In December 2019, New Jersey enacted legislation (A4743/S3229) to expand access to driver’s licenses to all residents, regardless of their immigration status. This new law enables more residents to earn a standard driver’s license, which has the potential to substantially improve public safety, strengthen New Jersey’s economy, and generate new revenue. However, the state’s Motor Vehicle Commission (MVC) — the agency tasked with implementing the expansion — recently proposed regulations that would limit the law’s impact by imposing unreasonable burdens on many driver’s license applicants, including immigrants, low-income individuals, unhoused individuals, individuals reentering society after incarceration, and survivors of violence.
The MVC’s proposed regulations ignore existing barriers faced by driver’s license applicants, such as difficulties in obtaining documents, fear of interacting with federal agencies, and the economic and health impacts of the current public health emergency. One such regulation is the requirement that applicants who do not have a Social Security Number (SSN) provide either proof of an Individual Taxpayer Identification Number (ITIN) or a letter from the Social Security Administration (SSA) that indicates SSN ineligibility. The process of applying for an ITIN, however, is itself burdensome and inaccessible for many immigrants, and recent changes to ITIN rules have made it even more challenging to hold an ITIN. For those immigrants who do not already hold an ITIN, it is unlikely that they will feel safe sharing their personal information with a federal administration that has a track record of hostility toward immigrants.
The barriers created by these regulations will be compounded by the current public health crisis, as applicants are more likely to encounter challenges and delays when they request documents. Moreover, the current pandemic makes expanding access to driver’s licenses more important than ever. Many of the families who would be left out of the driver’s license expansion under the MVC’s proposed regulations are the same ones who have been excluded from pandemic relief. Removing barriers to obtaining a driver’s license will make it safer and easier for families to maintain social distancing as they get to work and school, and by extension, support the state’s recovery from the current crisis.
To learn more about how the implementation of driver’s licenses expansion could better consider the realities of all New Jersey residents, or to find out how you can provide feedback on the MVC’s proposed regulations, please visit https://www.letsdrivenj.org.
New Jersey lawmakers have taken an interest in implementing a state-level financial transactions tax, which would levy a small fee on the billions of stock trades that are processed in the state every day. This could be a promising way to raise additional revenue from high-income earners and tamp down excessive stock market speculation. It could also be the answer to the state’s long standing fiscal woes, including billion-dollar debt service payments that crowd out other spending. But it is unlikely to become a reality in time to shore up New Jersey’s revenue shortfalls during the immediate fiscal crisis.
Based on a compelling proposal published in a June op-ed, a recently introduced bill (A4402) would apply a micro-tax on high-speed stock trading. Specifically, this bill would impose a $0.0025-per-transaction tax on persons or entities that process 10,000 or more financial transactions through electronic infrastructure located in the state. The tax, estimated to generate $13 billion in annual revenue, would apply to transactions involving financial securities such as futures contracts, derivatives, and stock shares. The largely conceptual bill was introduced by Assemblyman McKeon, chair of the Financial Institutions and Insurance Committee, and has grabbed the attention of both the Governor and the Senate President. New York has introduced similar legislation[1] and Vice-President Biden also has his eyes on a financial transaction tax at the federal level, as originally proposed by Senator Elizabeth Warren.
But how do these financial transactions work? Every day, trillions of dollars’ worth of financial securities are traded electronically at hyper speed through fiber-optic cables connected to banks of computer servers. Those servers don’t reside under Wall Street in Manhattan; they sit in metal cages inside nondescript, temperature-controlled facilities just across the river in New Jersey. The largest among them — a 338,000-square foot data center in Secaucus — provides storage space for servers owned or leased by thousands of companies including Nasdaq, the New York Stock Exchange (NYSE), Bloomberg LP, and the Chicago Board Options Exchange, plus telecommunication companies and brokerage firms. Densely packed data centers like this one make it possible to trade stocks on a smartphone, as all the intermediaries needed to complete such a complex transaction are housed in this data center. This particular mega data-center is so vital to the U.S. financial industry that it requires five security checkpoints to reach the servers themselves and contains multiple backup options in the event of a power outage.
While the revenue potential is impressive, further study of the state-level proposal is necessary. For instance: How would this tax be structured? Would it mimic the current fee on stocks and derivatives collected by the Securities and Exchange Commission (SEC) to fund the agency? Which entities would pay the tax: the data centers that provide the infrastructure for the servers, the exchanges or other financial firms that own or lease the servers, or the software companies that facilitate high-speed trading taking place on these servers? Besides potential legal issues that arise in taxing any interstate transaction, technical issues of how to appropriately tax the transactions also need to be thoroughly vetted. And designating taxable transactions of such vast swaths of financial activity could run into regulatory issues.
It may be worth exploring other ways to tax these data centers that do not involve the high-speed transactions themselves. Given the novelty of the proposal — no other state has implemented this tax since New York repealed theirs in 1981 — and the high probability of legal action against it, a tax on financial transactions is unlikely to generate revenue in FY 2021.
Of course, given the tremendous revenue potential and the likelihood that this tax would be paid by high-income people who own financial assets, NJPP supports efforts to craft comprehensive legislation to establish a financial transactions tax. We also recommend that state lawmakers allocate most, if not all, of the revenue toward paying off New Jersey’s outsized obligations. By dedicating funds to pension payments and debt service, large amounts of revenue would be freed up for investments in areas that benefit all New Jersey families, such as public education, health care, college, housing, and child care support, to name a few.
End Note
[1] New York A7791, introduced by Rep. Phil Steck (D), would repeal the state’s rebate of the stock transfer tax and use the revenue to maintain roads and bridges and fund various state programs. The tax, which was levied from 1905 to 1981 on the sale of securities, is 100 percent rebated to the industry under current law.
Welcome to NJPP’s Revised Budget Address FY 2021: Rapid Reaction, your source for commentary and data analysis on Governor Murphy’s address. The transcript below was taken from NJPP’s Zoom room and has been lightly edited.
Lou (Louis Di Paolo, Communications Director): Budget season gets a reset! For the second time this year, Governor Murphy delivered his budget address for Fiscal Year (FY) 2021 — this time to a socially distanced crowd at the Rutgers University football stadium. For context, New Jersey took the unprecedented step of delaying the budget deadline by three months to better assess the state’s finances after the COVID-19 outbreak. State lawmakers passed a three-month spending bill in June, which extended FY 2020, and this latest budget proposal would fund the state for the following nine months, starting October 1, for FY 2021.
Due to the economic fallout from COVID-19, New Jersey came into this fiscal year with an unprecedented multi-billion dollar revenue shortfall. In his proposal, Governor Murphy makes up for the drop in revenue with a combination of cuts, borrowing, and new revenue, including the millionaires’ tax and an extension of the corporate business tax surcharge.
Joining me in this budget reflection are policy analysts Sheila Reynertson, Brittany Holom, and Vineeta Kapahi. My first question: does this budget proposal meet the moment in responding to the COVID-19 health and economic crisis?
Sheila (Sheila Reynertson, Senior Policy Analyst): Given the extraordinary circumstances of this crisis in a state with outsized obligations, one would think that the Murphy administration’s hands were tied. But it turns out that their advantage was to embrace every option on the table. Faced with a $5.63 billion revenue shortfall, this budget turned a unique fiscal challenge into an opportunity to maintain and even grow some critical investments. With a targeted mix of new revenue, spending cuts, borrowing from the federal government, and even a healthy surplus, the budget proposal sets a solid foundation for a strong pandemic recovery.
Well, almost all.
It’s important to note, with disappointment, the absence of emergency assistance for our immigrant neighbors who have been left out of relief programs for more than 6 months. This proposal is also a missed opportunity to improve how New Jersey taxes inherited wealth.
Lou: My next question is for Vineeta and Brittany. Given that this is your first budget address with NJPP, what are your overall impressions of the governor’s budget address? What stood out to you?
Brittany (Brittany Holom, Senior Policy Analyst): Going into this, I was interested to see how the COVID-19 pandemic would shape the framing of the governor’s speech and the funding decisions in his budget proposal. I was worried that there would be a lot of short-term “patching” with the crisis, but I am glad to see instead that the lessons of the last recession are being recognized. It’s clear from this speech that the focus remains on the future of New Jersey rather than simple bandages hastily constructed during a tough time.
Vineeta (Vineeta Kapahi, Policy Analyst): Given the context of the current crisis, I was heartened to see that efforts have been made to keep many critical programs intact, like the Earned Income Tax Credit (EITC) and Child and Dependent Care Credit. In light of the unprecedented challenges that are disproportionately falling on low-income, Black, and immigrant communities, like Sheila, I was disappointed that the budget does not provide relief to people who have been left out of federal assistance (more on that later). The budget could also go further towards addressing the structural inequities that have allowed wealthy individuals and corporations to continue to gain disproportionate benefits, even during the pandemic.
Brittany: I was also surprised by the Bon Jovi soundtrack. Not that I minded it, I just doubt that’s the type of music that gets played when these types of speeches are given at the State House.
Lou: Brittany brings up a great point (well, two if you count her comment on Bon Jovi). It definitely seems like New Jersey learned its lesson from the Great Recession. Instead of cuts, cuts, and more cuts, Governor Murphy is proposing balancing the budget with roughly $1 billion in new revenue. This follows the recommendations laid out in an open letter signed by nearly 100 economists in New Jersey, which highlighted how targeted tax increases on wealthy families and big businesses would be better for the state’s economy than spending cuts.
So this question on revenue is for Sheila: How do you feel about the Governor’s revenue proposals? And as a follow-up, do they go far enough?
Sheila: The governor proposed a pretty solid list of new revenue streams, totaling $1.02 billion to help fund the recovery and create a more equitable tax code. It’s impressive that the state would be able to raise this much revenue without it affecting the vast majority of New Jersey families and small businesses. And most of these sources are sustainable, meaning they will be reliable funding streams for years to come.
That means that the wealthiest among us – millionaires and large corporations – need to pay their fair share in taxes, whether it be on income or in buying a yacht. #NJBudget
Lou: Definitely thrilled to see the millionaires’ tax in the governor’s proposal. Earlier this year, state lawmakers said they didn’t want to raise taxes on the top one percent of earners during a booming economy. Maybe this economic downturn — which has largely spared the wealthiest among us — will convince them that the tax code needs to change. We all know the state desperately needs the revenue. Any other tax changes worth highlighting?
Sheila: It’s also great to see a permanent extension of the corporate business tax surcharge on businesses that make over $1 million in profits a year. That will make a big difference for programs and services that may otherwise have been shut down, including programs that businesses themselves benefit from, like high-quality education and reliable roads and bridges.
The budget proposal also reverses sales tax breaks on limousine services and on yacht purchases, which will raise a combined $20 million. These tax breaks disproportionately benefit the wealthiest among us while robbing the state of critical revenue.
Lou: Wait, you’re telling me the yacht and limousine tax breaks benefit wealthy folks?
And there’s one new source of revenue that caught me by surprise: a five percent surcharge on certain federally qualified business income (QBI) for individuals with income greater than $1 million. But this isn’t a new tax — it’s a partial repeal of a very regressive tax policy that was included in the 2017 federal Tax Cuts and Jobs Act (TCJA). This will raise an estimated $75 million in FY 2021 and could raise much more in the future.
Brittany: Oh, and don’t forget the Health Insurance Assessment (HIA)! I know it was passed last month, but that’s more than $200 million to expand health coverage and keep insurance affordable.
Lou: Thank you for the breakdown, Sheila (and Brittany)! With this new revenue, New Jersey will be able to maintain investments in public services and programs that families across the state rely on. Along those lines, what investments are you all most excited about?
Vineeta: This budget maintains several programs that aim to provide stability for low-paid New Jersey residents. The governor committed to following through on the scheduled increase in the state EITC to 40 percent of the federal credit and to extending eligibility to certain young adults without qualifying children. I would have liked to see a boost in the credit amount for workers without qualifying children (the maximum credit is only $206 for this group!) and a commitment to addressing other barriers to the EITC, like including immigrant households that file taxes using an ITIN. The governor’s budget also maintains the Child and Dependent Care Tax Credit, which can help offset childcare costs. This program would be more impactful for those who need it the most if it were refundable; it would be great to see that happen next year.
Brittany: I’m excited to see the state’s commitment to affordable health care through support for critical Medicaid benefits and with state subsidies for our upcoming State Exchange. Making sure that more people can afford health care is key when many are losing access to employer-based health insurance. I am also happy with the continued commitment to addressing the stark racial inequities in our health care system with the public awareness campaign for Black infant mortality and increases in payments for certain providers and services that address inequities. I hope that, while there are unfortunate decreases in areas like the Charity Care program, these targeted investments will establish a foundation for a healthier future for all New Jerseyans.
Sheila: It is fantastic to see a full pension payment in the budget proposal. The recognition that New Jersey’s recovery is closely tied to child care availability and affordability for workers is another highlight that wouldn’t have even registered just a few years ago.
And finally, the most surprising proposal of the day, and one that puts New Jersey on the map as an incubator for new progressive policy, is baby bonds! Inspired by a federal bill by Senator Cory Booker, the proposal would provide a $1,000 deposit into a savings account for every child born in 2021 to families making up to $131,000 a year. Under Governor Murphy’s proposal, when the child reaches the age of 18 that appreciated bond becomes theirs to invest in higher education, a business, or a home.
Lou: Yes! The baby bond proposal was definitely a welcomed surprise. Was there anything else that surprised you in today’s address? Other than the tent interruption.
For the first time in New Jersey history, a flyaway tent has interrupted a governor’s budget speech.
Sheila: I know I have mentioned it already, but can I just state again how impressive it is to see this $2.2 billion surplus in this proposal. That’s 5.6 percent of the 9-month budget, compared to last year’s surplus at 4 percent of the 12-month budget. What that tells us (and credit rating agencies) is that the administration understands the limitations of borrowing from the federal government, as well as the importance of being able to handle revenue shortfalls should the state be hit by a second wave of the pandemic. This is smart budgeting and I am here for it. Brittany: I know I mentioned this earlier too, but I was surprised by the Bon Jovi exit music. While I appreciate the “It’s now or never” mentality, the framing of the address itself rang more “I’ll Be There for You.”
Lou: And what was missing?
Vineeta: At this critical time when thousands of New Jersey households are struggling to pay for basic needs like food and housing, the governor’s budget proposal fails to include relief for immigrants who have been excluded from federal pandemic assistance. Since the onset of COVID-19, immigrants have been calling on state lawmakers to provide support where the federal government has fallen short. Immigrants not only face the same challenges as other New Jerseyans, but they also have disproportionately high representation among essential workers responding to the current crisis and among industries that have experienced the most job loss due to COVID-19. I would have also liked to see an increase in funding for the Detention and Deportation Defense Initiative, which can only provide representation for a small fraction of low-income individuals facing detention and deportation at its current level.
Brittany: I second Vineeta’s point. With so many of our uninsured counting themselves amongst our immigrant, and particularly our undocumented, residents, the lack of a clear solution for getting our immigrant population access to care during this time left the picture of New Jersey’s future uncertain.
Sheila: It does bother me that in the middle of an uncontained pandemic that disproportionately hurts communities of color we still allow large concentrations of wealth and profits to grow unchecked. Wealthy heirs and multinational corporations receive massive tax breaks due to New Jersey’s weak taxation on inherited wealth and remaining loopholes exploited by multinational corporations to avoid state taxation.
** Brandon McKoy enters the chat **
Brandon (Brandon McKoy, President): Couldn’t agree more, Sheila. There’s a lot that the governor said today, appropriately, about the need to tackle racial inequality. He stated, “Ensuring fairness and justice in taxation is just as important as ensuring fairness and justice in society — in fact, it is an essential step in eliminating the structural racism in our society.” To realize that value fully, New Jersey needs to restore some of the wealth taxes that were eliminated under the Christie administration, especially the estate tax. The Center on Budget and Policy Priorities has produced incredible research that shows how fair wealth taxation is critical to closing the racial wealth gap. Until our state secures fair wealth taxation, we’ll continue to struggle in the fight to reduce racial disparities and structural discrimination against New Jerseyans of color.
Nonetheless, it’s nice to see a budget that generally promotes a positive vision of the future and pushes for maintaining — and even expanding — critical investments in programs, services, and assets that are central to growing our economy. It’s a welcomed change to how New Jersey responded to the Great Recession and I sincerely hope the legislature adds to this proposal to make it even stronger.
The COVID-19 pandemic has exposed the many weaknesses of a health care system that ties coverage tightly to employment. Two recent reports by Families USA underscore the catastrophic result: an estimated 124,000New Jerseyans lost access to their health insurancedue to loss of employment in the first months of 2020 and were not able to enroll in coverage under Medicaid, a spouse’s coverage, or the individual insurance market. This means that a total of approximately 701,000, or 13 percent, of all non-elderly adults in the state were uninsured as of May 2020.[i] Alarmingly, this loss of insurance could lead to additional job losses: as revenue for health care decreases, another 86,000 jobs could be lost in New Jersey’s health care industry alone.
These striking numbers, while historic, could have been much worse if not for state and federal policies that have expanded access to health care. If New Jersey had not expanded Medicaid, as allowed by the Affordable Care Act (ACA), many more individuals would currently be uninsured. By expanding eligibility to previously excluded individuals — including childless adults with income below 138 percent of the federal poverty level ($1,468 per month for a single adult in 2020) — the Garden State has a lower share of adults who are uninsured during the crisis than states that have not expanded Medicaid.[ii] The Families USA reports estimate that uninsurance rates for non-elderly adults in non-expansion states have reached levels as high as 29 percent (Texas), which could result in 362,000 additional job losses in the health care sector.[iii] With Census Bureau data showing that, nationwide, communities of color and low-wage workers have been most likely to lose insurance during the pandemic, Medicaid eligibility for these vulnerable populations has proven crucial to better addressing the fallout of the crisis.
During New Jersey’s pandemic lockdown, increases in NJ FamilyCare enrollment — New Jersey’s Medicaid and Children’s Health Insurance Program (CHIP) — show that the program serves as critical relief for many experiencing a loss of income. After an overall decline in enrollment in previous months, the COVID-19 pandemic led to a quick and significant surge in Medicaid enrollment numbers as disenrollment was frozen and hundreds of thousands of residents faced unemployment.[iv] From February to July 2020, total enrollment in NJ FamilyCare increased by 118,622 individuals, a jump of 7 percent. Enrollment in all non-Aged, Blind, and Disabled eligibility groups increased during the crisis as well. Most notably, enrollment for adult groups that became newly eligible under the Medicaid expansion rose significantly during the crisis, demonstrating that this safety net has successfully protected thousands of New Jerseyans that otherwise would have been uninsured after losing insurance through their employers.
How do we move forward?
Pandemics necessitate strong governmental responses. Leaders need to both support the health care system through crisis conditions and protect residents by slowing the spread of the outbreak. Viruses do not discriminate in whom they infect, but they do thrive on discriminatory structures within a country, feeding off of the disparities and shortcomings in our institutions and furthering the inequities present. Strengthening affordable health care options outside of employment, providing safe working conditions, improving access to basic needs like healthy foods, and increasing resources to deal with emergencies that low- and moderate-income families face should be prioritized.
By supporting the ACA, building more options for affordable coverage, avoiding cuts to critical services for vulnerable populations, and establishing guarantees of job retention in the midst of unsafe conditions, state lawmakers can demonstrate their commitment to a more equitable New Jersey. This is not the first crisis to challenge our existing social and economic systems, nor will it be the last. It is time for Garden State leaders to recognize the lessons of COVID-19 and to make sure that when another outbreak inevitably arrives, we are ready.
Appendix
ABD = Aged, Blind, and Disabled. M-CHIP = Children under an extended income eligibility group in Medicaid that is funded by CHIP funds. ABP = Alternative Benefit Plan. New Jersey’s adoption of Medicaid expansion introduced eligibility for all non-Medicare eligible individuals under age 65 (children, pregnant women, parents and adults without dependent children) with incomes up to 138 percent of federal poverty level (FPL) based on modified adjusted gross income.
End Notes
[i] It is important to note here that some of the individuals who were furloughed or who elected to move into COBRA coverage after losing employment may be delayed in their self-reported loss of coverage as they maintain benefits for a few to several months after employment. However, for low-income households, coverage under such programs as COBRA is often unaffordable.
[ii] While the ACA officially introduced eligibility for households below 133 percent of the federal poverty level (FPL), it was doing so for “modified adjusted gross income” (MAGI). In another part of the act, one modification introduced was a further five-point deduction from the FPL, effectively making the eligibility level 138 percent. More information on this distinction can be found here: https://www.shadac.org/news/aca-note-when-133-equals-138-fpl-calculations-affordable-care-act
[iii] This calculation does not cover the recent spikes in COVID-19 cases in many of the non-expansion states.
[iv] With the Families First Coronavirus Response Act, a Federal Medical Assistance Percentage (FMAP) bump was provided for states, given that they met particular requirements. One of these Maintenance of Effort (MOE) provisions required that Medicaid enrollees who might have otherwise lost eligibility due to “issues such as non-response to redetermination requests or changes in income” remain enrolled during the course of the crisis. Maintaining these enrollees while also taking in new enrollees accounts for a significant amount of the growth, as noted in the above linked New Jersey Department of Human Services monthly enrollment report. This helps to protect many who may have struggled to attend to redetermination requests or faced uncertain income levels during this time, in addition to those who have recently lost employment.
NJPP is currently researching the true cost of the War on Drugs in New Jersey. If the drug war has directly harmed you, your family, or your community, please consider sharing your story with us. For more information, please email Jenna Mellor at info@njpp.org with the subject line “Drug War Story.” You may also call or text Jenna at (609) 436-9936.
The murders of George Floyd, Tony McDade, Breonna Taylor, and Elijah McClain, who join a long and growing list of Black people murdered by law enforcement officers, have catalyzed a widespread examination not only of the actions of law enforcement but also the role that budgets play in funding racist, ineffective, and deadly practices that target our Black neighbors, colleagues, and loved ones.
The relative media silence around the death of McDade, a Black trans man, along with the murders of Black trans women (four in the month of June alone) like Dominique “Rem’mie” Fells in Philadelphia and 17-year-old Brayla Stone in Arkansas, make even more urgent the need for investments in public safety to actually keep the public safe, especially for those most vulnerable to violence.
For far too long, states across the nation, including New Jersey, have prioritized ongoing investment in a failed War on Drugs at the expense of investments in our communities, from public education to reliable mass transit to a robust social safety net. In 2016 alone, New Jersey invested more than $670 million ($715 million in 2020 dollars) in state and local expenditure for arrests, trials, and incarceration for drug-related crimes.
This is a problem of serious moral and public policy consequence, which Kassandra Frederique of the Drug Policy Alliance powerfully captures (read her full statement here):
George Floyd should be alive today. Instead, he drew his last breath after one police officer knelt on his neck for nine minutes and another taunted ‘don’t do drugs, kids’ to the gathered crowd. With George Floyd most recently, Breonna Taylor earlier this month, and countless others before them, perceived drug possession and drug use served as a justification by law enforcement to dehumanize, strip dignity from, and ultimately kill people of color.
In New Jersey, eight out of ten people arrested for a drug-related crime in the past decade were arrested for having a small amount of drugs. People of all races and ethnicities use illicit substances at similar rates. So, in the absence of racial inequities, we would expect all New Jerseyans who use drugs to be arrested at similar rates as well. Yet, New Jersey State Police arrest data from 2010 through 2019 shows that Black New Jerseyans were 2.6 times more likely than white New Jerseyans to be arrested for their personal substance use.
At the same time, fatal overdose rates among Black New Jerseyans have been increasing faster than those of white New Jerseyans in recent years. Between January and June 2020, New Jersey has lost 20 percent more of our residents to fatal overdose than in the same period last year. New Jersey Policy Perspective is currently seeking fatal overdose data by race and ethnicity for 2019 and 2020. While we do not know how overdose death rates are changing for Black and Latinx New Jerseyans in these years, what we do know is that the war on drugs is failing the people of our state.
It is time for New Jersey to join the global movement to support, not punish, people who use drugs. We have the opportunity and the moral imperative to reimagine what anti-racist public safety measures and a holistic, community-centered, and non-punitive response to drug use looks like in our communities.
What does this look like? This Juneteenth, a group of Black leaders in New Jersey called for an end to the racist war on drugs (watch the full video here), and gave us the following places to start:
Act urgently to lower New Jersey’s prison population, where incarcerated New Jerseyans are dying from COVID-19 at the highest rates in the nation
Demand expansion of community-based violence intervention programs that center community healers and leaders, like those led by the Newark Community Street Team
Follow, support, and join in coalition with Black-led organizations in New Jersey calling for an end to the War on Drugs. Please reach out to Salvation and Social Justice at info@sandsj.org to learn more.
Your Stories
As NJPP undertakes a new research endeavor to discover the true cost of New Jersey’s failed War on Drugs, contrasting our current dangerous and deadly dystopia with a policy framework of decriminalization and harm reduction, the organization is conducting interviews with people who have been harmed by the War on Drugs. By adding your story and perspective to our work, you can help give voice to the many aspects of the drug war that cannot be seen in the “numbers.” We know that there are people whose stories, lives, hopes, dreams, histories, and loved ones get hidden in these numbers. We would be honored to hear your story and add it to our work. All interviews can be confidential, and we value compensating people for the time you are contributing to this work.
To share your story, please email Jenna Mellor at info@njpp.org with the subject line “Drug War Story.” You may also call or text Jenna at (609) 436-9936.
Further Reading
The War on Drugs is a complex topic deeply rooted in the legacy of slavery and racial politics, and while we will be sharing resources in the coming months to help you better understand it, here are some of our favorite resources.
In Our Names, a national network of organizations, campaigns, and individuals working to end police violence against Black women, girls, trans and gender-nonconforming people.
Changing the Narrative, a language and content guide for media and policymakers that breaks down common misconceptions about substance use.
As New Jersey lawmakers cautiously reopen the state, unemployment insurance (UI) claims are back on the rise. To make matters worse, the federal relief provided in the Coronavirus Aid Response and Economic Security (CARES) Act, which provides an additional $600 in unemployment benefits for people who had lost their jobs because of the pandemic, expires this coming week on July 31, 2020.
Overall, the CARES Act contains many provisions that address the needs of laid-off workers, preventing families from experiencing severe financial harm. If this relief is not extended, it will be much harder for families to meet their basic needs, exacerbating poverty and worsening racial inequality. This won’t just hurt UI recipients and their families, it will hurt thousands more. The spending generated by that $600 is supporting over 1,000 jobs in New Jersey, meaning that these jobs will remain in the balance.
From mid-March through July 11, 2020 alone, New Jersey saw nearly 1.4 million UI claims and paid out approximately $10.7 million in benefits. In addition, nearly half a million more workers claimed Pandemic Unemployment Assistance (PUA), a federal rapid response program for workers who are not eligible for regular UI, like independent contractors and temporary workers. Towards the end of May through mid-June, jobless claims remained stable in the 20,000s; however, these claims have surpassed 30,000 and 40,000 in the past two weeks. This past week, the state received 37,000 new UI claims and 19,000 new PUA claims. The future prosperity of the nation — including New Jersey — relies on consistent federal relief to keep laid-off workers, their families, and the broader economy afloat until the COVID-19 pandemic is under control.
Juneteenth is a day for remembrance and reflection on the struggle for freedom that Black Americans have pursued for more than 400 years. While this anniversary marks the formal adoption of the end of slavery, it is vital for all of us to understand that the institution itself merely morphed and evolved into a more politically palatable form that lived on in Jim Crow laws and continues today through our nation’s system of incarceration.
Black Americans continue to be disproportionately harmed by a discriminatory enforcement of unjust laws, including the prohibitions exercised under the War on Drugs, and critical work remains to undo the damaging systems that uphold white supremacy and prevent far too many of our neighbors and loved ones from pursuing lives full of health, freedom, and joy.
While Juneteenth is an important milestone on the pathway towards liberty and justice for all, current protests against racism demonstrate how far we still have to go. Our reflection on this day should serve as a reminder that we all must redouble our efforts to truly secure the rights and freedoms afforded to every individual in our nation so that we ultimately secure the promise of America envisioned by our forebears.
At New Jersey Policy Perspective, the values of equity, justice, and prosperity for all lie at the heart of our work and mission. We sincerely appreciate the privilege of pursuing this work in collaboration with you and know, with absolute certainty, that our commitment to racial and economic equity in the Garden State will yield a better society where the barriers to health and happiness are fully dismantled for all.
NJPP Health Policy Director Ray Castro at the New Jersey State House unveiling a report on expanding health coverage to all children in the state.
Today is officially Ray Castro’s last day as Director of Health Policy at New Jersey Policy Perspective. Those are some tough words to write, because anyone who knows Ray knows that he means a great deal not just to NJPP but to the entire state of New Jersey and, to be completely honest, researchers and analysts across the nation.
Combining a wonderful resume of accomplishments working for state government along with his time here, Ray’s career is a blueprint of success for anyone in public-interest work. All of us in this sector would be lucky to exert the positive impact that he has, and his contributions have drastically improved the health and welfare of all New Jerseyans.
Ray’s work and expertise were on greatest display during the pitched battles to secure and protect the Affordable Care Act (ACA). He quickly and effectively produced a report showing how many people in each congressional district were at risk of losing their insurance coverage should the ACA be eliminated, and his research was picked up by advocates across the country to show specifically how their communities would be harmed by such a move. Many leaders have credited that report with helping to save health care coverage for millions of people, and it was all thanks to Ray.
No matter how challenging our work would get, Ray helped everyone keep it simple. He always focused on the fact that doing the right thing for people, no matter who they are or where they come from, is the most important thing—and he did so with a cheery attitude that is far too rare in this day and age. We can’t thank Ray enough for his sharp research and tireless advocacy over the past 14 years and will dearly miss his expertise, guidance, and partnership.
Congratulations on a retirement very well deserved and best wishes to you and your family!
To read a PDF version of this policy brief, click here.
The public health crisis created by the COVID-19 pandemic has caused an unprecedented demand in unemployment insurance (UI), a program that compensates eligible workers who have been recently laid off due to no fault of their own. Since the beginning of March 2020 through April 25, 2020, New Jersey saw over 930,000 UI claims.[1] This is about a 1,500 percent increase in claims, when comparing April to February.[2] While federal action will be integral to support vulnerable workers and those who are now unemployed, New Jersey must also act fast to ensure that no workers are left behind in the state’s recovery.
To better understand the magnitude of this record-breaking increase, NJPP compares UI claims seen in the current recession, which we refer to as “The Great Lockdown,”[3] to the past two recessions: the Great Recession, which lasted from December 2007 through June 2009, and the Early 2000s Recession that ran from March 2001 through November 2001.[4]
Unemployment claims made in the first weeks of the COVID-19 pandemic drastically surpass any week of the previous recessions. In fact, the total number of claims made in the current recession is over three quarters of claims seen during the entirety of the Great Recession and almost twice the amount seen during the entire early 2000s recession.[5] We expect that the total claims made by the end of May will surpass all the jobless claims made during the Great Recession.
Another way to understand the magnitude of job loss resulting from COVID-19 is to determine how much of the labor force has filed jobless claims. As seen below, so far, a record-breaking 7.4 percent of the labor force has applied for job loss claims in March, and this is expected to rise in April, when new labor force data is available.
The overwhelming number of UI claims has placed an enormous strain on the state’s Department of Labor and Workforce Development, the agency tasked with administering these benefits. New Jersey’s UI system is collapsing under the weight of so many applications, due in part to dated technology and a department staff that is 25 percent lower than it was over a decade ago.[6] Job loss also strains other agencies, such as the Departments of Health, Human Services, and Community Affairs, as many workers have also lost their employer-provided health insurance and need additional assistance to pay for essentials like food and rent.
To meet this increased demand for safety net programs, relief packages from the federal government — such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act — are critical. The CARES Act made necessary expansions to state UI programs to help relieve some of the economic decline caused by the COVID-19 pandemic.[7] It includes Pandemic Unemployment Assistance, which expands benefit eligibility for those not eligible for their state UI program, such as self-employed workers, independent contractors, and part-time workers. It also contains Pandemic Unemployment Compensation, which increases the maximum unemployment benefit above one’s base unemployment compensation benefit through July 2020 by $600 per week. Finally, it includes Pandemic Emergency Unemployment Compensation, which extends unemployment benefits for an additional 13 weeks.
The CARES Act relief package will not be enough, however. New Jersey cannot meet all these immediate and approaching needs on its own, especially since the state does not have a sufficient Rainy Day Fund or any major progressive tax strategies to raise sufficient revenue. In fact, the state may likely borrow federal funds to cover unemployment claims, in addition to cover revenue shortfalls.[8] From the beginning of March through April 25, the state has distributed about $1.4 billion in unemployment related claims.[9]
These record-breaking UI numbers also severely undercount the extent of job loss in New Jersey, as not all workers are eligible for unemployment assistance and are thus not filing claims. For instance, undocumented workers, who make up over 15 percent of the workforce in industries most affected by COVID-19, are excluded from much of the relief provided by the federal government. What’s more, other immigrant workers must have valid work authorizations during the base period,[10] at the time they apply for benefits, and throughout the period that they are receiving benefits,[11] making it more difficult to qualify. If New Jersey fails to step in and prioritize these workers throughout its recovery, the economic fallout will be much worse. (For more see, NJPP’s Undocumented Workers in Service Sector Most Likely to be Harmed by COVID-19.
Job loss claims are just one indicator to understanding the extent of this health pandemic and the repercussions that will be felt throughout the economy. Currently, they understate the impact of the virus. These claims are expected to rise beyond what most of us have seen in our lifetimes. To respond to this unprecedented surge in job loss, it is imperative that the state step in and ensure that no worker or family is left behind.
[5] Total UI claims for Early 2000s Recession is about 399700 and for the Great Recession is about 1,088,000. U.S. Department of Labor, Unemployment Insurance Weekly Claims Data for New Jersey. Accessed 4/24/2020 https://oui.doleta.gov/unemploy/claims.asp
To read a PDF version of this policy brief, click here.
Since the onset of the COVID-19 pandemic, New Jersey workers and businesses alike have faced mounting and unprecedented challenges. Public health precautions meant to contain the spread of the outbreak, like necessary business closures and stay-at-home orders, have disrupted the state’s economy, especially the service sector that relies on server-customer interactions. Immigrant workers, who make up a disproportionate segment of the service sector workforce, will likely be hit hardest by the COVID-19 pandemic. These same workers are excluded from much of the relief provided by the federal government.
The industries most hurt by the necessary social distancing and public health directives include restaurants, bars, hotels, entertainment, non-food retail, passenger transportation, and personal care services. Taken together, these industries accounted for nearly 800,000 jobs in 2018, representing almost a quarter of New Jersey’s private-sector employment at 22.9 percent. These industries also accounted for $25.9 billion in annual payroll, or 11.4% of total private sector income.
The majority of these jobs are low-paid, with annual earnings significantly lower than the state average. Due to decades of racial and ethnic discrimination, these industries are a key source of employment for low-income workers, immigrants, and communities of color. Undocumented immigrants, who make up approximately 6 percent of New Jersey’s population, account for a disproportionate 15.7 percent of the workforce in these service sector industries.[1] In total, there are approximately 125,000 undocumented workers employed in the service sector industries that are most likely to be harmed by the pandemic.
“[The] de-unionization and erosion of labor markets preceded the arrival of immigrants. The shift to non-union subcontracting is what led native workers to leave those jobs. The industries then shifted to immigrant labor, but labor standards in the industries had dramatically diminished. This deterioration of labor markets and working conditions, however, cannot be understood as an inevitable product of market forces. Much of the change has been shaped by a combination of firm management practices, outdated employment laws, and the lack of effective labor standards enforcement.”
As the COVID-19 pandemic and resulting economic downturn rage on, it will be critical for New Jersey policymakers to implement policies that improve working conditions across all sectors, especially the industries that contain a larger share of the low-paid workforce. Past recessions have worsened inequality as governments responded with austerity policies that cut taxes for wealthy families and corporations and failed to support low- and middle-income families with vital relief. This approach has led to major negative impacts on the health and general well-being of low-income and middle-class families, especially for immigrants. If the state’s policy response doesn’t prioritize these families throughout its recovery, they are sure to fall even further behind.
