised version of S-3085, which will improve paid family leave in New Jersey.

The legislation represents a newfound consensus between the Assembly Speaker and Senate President on how best to improve the program, and it closely follows several key recommendations laid out in NJPP’s April report. That said, it still falls a bit short in one area in particular.

New Jersey was a trailblazer in adopting paid family leave in 2008. And while the program has helped many families, with an average of 31,000 New Jerseyans having used paid family leave to either bond with a new child or care for an ill relative each year since its inception, this equals very few people who may be eligible.

  • In fact, NJPP’s estimate is that only 12 percent of eligible new parents are using New Jersey’s Family Leave Insurance. This is lower than in California (17 percent) and Rhode Island (13 percent).
  • What’s more, in New Jersey the usage rate has also remained close to flat since family leave’s introduction – whereas in other states it climbs each year. California’s most recent annual usage rate was, in fact, 20 percent.

There are a few main reasons for this, and chief among them is the state’s woefully inadequate wage replacement of two-thirds of weekly wages. For low-income working families, who already struggle to get by in high-cost New Jersey, losing one-third of your take home pay is often out of the question.

Consider a low-paid worker making $600 a week, or about $15 an hour if they are working 40 hours a week. On leave, the two-thirds replacement rate would provide that worker just $400 a week, the equivalent to $10 an hour – a decrease that an already-struggling family could ill afford.

Meanwhile, an artificially low cap on wage replacements of $633 a week means that middle-class workers are faced with the prospect of losing more than a third of their wages, an unrealistic proposition for the many middle-class families who essentially live paycheck to paycheck in our state.

NJPP has proposed that the wage replacement rate be increased to 100 percent for low-wage workers and 90 percent for higher-paid workers. This bill takes a very positive step in the right direction by increasing the rate to 90 percent for all workers.

In addition, NJPP has proposed that the cap on wages by lifted from 53 percent of the preceding two-year statewide average weekly wage (reminder: this year it is $633) to 90 percent (which would bring it to $1,076 this year). This bill gets about halfway there, lifting the wage cap to 78 percent (which would bring it to $932 this year). This is a dramatic improvement over the status quo, but it falls short of what’s required for workers taking leave.

The other big thing keeping eligible New Jersey workers from using paid leave is a lack of job protection. About 1 in 3 New Jersey workers – the 1 million or so who work at businesses with less than 50 employees – are forced to consider taking leave without the peace of mind of knowing their job will be there for them when they get back. So expanding job protection to all New Jersey workers is vitally important.

This bill extends job protections to more workers, but it leaves out nearly 700,000 workers – 666,000 workers, or 19 percent of the state’s workforce – by cutting off these protections at firms with 20 or more workers.

New Jersey’s Investment in Higher Ed Has Fallen Behind

Posted on by Brandon McKoy

New Jersey likes to tout its reputation for having a high-quality education system that produces some of the strongest students and workers in the country. While it’s certainly true that colleges and universities here consistently rank well nationally, the same can’t be said for our state government’s level of investment in public institutions of higher education.

When taking into account New Jersey’s wealth, our support for higher ed is in the bottom rung of all states. The Garden State ranks 40th nationally (including Washington, D.C.) on the level of tax appropriations per $1,000 in personal income. In other words, despite the high number of wealthy residents and high-income households in New Jersey, the state doesn’t appropriate its tax revenue to support higher education at the level most would expect – especially when compared to our neighbors like New York and Connecticut.

As NJPP showed last year, New Jersey has seen one of the biggest drops in higher education funding per pupil over the past decade. State support dropped from $1.16 billion inflation-adjusted dollars in 2006 to just $725 million in 2015. Looking at state investment per full-time student, funding has dropped from $11,382 inflation-adjusted dollars for the 2005-2006 school year to just $5,744 in the 2013-2014 school year. As a result, tuition levels have increased dramatically in a short amount of time, shifting the financial responsibility for a college education away from the state and onto the backs of working-class families who already have a difficult time making ends meet.

The consequences of high tuition rates have been more students graduating with arrestingly high levels of debt, impeding their ability to move out on their own and start lives independent of their parents. In the 2003-2004 school year, fifty-seven percent of graduates from public 4-year institutions in New Jersey held debt, and the average debt load was $14,539. Just a decade later, in the 2013-2014 school year, those numbers were sixty-nine percent and $28,345, respectively.

In fact, New Jersey is tops in the country for the share of millennials – nearly half – who live in their parents’ home. It goes without saying that having the younger generation saddled with high levels of debt so early in life endangers the future of the state. New Jersey’s system of higher education requires the vast majority of students to borrow so much money that they are far less likely to contribute to the economy because they lack the economic security to start a business, buy a home or a car, and start a family.

With the average of combined in-state tuition and fees among four-year public institutions in New Jersey ranking 4th highest nationally, this is a pressing issue that requires the immediate and sustained attention of lawmakers. Advocates and business leaders all agree that making college more affordable is essential to ensuring that New Jersey retains an educated and innovative workforce – failing to do so will have grave complications for our economy and our future.

‘Fortune 500’: High-Tax States Are Great Places to Do Business

Posted on by Jon Whiten

The latest update to the annual Fortune 500 list of the largest American companies was released this week, and 21 Garden State businesses made the list. It’s an impressive showing for a state that usually falls to the bottom of misleading national rankings that claim to measure how attractive different states are to business investment. In fact, most of these so-called “studies” are promoted by organizations that are not advocating for a truly stronger business climate but only for lower corporate taxes.

Perhaps the most popular of these rankings is the Tax Foundation’s annual “Business Tax Climate” index. Business lobbying groups in New Jersey and anti-tax lawmakers frequently cite New Jersey’s perennial dismal ranking on this survey as proof that the Garden State’s taxes are stifling business investment and creating a drag on economic growth.

But an interesting trend emerges when one cross-references the Fortune 500 with the “Business Tax Climate” index: The “worst” states in the Tax Foundation’s index have a disproportionate share of America’s largest corporations, while the “best” states hardly have any.

In fact, not a single state that ranks in the top 10 of the Tax Foundation’s index has more Fortune 500 companies than New Jersey, which ranks dead last in the index. And the entire top 10 states, with just 28 Fortune 500 companies, barely have more of these big businesses than the Garden State alone.

The 10 “worst” Tax Foundation states – New Jersey, New York, California, Vermont, Minnesota, Ohio, Rhode Island, Connecticut, Maryland and Louisiana – have a total of 199 Fortune 500 companies. In other words, these represent 20 percent of all states but 40 percent of the Fortune 500.

Meanwhile, the Tax Foundation’s 10 “best” states – Wyoming, South Dakota, Alaska, Florida, Nevada, Montana, New Hampshire, Indiana, Utah and Oregon – have just 28 Fortune 500 companies, or 6 percent.

The bottom line: Despite the drumbeat of anti-tax groups and politicians, there is a long list of factors – like location, workforce, quality of life and more – that are far more important to most businesses than low taxes. And in a cruel and ironic twist, the more our elected leaders travel down the tax-cutting path, the less money there is to ensure the state is nurturing these far more important assets.

Tax Credits Are No Substitute for Medicaid Expansion

Posted on by Raymond Castro

The American Health Care Act (AHCA) passed by the House of Representatives last month would dramatically increase health insurance costs for low-income New Jerseyans who would lose coverage under the Medicaid expansion, according to a new report by the D.C.-based Center on Budget and Policy Priorities.

The new estimates of increased costs – which would be most pronounced for older low-income New Jerseyans – clearly show that the refundable tax credit included in the House bill is a terribly inadequate substitute for the Medicaid expansion, which assists over half a million New Jerseyans and would be effectively ended by the AHCA.

Here are the estimated insurance premiums – after tax credits – for different New Jerseyans at the federal poverty line (annual income of about $12,600 for a single adult).

A 60-year-old

  • Net premium under AHCA: $8,642
  • Net premium as share of income: 69%
  • Net ACA premium as share of income: 0%

A 45-year-old

  • Net premium under AHCA: $2,390
  • Net premium as share of income: 19%
  • Net ACA premium as share of income: 0%

A 30-year-old

  • Net premium under AHCA: $1,126
  • Net premium as share of income: 9%
  • Net ACA premium as share of income: 0%

The situation would be even worse for poorer New Jerseyans; for residents at 50 percent of the federal poverty line, net premiums under AHCA would represent 137 percent of annual income for a 60-year-old, 38 percent for a 45-year-old and 18 percent for a 30-year-old.

It’s worth noting that these estimates are conservative, as they project premiums before any state waiver of Affordable Care Act (ACA) protections for people with pre-existing conditions and ACA requirements for what health insurance plans must cover. The consequences for low-income adults with serious health needs in states that choose to waive these protections would be even more dire. The study also does not take into account the higher cost of living in New Jersey, which leaves the poor no disposable income left to pay for health care.

As the Senate considers changes to the House GOP health bill, some have claimed that phasing the repeal out more slowly or delaying it by two years would avoid these harms. But neither of these proposals change the ultimate outcome: a huge cost-shift to states ending the Medicaid expansion and causing millions to lose affordable coverage.

Support for State’s Poorest Kids Continues to Dwindle

Posted on by Raymond Castro

Last year, NJPP released a groundbreaking report that pinpointed the state’s stagnant cash assistance levels as a major cause of child poverty in New Jersey.

The report, and vigorous advocacy spearheaded by NJPP and key partners, led to swift legislative action: The legislature passed the first increase in TANF assistance since the late 1980s and – following the lead of many other states – repealed the punitive “family cap” policy. But the path to progress was blocked by Gov. Christie, who vetoed the modest boost in help for the state’s poorest families and children.

Fast forward to today: While it may be hard to believe, the situation has gotten even worse for New Jersey’s kids in just one year. Last year New Jersey had the 10th lowest TANF assistance level compared to other states – and this year it dropped to 7th lowest, falling behind states like Texas and Oklahoma, as we note in a new Fast Facts update.

New Jersey needs to invest in children like other states are doing – not ignore them like it has for the last 30 years.

NJPP Snags Two Spots on ‘Insider 100: Policymakers’ List

Posted on by NJPP Staff

Congrats go out to New Jersey Policy Perspective president Gordon MacInnes and policy analyst Brandon McKoy, who both landed on Insider NJ’s recently released “2017 Insider 100: Policymakers” list that features, in Insider’s language, “the names of those 100 Garden State Insider brains who will have to figure out how to piece together a blueprint to keep the place afloat.”

Gordon ranked #6 and Brandon ranked #37.

Trump Budget Targets Mixed-Status Immigrant Families

Posted on by Erika J Nava

Among the many vulnerable communities targeted by President Trump’s budget proposal are U.S. citizen children living with at least one undocumented parent. There are 128,000 New Jersey kids (and about 4 million nationwide) who would be punished for their parents’ immigration status under Trump’s plan – this is 6.5 percent of all kids in the state.

These children – and their parents – would be barred from accessing two vital working-family tax credits: the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) unless everyone in their family has a Social Security number. Most undocumented immigrants who pay taxes – to the tune of $587 million a year in state and local taxes here in New Jersey – use Individual Taxpayer Identification Numbers (ITIN).

Very few undocumented families receive the EITC, because it already requires that all family members have Social Security numbers. So the biggest pinch here will be on the CTC, which is currently open to parents with ITINs whose children have Social Security numbers.

This cruel action would ensure that these children miss out on the long-term benefits of these tax credits, just because somehow the administration sees them differently than other U.S. citizen children.

Most of these parents have been in the U.S. for years paying taxes and contributing to the economy, but are stuck in an outdated immigration system that prevents them from seeking legal status until their U.S. citizen child turns 21 and that child  sponsors them for legal status – which is not itself a guaranteed deal.

New Jersey’s members of Congress must put the future of the state’s children first. New Jersey has the 8th largest number of U.S.-citizen children of undocumented immigrants in the nation, and we cannot imperil our future because of discriminatory practices. Immigrants – both documented and undocumented – are an asset to our state and nation, and they should be treated with dignity and respect.

Trump Budget Would Cause Great Harm to New Jersey

Posted on by Jon Whiten

Updated May 24, 2017 with additional information on the size of the TANF cut to New Jersey, SNAP cuts’ impact on the New Jersey budget, and on how cuts to CHIP would harm the state.

The spending plan unveiled today by President Trump would cause great harm to New Jersey, damaging the state’s low-income and working-class families the most. Deep cuts to health care, food assistance, aid for the disabled and much much more are paired with massive tax cuts for the wealthiest Americans, which will cause the yawning gap between those doing very well and the rest of us to grow.

The proposal, which is also built on highly unrealistic growth projections, is an enormous cost shift from the federal government to states. As a result, the human cost will be most severe in states like New Jersey, where we already face chronic budget shortfalls and don’t have adequate resources to meet the needs of our residents.

Among the most damaging of the Trump cuts:

More than $600 billion in cuts to federal Medicaid funding over 10 years: These deep cuts to Medicaid come on top of the over $800 billion in Medicaid cuts included in the version of the American Health Care Act passed by the House. 1.6 million New Jerseyans rely on Medicaid for health coverage; federal funding for Medicaid in New Jersey stands at about $10 billion a year. Trump’s proposal fundamentally changes the entitlement structure of Medicaid by turning it into either a block grant or per-capita cap for states.

Nearly $200 billion in cuts to federal food assistance funding over 10 years: This equals an estimated $2.1 billion cut to the Supplemental Nutrition Assistance Program (SNAP) in New Jersey. In 2016, more than $1 billion in federal SNAP dollars kept around 800,000 struggling New Jersey individuals from going hungry. SNAP kept 155,000 people out of poverty in New Jersey, including 77,000 children, per year between 2009 and 2012, on average. Trump’s proposal dramatically shifts costs for SNAP to states by changing it from a program fully funded by the federal government to one where states must pony up an average of 25% of the costs. If that change were immediate, the cost to New Jersey’s state budget would be about $306 million a year.

$40 billion in purported savings that will be achieved by barring undocumented residents from receiving child care tax credits and the Earned Income Tax Credit: The IRS already requires a Social Security Number – not an Individual Taxpayer Identification Number (ITIN) – to receive the EITC, so what this change will be remains unclear. On the child care tax credit side, citizen children of undocumented parents with ITINs are eligible – and these are the families that would likely be hit the hardest. There are 128,000 such children in New Jersey.

$22 billion cut to TANF, which provides cash assistance for the poorest Americans: Federal funding for the program has not changed since the late 1990s, when cash assistance was turned into a block grant. Since then, due to inflation, the value of the funding has been cut in half. This is one of the reasons why about 90% of all children living in poverty in New Jersey receive no assistance from TANF. A further federal funding decrease would decimate this program – particularly in states like New Jersey, which hasn’t put up any state money to increase benefit levels for 30 years. NJPP estimates that Trump’s budget would cut New Jersey funding for TANF by 10 percent, or $39 million a year.

Changes to the Children’s Health Insurance Program (CHIP), which covers about 8 million Americans: NJPP estimates that 35,000 New Jersey children would be affected by the cut in the federal matching rate to 50 percent for kids above 250 percent of the federal poverty level. The state would have to replace those lost federal dollars or cut eligibility.

A complete elimination of the Low Income Home Energy Assistance Program (LIHEAP) program: LIHEAP helps approximately 800,000 low-income New Jerseyans — including many poor seniors — pay heating bills. Under the program, New Jersey received $116.3 million in the 2016 federal budget to help these families pay their bills.

A complete elimination of the Community Development Block Grant: This which supports housing, economic development and social service projects, mainly for low- and moderate-income New Jerseyans. In the 2016 federal budget, New Jersey received $81.3 million from the federal government under this grant.

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