Tax and Budget Archives - New Jersey Policy Perspective

Sleepwalking into Catastrophe

Posted on July 8, 2025 by Alex Ambrose

Throughout the budget process — from Governor Murphy's proposal to the public hearings to the revenue projections — one major threat loomed over state lawmakers: the federal reconciliation bill’s cuts to Medicaid, food assistance, and other critical programs. Given their public statements opposing these cuts, the state budget should have been an opportunity to build defenses against these cuts, begin raising revenues from wealthy individuals and corporations, and avoid short-term giveaways.

Instead, the budget process went on autopilot. Leaders cut back revenue increases and dipped deeper into the state's cash reserves, as though there would be no federal cuts at all. As has happened in prior years, new expansions in corporate tax credits sailed through committee hearings while the expensive Stay NJ senior homeowner subsidy was preserved without even modest changes to reduce its overall cost to the state. The budget also continued the unfortunate tradition of using dedicated funds to patch one-year budget gaps, including an expanded raid of the Clean Energy Fund to fund both New Jersey Transit’s general operating expenses and the General Fund.

This budget could and should have been a moment of courage — a governor’s final budget, a legislature that has stated its desire to protect the state’s residents from devastating cuts. But instead, the state’s leaders delayed any preparation for federal cuts until after they had already become law. The difficult decisions will not be easier later.

Below is a short summary of NJPP’s budget priorities and their final status in the Appropriations Act.

NJPP FY26 Budget Priority

Was it included in the Governor’s Budget?

Protect the surplus and close the deficit	Partially Included. The projected annual budget shortfall has been reduced from $2.1 billion in the FY 2025 budget bill to $1.5 billion through some tax increases and budget cuts. The budget bill retains cash reserves of nearly $6.8 billion, but still cuts deeper into the reserves to pay basic expenses.
Fully fund pensions and schools	Yes. The governor and legislature continued the state’s commitment to fully funding pensions and the K-12 school funding formula.
Raise revenues to balance the budget	Partially Included. The final state budget does include increases in revenue, including the increase in fees on property sales over $2 million and increased taxes on online gambling. However, these increases raise less money than the governor’s original proposals, leading to the budget drawing more heavily on cash reserves.
Maintain StayNJ’s guardrails, specifically the original spending rules that require a healthy budget surplus	No. StayNJ, an expensive subsidy program that disproportionately benefits wealthy senior homeowners, requires a 12 percent surplus target before payments can go out. This budget continues to fund StayNJ and assumes payments will go out in 2026, even though the surplus is now well below 12 percent.
Maintain funding for services for immigrants	Yes. Thankfully, the proposal preserves funding levels for programs such as Cover All Kids, which provides health insurance for children regardless of immigration status, and legal services for immigrant adults and children. The budget also doubles funding for the Office of New Americans, which connects immigrants to services for which they or their families may be eligible.
Expand and improve tax credits for working families	No. Unfortunately, the final budget included no expansion of the Child Tax Credit or Earned Income Tax Credit to help working families afford the increasing cost of living in the state.
Increase benefits in WorkFirst NJ to reduce poverty	No. Similarly, there was no expansion of the benefit amount for WorkFirst NJ, which provides cash assistance to low-income households.
Expand affordable health insurance options	Partially Included. As noted above, the budget continued to fund Cover All Kids, dedicating $165 million to the program to keep pace with enrollment. However, there were no other proposals to expand access or eligibility to state-funded health insurance programs.
Keep the Corporate Transit Fee funding transit	Yes. Corporate Transit Fee funds were directed only to New Jersey Transit and not to the general fund or footing the bill for other programs.
Use the Clean Energy Fund only for clean energy projects	No. In fact, lawmakers expanded the raids on the Clean Energy Fund to over $190m to be used for basic New Jersey Transit operations and to the General Fund.
End predatory prison communication fees	No. The budget did not include any funding to reduce or eliminate the cost of prison communication fees, leaving families to bear the $15 million burden of communicating with their incarcerated loved ones.

All citations to the Appropriations Act (A-5800/S-2026) and Scoresheet unless otherwise indicated.

To learn more about policy solutions that NJPP recommends to build a more equitable state, read Blueprint for a Strong and Resilient New Jersey.

“Beautiful” Bill Devastates NJ Families While Delivering Massive Tax Breaks to the Wealthy

Posted on July 3, 2025 by Nicole Rodriguez

Today, the U.S. House of Representatives passed the final version of President Trump’s “One Big Beautiful Bill” following U.S. Senate approval on June 30. The legislation extends the 2017 tax cuts while adding new ones. It also cuts nearly $1 trillion from Medicaid, with more reductions to food assistance for the poor and other government aid.

In response to the bill, NJPP released the following statement.

“This harmful and irresponsible bill threatens New Jersey families by cutting funding for essential programs like health care, food assistance, and housing — programs that hundreds of thousands of residents rely on to stay healthy, fed, and housed.

“The health care cuts alone with devastate New Jersey families. Hundreds of thousands of New Jerseyans will either lose their health insurance or face much higher coverage costs. Around 227,000 New Jerseyans will be kicked off Medicaid as they face overwhelming red tape in getting and keeping their coverage. Another 454,000 residents will pay higher premiums through GetCovered NJ. These cuts will hurt working families, older adults, and people with disabilities the most.

“Food programs will also take a major hit. Over 800,000 residents receive food assistance through SNAP, and about 712,000 children rely on the national school lunch program. Reducing this support will increase food insecurity, worsen health outcomes, and put more pressure on schools, food banks, and community organizations.

“Housing costs are already crushing Garden State families. With 51 percent of New Jersey renters spending over 30 percent of their income on rent — already a heavy burden — cutting federal housing assistance will push more people into a housing crisis, especially in a high-cost state like ours.

“This is not just about doing what’s right — it’s about real consequences. Every dollar cut by Congress creates a deeper hole in New Jersey’s already woefully weak safety net and a bigger bill for the state to cover. The timing couldn’t be worse: New Jersey lawmakers just finalized the Fiscal Year 2026 budget and did not plan for these huge federal cuts.

“Meanwhile, the bill delivers massive tax breaks to the wealthy. The top 5 percent of earners in New Jersey — those making more than $471,200 a year — will receive 33 percent of all tax cuts, totaling more than $5.1 billion. But the bottom 20 percent of earners will receive just 1 percent, or about $167 million. This is a deeply unfair approach that benefits the rich while shifting risks and costs onto everyone else.

“New Jersey can’t afford to follow Washington’s lead. Lawmakers must protect vital services — and raise revenue fairly to protect the people hit hardest.”

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Coalition Slams Trump’s “Beautiful” Attack on Working Families

Posted on July 3, 2025 by NJPP Staff

“There’s nothing beautiful about ripping health care away from millions while handing billionaires a massive tax break.

“Trump’s so-called One Big Beautiful Bill is a direct attack on working families, seniors, immigrants, and communities of color. It’s nothing but a massive giveaway to the ultra-rich, and New Jersey deserves better.

“This bill kills. It bankrupts. It robs our future to enrich the few.

“While billionaires get nearly $300,000 in tax cuts, working families get $160. While the wealthy celebrate, 16 million Americans lose health coverage. While the President’s friends cash in, children lose school meals and families lose their doctors.

“This isn’t reform — it’s robbery.

“Three New Jersey Representatives abandoned the Jersey values that say we look out for each other. Instead Reps Tom Kean Jr, Chris Smith, and Jeff Van Drew catered to wealthy donors and directives from the White House over the needs of their constituents.”

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For The Many NJ is a statewide coalition of more than 40 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

2026 Budget Leaves NJ Exposed to Billions in Federal Cuts

Posted on July 1, 2025June 30, 2025 by Nicole Rodriguez

Governor Murphy signed the Fiscal Year 2026 Appropriations Act today, approving funding levels for the next twelve months, but the state still faces a financial cliff. The approved budget includes modest revenue increases, though not enough to cover the full cost of the state’s spending. This leaves the state with a nearly $1.5 billion gap that must be filled from its cash reserves, which have dwindled to $6.7 billion. Cash reserves that once provided a safety net now cover barely one month of operations.

Making matters worse, the state faces additional funding threats from federal actions. With New Jersey receiving nearly $30.8 billion in federal funds in fiscal year 2024, Congress’s expected vote on massive cuts to Medicaid and food assistance programs could devastate both the state’s finances and the hundreds of thousands of residents who depend on these services.

In response, NJPP issues the following statement.

Nicole Rodriguez, President, NJPP:

“Over the past seven years, Governor Murphy has taken great steps to put the state back on strong financial footing. He achieved full funding of the school funding formula and the state’s pension payments, restored the state’s credit ratings, and refilled the state’s cash reserves to protect against unexpected economic downturns. But this legacy is now at risk, with potentially catastrophic federal cuts to Medicaid and food assistance being approved by Congress and a state budget that still does not raise enough revenue to cover its expenses.

“The Governor and the legislature have worked to ensure that the budget reflects new revenue sources focused on the wealthy and powerful. With the addition of critical revenue sources such as the millionaire’s tax on households with income over $1 million, the corporate transit fee on big businesses, and now an expanded realty transfer fee on property sales over $2 million — each an NJPP priority — the state’s leaders have raised revenues to help fund the critical programs that make New Jersey a great place to raise a family or start a business.

“Unfortunately, more needs to be done to protect the state from the economic challenges ahead. With New Jersey receiving nearly $30.8 billion in the last fiscal year, cuts from Washington will create a devastating double impact — harming the state’s finances while directly hurting New Jersey residents by kicking them off health insurance or denying them access to food. New Jersey can and should show the way forward for the country by ensuring that its residents are protected from these harmful federal actions. But to do so, the state will need more revenue and bold action to ensure that the state’s dollars go to help those who need it most. Simply transferring money from other accounts for one-year fixes does not provide the base for long-term investments that the state needs.

“This budget’s legacy depends on what happens in Washington. It represents a missed opportunity for the state to take bold, decisive action to protect its residents by raising revenue ahead of time to limit the damage of federal cuts. New Jersey’s leaders must act quickly to protect residents from the financial storm ahead.”

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Budget Decision Blocks Justice for Communities Hit Hardest by Drug War

Posted on June 30, 2025 by Marleina Ubel

Communities still waiting for justice from cannabis legalization suffered another setback today as the state Senate and Assembly passed an appropriations bill that increases the state’s structural deficit while rejecting the Governor’s proposal to raise the Social Equity Excise Fee (SEEF). This initiative would have raised much-needed revenue for the communities who need it most.

In response, NJPP releases the following statement:

Marleina Ubel, Senior Policy Analyst, NJPP:
“It is deeply disappointing that the Fiscal Year 2026 budget does not include the Governor’s proposal to increase the Social Equity Excise Fee (SEEF) to 15 percent. This omission represents a missed opportunity to make meaningful investments in the very communities that were most harmed by the War on Drugs.

“The SEEF was created with a clear purpose: to provide direct support and help rebuild communities that have suffered under unfair and discriminatory drug policies. By failing to raise the fee, we are choosing not to fully achieve that vision. The proposed increase would have strengthened New Jersey’s commitment to equity and justice, allowing more funding to flow into programs and services that can truly make a difference.

“This is not just a matter of money — it is about making things right. We urge lawmakers to revisit this issue and move forward with a fee increase that honors the SEEF’s mission and maximizes its impact.”

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Rush to Expand Film Tax Credits Leaves Average New Jerseyans Behind

Posted on June 30, 2025 by Peter Chen

Today the state legislature voted to approve a bill (A5827/S4618) that would continue expanding the New Jersey film and digital media tax credit. This program provides subsidies directly to film studios to make movies and television programs in New Jersey, covering up to nearly half their costs. The bill would increase credit amounts for certain projects and loosen accountability requirements. In fiscal year 2026, even without these changes, this program is estimated to cost the state nearly $250 million.

In response, NJPP issues the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“Passing yet another expansion of the film tax credit program to subsidize Hollywood studios, at a time when low- and middle-income families are struggling with day-to-day costs, locks the state even further into an ever-more-expensive waste of money with no end in sight. With added bonuses, the state government will be subsidizing some productions at nearly half of their total expenses, all while the bill limits the state’s ability to get those credits back if the productions fail to deliver on their promises of economic growth.

“With the state running a structural deficit, lawmakers need to think about how to increase revenue to protect New Jerseyans from future cuts and recessions, not dream up new ways to give big corporations hundreds of millions of dollars to boost their private profits. Families in New Jersey need financial help today, not celebrity cameos.”

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Despite Modest Revenue Increases, NJ State Budget Leaves Residents Exposed to Federal Cuts

Posted on June 27, 2025 by Nicole Rodriguez

On June 27, 2025, the state Senate and Assembly budget committees passed another late-night funding bill that increases the state’s structural deficit to about $1.5 billion and reduces cash reserves to nearly $6.8 billion, well below recommended levels to maintain the state’s fiscal health. The bill reduces some of Governor Murphy’s proposed revenue increases, while eliminating other proposals entirely.

In response to the bill, New Jersey Policy Perspective (NJPP) released the following statement.

Nicole Rodriguez, President, NJPP:

“Lawmakers continued to ignore federal revenue cuts coming for Medicaid and food assistance and failed to protect the much-needed cash reserves to help the state protect its residents. While other states build up their savings to help smooth the potentially devastating cuts, the state’s political leadership chose instead to conduct business as usual in Trenton, putting off difficult decisions until later in the year when options will be limited and revenue will be harder to raise.

“Although the budget contains important revenue increases, such as the reformed realty transfer fee, the compromise versions raise less than the governor’s original proposals, without additional revenue to make up for it. Despite countless warnings from state officials, advocacy groups across all issues, and individuals who need programs like Medicaid to survive, this appropriations bill leaves the state poorly prepared to protect its residents from the crisis to come.”

Raising Revenue from Expensive Property Sales Will Help Make Housing More Affordable for All

Posted on June 27, 2025June 27, 2025 by Peter Chen

On June 26, 2025, the Senate and Assembly budget committees approved an expansion of the realty transfer fee on property transactions over $2 million in value (A5804/S4666). Currently, property sales that are $1 million or more are charged a fee of one percent of the total sale price. This bill would increase that amount to 2% for sales over $2 million, with the percentage increasing with each $500,000 in sale price, up to 3.5% for sales over $3.5 million.

This proposal aligns with an NJPP report in fall 2024 calling for an increase in the realty transfer fee on high-priced property sales.

In response, New Jersey Policy Perspective issues the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“At a time when so many households are struggling to afford the cost of living in New Jersey, this modest increase in the realty transfer fee will provide critical revenue for the state’s budget, while only affecting the top three percent of property sales statewide. These much-needed revenues should go towards making the state more affordable for low- and moderate-income households and supporting affordable housing options for New Jerseyans. Expanding the fee on high-priced property sales ensures that the state’s wealthiest residents and large corporate landholders, rather than low- and middle-income households, contribute their fair share.”

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Course Correction: Preserving Senior Housing Affordability While Cutting Costs

Posted on June 17, 2025June 17, 2025 by Peter Chen

Every New Jerseyan deserves to age with dignity, stability, and the ability to remain in their community — no matter their income or housing status. The state has a responsibility to ensure that people aged 65 and over on fixed incomes aren’t pushed out of their homes simply because they can’t afford their housing costs. At the same time, New Jersey must steward its public dollars wisely, prioritizing investments that advance equity and support those most in need.

Unfortunately, the much-discussed Stay NJ proposal to subsidize senior homeowners disproportionately benefits wealthy homeowners, fails to assist senior renters, and costs the state more than a billion dollars annually, with no new revenue source.^[1]

This report offers a course correction for policymakers to preserve the intent of Stay NJ to keep senior residents in their homes by focusing resources on those who need help the most and improving the sustainability of the program. The report models the following proposed changes to the program:

Lower income limits and maximum benefit amounts to focus the program on low- and moderate-income senior households.
Double the existing senior renter tax credit for seniors from $700 to $1,400.

By refocusing the program on those most likely to experience housing insecurity and adjusting benefit levels for wealthier households, New Jersey can deliver targeted relief without exceeding its budget capacity. The state can also correct for the exclusion of senior renters from Stay NJ, who are much more likely to suffer from housing insecurity and high housing cost burdens than homeowners.^[2]

Untangling NJ’s Property Tax Credits

New Jersey has multiple, often-overlapping, property tax benefit programs, but this report focuses on two:

Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) provides homeowners and renters with set property tax credits, ranging from $450 to $1,500, depending on age and an income cap of $150,000.
Stay NJ is a new program that will provide homeowners aged 65 and above with a property tax credit worth 50 percent of their property tax bill up to $6,500, with an income cap of $500,000. Stay NJ is scheduled to begin paying out benefits in February 2026.^[3]

For more information on these programs, see the New Jersey Division of Taxation website: https://www.nj.gov/treasury/taxation/relief.shtml.

Congress seems poised to provide significant tax breaks to the wealthiest in the country, which could substantially decrease revenue in New Jersey.^[4] Meanwhile, many of the proposed federal budget cuts will harm our low-income neighbors in the state. For New Jersey to be a place where everyone can thrive, policymakers must make budget decisions that support households most in need and reduce spending on the already-wealthy, many of whom will likely benefit from the federal tax cuts.

Accordingly, New Jersey Policy Perspective recommends two targeted reforms to better align Stay NJ with the state’s fiscal and equity goals.

Proposal 1: Lower income limits and maximum benefit amounts, focusing on low- and moderate-income senior households

Two modest adjustments to the program’s design would substantially reduce its cost while ensuring that benefits reach low- and middle-income households:

Reduce the maximum eligible income to $150,000 from $500,000, consistent with the ANCHOR property tax relief program.^[5] This prevents the government from subsidizing the top 20 percent of household incomes with hundreds of millions of dollars.
Lower the maximum benefit from $6,500 to $5,000.^[6] This puts the benefit more in line with the state’s average property tax bill and prevents the state from subsidizing higher-value homes, which tend to have higher property tax bills.

These two changes would cut the cost of Stay NJ by $520 million, nearly half its
projected cost.^[7]

Importantly, by focusing on reducing the subsidy for wealthier homeowners, this proposal achieves 70 percent of its cost savings by reducing state subsidies going to residents in the top 20 percent of incomes.

These reforms would preserve most of the benefits for moderate-income households while phasing out subsidies for higher-income homeowners. However, because benefits are based on a percentage of property tax amounts, which correlate with home values, benefits would still skew toward those with higher property wealth.^[8]

These examples illustrate how this proposal would affect different households.

Under the proposal, Henrietta, a low-income senior with modest property taxes, would see no change in her final tax bill. Isaiah and Jonas, with a higher income and above-average property taxes, would receive a reduced but still substantial benefit. Meanwhile, Kevin and Liza, who have a high income and substantial property wealth, would no longer qualify for a Stay NJ benefit.

Proposal 2: Double the ANCHOR renter benefit for seniors from $700 to $1,400

The current Stay NJ program only benefits people aged 65 and over who own their homes. This restriction of benefits to homeowners is not necessary. Other state property tax benefit programs do provide senior renters benefits: for example, renters aged 65 and older can receive enhanced ANCHOR benefits of $700, a modest increase from the $450 benefit available to renters under age 65.

Senior renters face serious housing insecurity challenges, putting them at higher risk of housing insecurity than senior homeowners. More than 1 in 4 seniors in New Jersey rent but would receive no new benefit from Stay NJ, including over half of Hispanic/Latinx and Black seniors.^[10] Nationally, the poverty rate is twice as high for senior renters as for senior homeowners.^[11] Renters also have significantly less wealth than their home-owning peers,^[12] and nearly 1 in 4 senior renters in New Jersey report it is “very likely” they will lose their home to eviction.^[13] However, because StayNJ excludes renters, who represent a substantial percentage of New Jersey’s senior population facing housing insecurity, the proposal fails to support the very people most at risk of losing their homes.

Despite this financial pressure and housing insecurity, Stay NJ limits renters to the $700 ANCHOR benefit, compared to the $6,500 maximum benefit available to homeowners.

At a cost of roughly one-tenth of the entire program ($149 million), doubling the ANCHOR benefit would provide targeted support to low- and moderate-income renters, with nearly 70 percent of the benefits going to households with an annual income of less than $62,000.

Conclusion: A Responsible Path Forward

With the state still facing a $1 billion structural deficit and a shrinking surplus,^[14] state policymakers should exercise prudence regarding new spending programs. As New Jersey contends with the possibility of a recession and cuts in federal funding, it must ensure that state funding is directed toward residents who need it most — not to already-wealthy households.

These recommendations offer policymakers a way to refine Stay NJ without abandoning its core intent. While they don’t fix the program’s underlying design flaws, they make it more equitable and fiscally responsible by reducing costs and targeting relief to the seniors most at risk of losing their homes — especially renters, who currently receive the least support. In a challenging fiscal environment, this is a practical and balanced way to preserve the program’s goals.

End Notes

^[1] Testimony of Peter Chen, Senior Policy Analyst, New Jersey Policy Perspective, Before Stay NJ Task Force, March 13, 2024, https://www.njpp.org/wp-content/uploads/2024/05/NJPP-StayNJ-Committee-Testimony-03-13-24.pdf

^[2] Joint Center for Housing Studies of Harvard University, Housing America’s Older Adults 2023 (2023), p. 16, https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Housing_Americas_Older_Adults_2023_Revised_040424.pdf

^[3] N.J. Stat. Sec. 54:4-8.75e5.a.(1) (2025).

^[4] Lilo H. Stainton, What GOP’s Medicaid Cuts Could Cost NJ, New Jersey Spotlight News, May 20, 2025, https://www.njspotlightnews.org/2025/05/nj-calculates-massive-cost-of-republican-led-medicaid-cuts/

^[5] N.J. Stat. Sec. 54:4-8.75b2. For the ANCHOR eligibility threshold, see N.J. Stat. Sec. 54:4-8.61a.

^[6] N.J. Stat. Sec. 54:4-8.75c.

^[7] NJPP analysis of tax modeling from Institute on Taxation and Economic Policy, 2025.

^[8] Testimony of Peter Chen, Senior Policy Analyst, New Jersey Policy Perspective, Before Stay NJ Task Force, March 13, 2024, https://www.njpp.org/wp-content/uploads/2024/05/NJPP-StayNJ-Committee-Testimony-03-13-24.pdf

^[9] New Jersey Department of Community Affairs, 2024 Property Tax Information: Municipal Tax Summary (2025) https://www.nj.gov/dca/dlgs/resources/Property_Tax/24_data/24taxes.xls.

^[10] U.S. Census Bureau, U.S. Department of Commerce. “Tenure by Age of Householder.” American Community Survey, ACS 1-Year Estimates Detailed Tables, Table B25007, 2023, https://data.census.gov/table/ACSDT1Y2023.B25007?q=age+tenure&g=040XX00US34. Accessed on May 15, 2025.

^[11] Diane Elliott, More Than Shelter: How Housing Affordability Is Linked to Older Americans’ Health, Population Reference Bureau, April 9, 2024, https://www.prb.org/articles/more-than-shelter-how-housing-affordability-is-linked-to-older-americans-health/

^[12] Jung Hyun Choi, Amalie Zinn, The Wealth Gap Between Homeowners and Renters Has Reached a Historic High, Urban Institute, April 29, 2024, https://www.urban.org/urban-wire/wealth-gap-between-homeowners-and-renters-has-reached-historic-high

^[13] U.S. Census Bureau, Household Pulse Survey, Cycle 09, Housing Table 3b. Likelihood of Having to Leave this House in Next Two Months Due to Eviction, by Select Characteristics: New Jersey, Oct. 3, 2024, https://www2.census.gov/programs-surveys/demo/tables/hhp/2024/cycle09/housing3b_cycle09.xlsx.

^[14] Nikita Biryukov, Budget experts tell lawmakers revenue projections are up, but there’s no windfall, New Jersey Monitor, May 14, 2025, https://newjerseymonitor.com/2025/05/14/budget-experts-tell-lawmakers-revenue-projections-are-up-but-theres-no-windfall/

Economic Development Tax Credits Should Provide Positive Net-Benefits to New Jersey’s Communities

Posted on June 16, 2025June 26, 2025 by Peter Chen

Good morning Chair and members of the committee. Thank you for the opportunity to testify.
Economic development tax credits should be targeted towards projects that create good jobs for working people, spur needed economic development in areas of the state that have faced historic disinvestment, and provide positive net-benefits to the communities where projects are built.

The reauthorization of the state’s economic tax credit programs added statutory guardrails and accountability to prior programs through Emerge and Aspire, requiring that corporations that wanted state subsidies needed to prove they were providing real benefits to the state’s communities most in need of business development. New Jersey Policy Perspective (NJPP) encourages state lawmakers to incorporate those principles into this program to protect the state’s finances and its residents from bad deals.

The simplest path forward: Build the manufacturing tax credit program within the existing structure of Emerge, rather than create it from scratch.

As it stands, the proposed program will take potential credits out of Emerge and Aspire, making less available for economic development and affordable housing construction in the parts of the state most in need. Instead of using the existing guardrails of Emerge or Aspire, the proposed bill instead delegates much of the responsibility for ensuring fair deals to the Economic Development Authority (EDA), rather than codifying them in statute.

The EDA has shown how Emerge and Aspire can encourage economic growth without giving up on enforcement of accountability measures for corporations truly committed to equitable growth in New Jersey. But a future EDA administration, without the statutory requirements of those programs, might take a trip back to the bad old days of unaccountable money going out the door without clear benefits for the state’s residents and communities.

Regardless of the overall merits of a manufacturing tax credit program, no one industry should sidestep the state’s existing guardrails and requirements for economic development tax credits. If corporations will get substantial state subsidization, the state should ensure its residents reap the benefits, not just corporate shareholders.

Topic Category: Tax and Budget