Topic Category: Tax and Budget

For the People, By the People: New Jersey State Budget 101

Posted on by Marleina Ubel

Every year, New Jersey legislators make choices that shape our communities through the state budget. The budget reveals short-term and long-term priorities of the state and is, at its very core, a moral document. It is how we pool all of our resources together, mainly through taxes, to fund vital programs and essential services that benefit all of us, including public schools and colleges, highways, mass transit, public-health infrastructure, and the social safety net. Communities, programs, services, and lives depend on the state budget.

Yet, despite the importance of the budget, many New Jersey residents do not understand the budget document or process, as they are complicated and rarely transparent. There is also a significant lack of information about how changes in the budget help or harm specific programs and services that are important to the overall economic and social health of the state, or how those programs and services are funded ー or, in many cases, underfunded. This explainer demystifies the state budget, including where the money comes from and goes, how the budget is created, and how residents can be a part of the process.

The Budget: What is it?

The state budget is a formal declaration of where public funds will be allocated. It is also a piece of legislation known as the Appropriations Act, which is passed by the Legislature and signed into law by the Governor every year. As such, it determines whether taxes increase or decrease, which residents and businesses will shoulder those changes, and how the state will gain and distribute additional revenue. This is important because policies that govern our shared investments should ensure that all people, regardless of their race, gender, income, or address, get a fair shot at economic opportunity and financial stability.

The budget is drafted with input from the Governor, state departments and agencies, the Legislature, residents, and after reading this explainer, you!

Where Does the Money Go?

The New Jersey budget funds programs and services that directly benefit the lives of all 8.9 million residents across the state. Through the budget, the state provides aid to 1.37 million students in 584 operating school districts[i] and supports over 300,000 college students attending New Jersey’s 30 public universities and colleges.[ii] It funds salaries and pensions for almost 70,000 state employees[iii] who keep the state government running and provides aid to local municipalities (read: cities, boroughs, townships) so they can meet the unique needs of their communities. The budget also funds critical safety net programs for when families fall on tough times, and many other things we tend to take for granted, such as clean air and water, reliable transit infrastructure, enforcement of labor laws, and much more. It is difficult to find anything that is not touched by the state government.

The largest areas of the budget are education and health and human services, which includes needs-based programs for families with limited income like Social Security Insurance (SSI) and Temporary Assistance for Needy Families (TANF).[iv] The chart below outlines some of the major expenditures in the budget for Fiscal Year 2021.[v]

Given that Education and Health and Human Services have long been the state’s largest investments, it’s worth exploring some key program areas and how they are impacted by the budget.

Education

Education accounts for the largest percentage of state appropriations, or money dedicated for a certain purpose ー and for good reason. High-quality public schools are a building block of New Jersey communities, as education spending is fundamental to advancing equity, building a strong workforce, and promoting social mobility. There are almost 1.4 million children enrolled in New Jersey public schools, and the quality of their education determines the future prosperity of the state.[vi] State spending on education goes toward funding things like textbooks and other supplies for students, fee waivers for activities and testing for low-income students, special education accommodations, and salaries and pensions for teachers, counselors, nurses, and other staff. It also includes costs associated with keeping public schools safe places to learn that are free of asbestos, lead, and other contaminants.

While New Jersey is known for having some of the best schools in the country, the state has routinely underfunded its school aid formula — sometimes by as much as $1 billion each year.[vii] There have been some attempts to close this funding gap, but they have fallen short and the state is backsliding.[viii] Further, salaries for many teachers and support staff are still alarmingly low,[ix] many schools still do not have what they need to be safe and effective institutions of learning, and guidance counselors and social workers are either overworked or have been let go to cut costs.[x] Until the state fully funds public education, some school districts will remain under-resourced and ill-equipped to provide students with a quality education. This inequality often falls along lines of race and class, underscoring the need for continued investment in public schools so all our children receive the education they deserve.

Health and Human Services

The Department of Human Services (DHS) is home to several critical safety net programs that help to keep New Jersey residents healthy. They include NJ FamilyCare, the state’s public health insurance program, which provides coverage for children, low-income adults, and the elderly; WorkFirst NJ, the state’s welfare program, which provides cash assistance to families having trouble affording basic needs; and the Supplemental Nutrition Assistance Program (SNAP), the state’s food assistance program, which helps low-income people put food on the table. DHS also provides support for residents with substance abuse issues, families in need of affordable child care, and housing assistance for people with developmental disabilities. Moreover, DHS provides critical support for the elderly with subsidized drugs for seniors, funds for long-term care facilities, and on-site investigations in cases of abuse or neglect.

The Department of Health makes up the state’s public health infrastructure and is the first line of defense in responding to public health crises such as the COVID-19 pandemic. They respond directly by disseminating information and helping connect individuals with critical resources, and they respond indirectly by funding local health initiatives in communities. The Department of Health also keeps some of the most vulnerable people in our state healthy through prevention education and the establishment of Harm Reduction Centers.

With nearly four in ten New Jersey residents struggling to make ends meet,[xi] a growing number of people experiencing substance use and mental health disorders, and an aging population that requires care and support, continued investments in a health infrastructure and robust social safety net are needed to maintain a strong quality of life for millions of New Jersey residents.

Where Does the Money Come From?

New Jersey, like all states, funds the state government with revenue from taxes, fines and fees, and transfers from the federal government.

A majority of the state’s revenue comes from the income tax, sales tax, and the corporate business tax (CBT), which account for approximately 75 percent of the state budget. Other major taxes include cigarette, alcohol, and motor fuel taxes. The state also generates revenue through various departmental fees, including marriage licenses, hunting and fishing licenses, and parking tickets.

Tax contributions are placed into multiple funds that New Jersey draws on to finance the necessities outlined above. Of these, the General Fund and the Property Tax Relief Fund are the largest and most important.

The General Fund is where all state revenues not restricted by statute, or not dedicated to specific areas of the budget, are deposited and from which most appropriations are made. The revenues in the Property Tax Relief Fund, however, are dedicated to reducing or offsetting property taxes. The chart below illustrates the actual revenue that was generated and deposited into the General Fund in 2019.[xii]

The Property Tax Relief Fund is made up of revenue generated from the New Jersey Gross Income Tax and one half-cent of the Sales and Use Tax. This fund provides direct property tax relief through programs like the Senior Freeze and Homestead Rebate, as well as indirect relief by funding local school districts and essential services provided by local governments — investments that would otherwise be funded by property taxes.

Is There Enough Revenue to Meet New Jersey’s Needs?

Taken together, New Jersey generates approximately $40 billion in revenue every year. While that may be a large amount of money, the state budget has struggled to keep up with mere inflation over the last decade — due in part to some major tax cuts that benefitted wealthy individuals and big corporations. Because states are required to pass balanced budgets, meaning annual spending cannot exceed annual revenue collections, the state must bring in additional revenue to pay for its growing obligations, including programs that were chronically underfunded over the last thirty years.[xiii] Even without new programs, the state must ramp up spending over the next few years to fully fund public schools (in adherence to the School Funding Reform Act) and make full annual pension contributions, which were routinely skipped under previous administrations. The state must also raise enough revenue to build up a healthy surplus and Rainy Day Fund to protect against future economic downturns. New Jersey currently has one of the lowest Rainy Day Funds in the nation as the reserves were never replenished after the Great Recession.

New Jersey needs new, fairer ways to raise revenue to both meet its existing obligations and make new investments that benefit our communities. By making the tax code fairer, New Jersey can create a healthy and vibrant place to live for everyone that calls New Jersey home.

How Does the Budget Become Law?

In New Jersey, the fiscal year runs from July 1st to June 30th of every year, but the budget process extends across many months and includes lots of different stakeholders — from the Legislature, to the Governor, to the leaders of state departments and agencies, to members of the public like you! Given the size and significance of the budget, it should be no surprise that the process is long and sometimes complicated. Let’s break it down.

What is the Budget Timeline?

The budget process is a nearly year-round affair.

September – January: It starts with the Office of Management and Budget (OMB), which manages the state’s financial assets, assessing the economy and making predictions about how much revenue is likely to be generated in the following year. With input from state agencies, they also make predictions about how much revenue will be needed to fund existing programs and departments.

January – February: With the projections from the OMB and requests for funding made by various departments, the governor prepares and presents a budget proposal to the Legislature and the public through the annual budget address, which takes place on or before the fourth Tuesday in February.[xiv] The governor’s address is what’s colloquially known as the start of “budget season” in Trenton.

February – May: Like OMB, the Office of Legislative Services (OLS) produces its own revenue projections, which the Legislature uses to craft their own budget or, as is often the case, make adjustments to the governor’s budget proposal. All the while, they hold extensive committee hearings for state agencies and the general public about their budget priorities. This part of the process begins after the governor’s budget address and generally runs through May.

June: The Legislature drafts and releases its own budget proposal, known as the Appropriations Act, which must be approved with a majority vote by both the Assembly and the Senate.[xv] Finally, the bill goes before the governor to be signed before the June 30th deadline.[xvi]

What is the Role of the Governor?

The governor of New Jersey enjoys an incredible amount of power and leverage in the budget process. Through the budget address, the governor sets the tone and priorities for the budget process. The governor’s initial budget proposal is also often used as the foundation for the Legislature’s budget bill. The governor also determines how much revenue is ultimately needed to balance the budget — which has big implications on tax policy — as the executive branch has the sole power to certify revenue estimates. And because the governor appoints the state Treasurer (as well as every other department head) the governor can influence both revenue projections and how much departments and agencies request in funding.

Once the Legislature passes their own budget proposal, the governor has four options:

  1. Sign the proposal, as is, into law.
  2. Reject the entire budget proposal outright and send it back to the Legislature.[xvii]
  3. “Line-item veto” certain spending priorities before signing the budget into law.
  4. If revenue projections from the OMB and the OLS are far enough apart, the governor may accept the budget as is and put some funding into a lockbox to be released later in the year if enough revenue is collected to cover those investments.

After the budget is signed into law, the governor also has the power to change the budget through Executive Orders. Nothing can be added to the budget, however, without approval from the Legislature.

What is the Role of the Legislature?

Once the governor releases a full budget proposal, the Legislature gets to work crafting their own bill with their own spending and revenue priorities. While the Legislature can choose to accept the governor’s budget in its entirety, this is unlikely. What often happens is that the Legislature writes their own budget and then negotiates a final deal with the governor.

Each house, the Senate and General Assembly, has their own budget committee that holds budget hearings throughout the Spring. Each committee has their own chairperson who wields power over their respective house’s budget process, but the Senate President and the Speaker of the Assembly ultimately act as the final gatekeepers for what is included in or excluded from the budget. The committees are responsible for hearing testimony from the public and all the state department heads. All of these hearings are also open to the public to attend.

After the budget becomes law, the Legislature has the power to change it by drafting and approving new bills to allocate funding for a particular program or service. This bill would have to follow the same process as the Appropriations Act and be signed into law by the governor.

If the governor vetoes a bill or performs a line-item veto, the Legislature has the power to override the veto with a two-thirds majority of all members of both the General Assembly and Senate.[xviii]

How Can Members of the Public Participate in the Budget Process?

Active participation in the budget process can really make a difference. Advocates and members of the public alike can and should share their priorities with the governor’s office and members of the Legislature both before and during the formal budget process.

While the governor is preparing the budget proposal, residents can contact the governor’s office to voice support for specific programs or initiatives that rely on state funding. You can also contact the governor’s office later in the budget process to voice your opinion in support of or opposition to potential programs at risk of being cut or line-item vetoed.

During the Legislature’s budget hearings, one of the best ways for residents to ensure their voices are heard is to testify at one of three public hearings offered by the Senate and Assembly budget committees. These hearings are often held across the state, with one meeting in each region of New Jersey: North, Central, and South. Anyone who signs up to testify can give comments. Legislators are meant to represent the people and be responsive to community needs. Believe it or not, most legislators like to hear from their constituents. Giving the issues you care about a face by providing a personal account can make an impact.

Writing, calling, and emailing legislators, including your own representative as well as those serving on the budget committees, with concerns or questions regarding a particular program or initiative is another way to ensure your voice is heard.

During the month of June, legislators negotiate the final budget within their caucuses and with the governor’s office. This is the time when advocates are the most active, lobbying and otherwise engaging legislators and the general public. This is a great opportunity to tap into your local advocacy organizations and meet with legislators about items in the budget that are of concern to you!

Glossary of Terms

Term

Definition
Appropriation A sum of money that is authorized by the Legislature for a specific expenditure for a single fiscal year.
Appropriations Act The bill passed by the New Jersey Legislature that ultimately becomes the state’s annual budget. The budget becomes law when the Appropriations Act is signed by the Governor.
Corporate Business Tax (CBT) A tax on the net income or capital of a corporation. There are different rates for C and S Corporations.
Earmark Designated funds or resources for a particular purpose.
Expenditure Money owed, whether paid or unpaid.
Fiscal Year The twelve-month period to which the annual budget applies. New Jersey has a July 1 to June 30 fiscal year.
General Assembly One of the two Houses that comprises the state Legislature. The General Assembly has 80 members, two elected from each legislative district, and is presided over by the Assembly Speaker.
Line Item Any single item for which an appropriation is provided in the Appropriations Act.
Line-Item Veto Applying only to bills containing an appropriation, this veto action allows the Governor to approve the bill but reduce or eliminate funding for specific items.
Office of Legislative Services (OLS) A non-partisan agency of the Legislature that provides professional support services, including analysis, research, bill drafting, and legal services. In addition, the office provides information about the Legislature to the public.
Office of Management and Budget (OMB) An agency of the Governor’s Office that manages New Jersey’s financial assets. With direction from the Governor, the annual budget is the responsibility of the Office of Management and Budget (OMB).
Senate One of the two Houses that comprises the state Legislature. The Senate has 40 members, one elected from each legislative district, and is presided over by the Senate President.
Senate President The chief presiding officer of the Senate during legislative sessions. The Senate President appoints committee chairs and members of committees and commissions, refers bills and resolutions to reference committees, sets the agenda for session days, and supervises the administration of the day-to-day business of the Senate.
Speaker of the General Assembly The chief presiding officer of the General Assembly during legislative sessions. The Assembly Speaker appoints committee chairs and members of committees and commissions, refers bills and resolutions to reference committees, sets the agenda for session days, and supervises the administration of the day-to-day business of the General Assembly.
Veto An official action taken by the Governor to nullify or deny a legislative action.

 

End Notes

[i] State of New Jersey Department of Education. (2019). https://www.state.nj.us/education/data/fact.htm

[ii] Nelson, B. (2019, July 25). What N.J. colleges are growing (and shrinking) the most? NJ.com. Retrieved 2020, from https://www.nj.com/data/2019/07/what-nj-colleges-are-growing-and-shrinking-the-most.html

[iii] https://www.state.nj.us/csc/about/publications/workforce/pdf/2018%20Workforce%20Profile%20final%20copy.pdf

[iv] In NJ, TANF is also called “Work First New Jersey.”

[v] Some of the agencies that are separate have been combined in this chart in order to make it easier to digest.

[vi] Nj.gov: https://www.nj.gov/treasury/omb/publications/19citizensguide/citguide.pdf

[vii] Clark, Kakkar, & Marcus (2020, September). Here’s how much money every N.J. school district gets in state funding shakeup.https://www.nj.com/education/2020/02/heres-how-much-money-every-nj-school-district-gets-in-state-funding-shakeup.html

[viii] Sitrin (2020, September) Why New Jersey’s progressive school funding formula still isn’t working for some children. https://www.politico.com/states/new-jersey/story/2020/09/30/why-new-jerseys-progressive-school-funding-formula-still-isnt-working-for-some-children-1318599

[ix] Weber, M. (2019, September). New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists. https://www.njpp.org/wp-content/uploads/2019/09/NJ-Teacher-Workforce-2019-Full-Report.pdf

[x]This report highlights how schools suffer (and which schools) due to lack of investment:  https://www.njpp.org/publications/blog-category/new-jerseys-school-re-openings-are-racially-unequal/

[xi] ALICE (Asset Limited, Income Constrained, Employed) Project, New Jersey (2020). https://www.unitedforalice.org/Attachments/AllReports/2020ALICEReport_NJ_FINAL.pdf

[xii] FY2019 is the most recent year for which there is actual revenue data. The data for more recent years are currently “estimated” revenues. Source: Office of Management and Budget: Summaries of Revenues, Expenditures, and Fund Balances.

[xiii] The archives containing all budget documents can be found on the OMB’s website. This is a summary of the funds from FY2010, indicating that the balance of the state funds is just under 30 billion.

[xiv] Some exceptions are made to this deadline: it can be superseded by legislation, and if it is a governor’s first term, there is an extended deadline of March 13th.

[xv] At least 21 votes in the Senate and 41 in the General Assembly

[xvi] More detailed and technical information about the state’s budget process: NJ OMB

[xvii] If a Governor vetoes a bill, the Legislature can override it by a vote of at least two-thirds of the members of each house.

[xviii] Here is a FAQ from the OMB that contains more technical information and links to all the budget publications released by the state.

New Jersey Deserves Better Than $14 Billion Corporate Tax Break Law

Posted on by Brandon McKoy

Earlier today, Governor Murphy signed the Economic Recovery Act into law. The bill doubles down on corporate business tax incentives, a failed economic development strategy, with a price tag of $14 billion over seven years. In response to the bill signing, New Jersey Policy Perspective releases the following statement.

Brandon McKoy, President, NJPP:

“With a stroke of a pen, New Jersey has chosen to repeat the mistakes of the past by giving away billions of dollars in corporate tax breaks. This is a bloated economic development strategy that has failed to work, not only in New Jersey but in every other state that participates in this costly race to the bottom.

“The reality is, based on a growing body of research, corporate tax breaks of this scale are rarely a good deal for states. They are much more likely to shortchange the Treasury for decades to come. These super-charged programs will leave the state with far fewer resources for a robust recovery. It will also crowd out revenue in future budgets to invest in proven building blocks of a state economy, like education, health care, child care support, mass transit, and job training.

“With this new law, New Jersey continues to be out of step with the rest of the country by digging its heels into a failed economic development strategy. While a number of laudable reforms and innovative incentives are included in the Economic Recovery Act, its size and scope actually surpass that of the expired programs. Simply put, size matters. A $14 billion program is hardly a disciplined and targeted approach to economic development.

“Despite its name, there is little to nothing targeting small businesses and the state’s economic recovery from the ongoing COVID pandemic.

“Instead the ERA mirrors some of the most egregious elements of the previous generation of economic incentives: overly generous tax subsidies for corporations that typically sell them for cash, a program design that favors businesses with the resources to navigate the application process, a deliberate disconnect between the EDA and the annual state budget, and a refusal to entertain the idea of a ceasefire agreement with neighboring states. New Jersey deserves better.”

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

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

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

Brandon McKoy, President, NJPP:

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

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

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

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

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.
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Legislators Should Vote No on $11.5 Billion Corporate Tax Subsidy Program

Posted on by Sheila Reynertson

The following testimony, on A4, was delivered to the Assembly Appropriations Committee on December 18, 2020.

Good morning, Chairman Burzichelli and members of the Assembly Appropriations Committee. My name is Sheila Reynertson and I am a senior policy analyst at New Jersey Policy Perspective. Thank you for the opportunity to testify on A4.

First, we applaud the important improvements in this legislation regarding oversight and accountability: a robust Community Benefit Agreement requirement, scaled down tax credit cap on each newly created job, tighter reporting requirements, and newly appointed compliance officer and an Inspector General to protect public dollars.

But the scale of this proposal is simply too large. Up until 2010, New Jersey averaged less than $100 million per year on programs authorized by the Economic Development Authority. Only during the Christie administration did the size of the programs balloon to over $1 billion year after year. This proposal takes what should be viewed as unnecessarily exorbitant and attempts to give it a sense of credibility it doesn’t deserve.

Comparable states like Maryland and Massachusetts spend an average of $100.4 million and $193.5 million a year, respectively, on economic development subsidies annually. The idea that New Jersey must have a program of this scale — over $1.5 billion per year — is irresponsible and threatens the state’s short- and long-term fiscal health.

Let’s step back a moment. The original proposal from 2019 topped off at $3 billion. As of last week, negotiations for this bill more than doubled to $7 billion total. And now, here we are looking down the barrel of a $11.5 billion proposal.

What happened? The two biggest programs — the same ones that were out of control under the Christie administration — have ballooned from a combined $300 million limit per year to $1.1 billion a year. At the same time, the minimum job and affordable housing requirements have both been watered down. How does that serve New Jersey taxpayers?

And the spending caps on these fabled “mega-projects” that may or may not transpire have ballooned as well. Originally, up to three redevelopment deals in the transformative program could each receive up to $100 million in tax credits. Now, 10 such large projects could be approved, and each could receive up to $250 million in tax credits each. The annual cap for the other mega-project concept — the institution-anchored redevelopment program — doubled from $100 million to $200 million.

Meanwhile, as we witness the biggest crisis to hit small businesses in our lifetime, this legislation throws them a bone with a loan program that may or may not allocate $50 million per year.

Two years. This legislature had two years of expert testimony from the state Comptroller and national experts at organizations like Pew Charitable Trusts and the Conference of State Legislatures who described the downsides of massive subsidies and limited upside. Best practices and sound research were tossed aside to “get this done before the year ends.” And nobody had the courage to say, “We’ve gone too far.”

Just yesterday, Forbes published an article on the utility of corporate tax subsidies. The jury decision is final, according to economists of all political stripes.

“Conservative scholars at George Mason University’s Mercatus Center find ‘sub­sidies have little to no effect on where companies choose to invest.’  And progressive economists Alan Peters and Peter Fisher conclude that subsidies work at best 10 percent of the time, ‘and are simply a waste of money the other 90 percent.’”

Ultimately, this bill represents a doubling down on the failed strategy of the 2013 Economic Opportunity Act and will weaken our ability as a state to afford our existing obligations and emerging needs — especially as we recover from the COVID pandemic and recession. The proposal is not sufficiently targeted to the areas of New Jersey’s economy that will need the greatest support and will weaken our ability to bolster proven economic drivers and pay down our oversized obligations.

A vote in favor of this legislation says you have confidence that the state will have enough resources in 10 years to simultaneously pay down the recently borrowed $4.5 billion and dole out tax subsidies by the billions. It’s the height of irresponsible stewardship of the public’s money.

We are not implying that the state completely forgoes tax subsidies — we are stating unequivocally that a program of this size is irresponsible and needs to be scaled back, specifically in the job growth and redevelopment programs.

We respectfully request legislators to vote NO on A4 and allow for time to rightsize this tool of economic development so it can fit back into the toolbox.

I am happy to answer any questions you may have. Thank you.

For The Many Calls on Governor and Legislature to Take EDA Bill Off Fast-Track

Posted on by NJPP Staff

December 17, 2020 – With state lawmakers fast-tracking a 200-plus page bill to renew New Jersey’s corporate tax subsidy programs, good government watch dogs and advocates from across the political spectrum are urging Governor Murphy and legislative leaders to slow it down.

In an open letter sent earlier today to Governor Murphy, Senate President Sweeney, and Assembly Speaker Coughlin, the For The Many NJ coalition calls for the bill to be taken off the fast-track so the public can properly scrutinize it, and for lawmakers to rein in the $11.5 billion price tag of the proposal.

“This bill is far too big, and it is moving far too fast,” the letter reads. “Fast-tracking billions of dollars in new corporate tax breaks through the Legislature in less than a week will not allow the public, press, policy experts, or advocates time to adequately vet such a comprehensive and costly proposal.”

The letter highlights that the proposal (A4/S3295) would allow the state to award even more corporate subsidies than under the Economic Opportunity Act, the controversial bill passed in 2013 that was heavily scrutinized by an independent task force commissioned by Governor Murphy.

“The task force’s findings, combined with independent investigative reporting, made clear that New Jersey’s corporate tax subsidies had robbed the state Treasury of billions of dollars with little-to-no return on investment for the average taxpayer,” the coalition writes. “That is why we are so surprised by the sheer size of the new corporate tax subsidy legislation that was announced on Tuesday.”

During the Christie administration, New Jersey awarded more than $8 billion in corporate tax subsidies with little-to-no return on investment for the average taxpayer. The new proposal being fast-tracked through the Legislature would normalize this level of spending and crowd out funds in future state budgets that could otherwise go toward public schools and transit, public goods proven to grow the economy.

“The sky-high caps in this bill are even larger than what the state spent under the Economic Opportunity Act and would cement New Jersey’s standing as a national outlier in corporate tax subsidy spending,” the letter adds.

The letter is signed by more than thirty organizations, including New Jersey Working Families, New Jersey Policy Perspective, Americans for Prosperity – New Jersey, and the Good Government Coalition of New Jersey.

Read the full letter here.

For The Many is a statewide coalition of more than 30 organizations working collectively to expand funding for essential services and improve budget practices to adequately meet current and future needs, especially for communities that have been historically marginalized.

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New Jersey Cannot Afford $11.5 Billion in Corporate Tax Subsidies

Posted on by Brandon McKoy

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

Brandon McKoy, President, NJPP: 

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

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

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

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No Need to Rush Horizon Restructuring

Posted on by Brittany Holom-Trundy

The following testimony, on S3218, was delivered to the Senate Budget and Appropriations Committee on December 15, 2020.

Good morning, Chairman Sarlo and members of the Budget and Appropriations Committee. Thank you for this opportunity to provide my testimony on the proposed restructuring of Horizon. My name is Dr. Brittany Holom-Trundy, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

This is one of the most complex pieces of legislation that state lawmakers have considered all year. As you know, the bill would change Horizon’s corporate structure to separate its health insurance operations from other business ventures; it would also give Horizon a tax cut. Because this proposal is crucial to the future of the state, it must be carefully considered in an open and transparent manner. There is no reason to rush the process and doing so would simply invite shortsighted decision-making and regrettable mistakes.

Due to the uncertainty of the bill’s fiscal effects, I have a couple of major concerns.

First, this bill doesn’t provide any information on the fiscal impact of this restructuring on the state. Yes, the $600 million upfront payment may seem enticing, but this is not simply about the lump sum payment. Changes to Horizon’s tax status can lead to significant losses that must be taken into account. For example, we do not yet have a fiscal note on the application of the tax cap law and how this difference, as well as other changes in tax obligations, will impact the funds that the state collects annually. The state is already receiving only a small fraction of the value of the public assets in this deal, and the calculation of the amount owed seems arbitrary at best. Further fiscal analysis of the restructuring by an independent entity is needed.

Additionally, the second part of these funds — the $650 million to be paid over a number of years — are not fully guaranteed, since they can expire under certain conditions. The state is essentially acting, then, as an unsecured general creditor. It is allowing Horizon to change its annual tax obligations for the long term without a backup plan should these funds go unpaid. If we consider this money to be a payment in lieu of taxes (PILOT), then the state should guarantee that the full value of the promised funds will be collected.

Past governors have fallen for the lure of upfront payments to fill budget holes during tough economic times; short-term fixes negatively affect the state’s finances and the state’s credit rating in the long term. We need a fiscal note and independent evaluation of Horizon’s assets and changes to its tax status to understand the full implications of this restructuring.

Lawmakers must consider slowing down this bill to ensure that the state and all New Jerseyans get the best deal possible from any restructuring.

Thank you for your time.

Cleanup Bill is a Missed Opportunity to Close Corporate Tax Loopholes

Posted on by Sheila Reynertson

The following testimony, on A4809, was delivered to the Assembly Commerce and Economic Development Committee on October 21, 2020.

Thank you, Chairman Johnson and members of the committee for this opportunity to speak with you today.

I am testifying in support of A4809 as a technical improvement to the corporate business tax code. This bill should ease the accounting processes for both the state Division of Taxation and tax filers. However, New Jersey Policy Perspective (NJPP) views this legislation as a missed opportunity to close the remaining loopholes in the corporate business tax code. New Jersey successfully enacted combined reporting legislation in 2018, but large corporations continue to utilize tax avoidance schemes, which further erode New Jersey’s corporate business tax revenue and funding for investments that are critically important for the state, especially right now as we chart our recovery from COVID-19.

Given the extraordinary circumstances of a pandemic-induced recession, New Jersey must get a handle on multinational corporations that brazenly exploit tax loopholes. Given New Jersey’s budget restraints, the state is in no position to provide special favors to businesses that need it the least.

Respectfully, I ask members of the committee to consider some major shortcomings of current law that this bill seeks to codify, each a missed opportunity to close tax loopholes, some big enough to drive a truck through.

The “Nexus Isolation” Method

A4809 clarifies that the income from the separate activities of a multi-state corporation will only be taxed if one of a corporation’s members independently has a physical presence in, or nexus with, New Jersey. The “nexus isolation” strategy itself is not consistent with the fundamental conceptual goal of combined reporting, which is to ensure that the tax liability of a corporation to a state is the same regardless of whether it consists of a single member or multiple members. What this bill actually clarifies is how to give those out-of-state corporations an enormous tax loophole worth millions of dollars in foregone revenue. And the bill’s assertion that this method is in line with the United States Supreme Court jurisprudence on the unitary business principle and combined groups implies that another more effective method is unconstitutional. No court has ever found that to be the case.

Deferred Tax Deduction Provision

A4809 also repeals the use of certain credits to reduce deferred tax liability on a corporation’s balance sheet, but does so without a glance at the deferred tax deduction, an accounting adjustment that offsets a “paper” expense like a one-time income tax increase. This little trick protects publicly traded companies from any appearance of depreciation that could impact their stock value, though there is no compelling evidence to support such a claim. It is an unwarranted and unsubstantiated tax giveaway that will eventually cause New Jersey to forgo real revenue needed to fund critical assets and services. In other words, another lost opportunity.

Tax Haven Subsidiaries in Unitary Groups

The combined reporting legislation as proposed in 2018 included the definition of “tax haven” to ensure that a multinational corporation reports subsidiaries that may be used as tax shelters. The final legislation dropped the definition of “tax haven” entirely, which opened up a loophole so large that between $95 million and $233 million flows right through it every year. This bill fails to address that, which is a shame given New Jersey’s precarious fiscal situation.

Small business owners in New Jersey do not have the ability to move taxable income out of the state or country like these large corporations and their well-compensated tax lawyers do. A strong combined reporting statute would level the playing field for all businesses. That can’t happen with a technical clean-up bill. It’s time to make closing loopholes in the existing corporate business tax code a priority.

Thank you.

Budget Breakdown: Everything You Need to Know About the FY 2021 State Budget

Posted on by Sheila Reynertson

New Jersey’s recently enacted $32.7 billion budget is an anomaly in many ways given the extraordinary circumstances under which it was crafted. Covering a 9-month period, it relies on borrowing billions of dollars through a federal loan program to avoid deep cuts and stay on track with pension payments. It raises taxes on those who actually prospered during the pandemic 一 the state’s wealthiest individuals and most profitable corporations. It advances equity by repealing a racist policy in the state’s cash assistance program and by expanding a tax credit for low-income workers and their families. And it puts aside a healthy surplus in case the state gets slammed by a second wave of COVID-19.

Some of NJPP’s most important policy recommendations made it into this year’s budget as a progressive response to tough times: raising revenue, providing support to those who need it the most, and expanding investments in health care and education. In the midst of a public health crisis, New Jersey is setting an example for the nation by heeding lessons learned from the Great Recession.

A Fairer Tax Code

Millionaires Tax  — With a Caveat
New Jersey’s tax code just got more progressive with the creation of a new tax bracket for the state’s wealthiest earners. Income over $1 million per year is now taxed at 10.75 percent; this is estimated to generate over $400 million annually. However, a rebate program for 800,000 families earning less than $150,000 in annual income will largely eat up the new revenue gained starting next fiscal year.

Corporate Business Tax Surcharge
After receiving a windfall from the 2017 federal tax cuts, successful corporations will continue to pay a 2.5 percent surcharge on the corporate business tax to help fund critical programs that all New Jerseyans rely upon. This surcharge will generate over $200 million in new revenue per year through Fiscal Year 2023.

Health Maintenance Organization (HMO) Tax
The HMO tax will increase a state assessment on certain health insurance premiums from 3 to 5 percent, which will generate $107 million to supplement funding for charity care. Most of these premiums are tied to Medicaid plans that will draw down this increase with federal matching dollars.

Health Insurance Assessment
While technically passed before the budget deadline, this revenue raiser replaces the recently repealed federal fee on health insurance companies that was meant to help fund the Affordable Care Act (ACA). The state will collect 2.5 percent on net premiums of individual and large group plans, raising roughly $200 million in new revenue. Funds will support health insurance affordability measures, including the reinsurance program and additional state subsidies on the new state exchange for those with incomes below 400 percent of the federal poverty level.

Important Investments

Maintaining Pension Payments for Retired Public Workers
The retirement fund continues on its pathway toward stability with a $4.7 billion state pension contribution. Despite the fiscal challenges, New Jersey chose to make this contribution 一 the largest in the state’s history 一 because postponing or reducing it meant risking a total collapse of the retirement system.

Property Tax Relief
The final budget restores $500 million in funding for two property tax relief programs geared toward vulnerable homeowners.The Homestead benefit program provides 580,000 seniors, disabled, or low-income homeowners with a credit on their property tax bill. The Senior Freeze program reimburses eligible seniors and people who are disabled for property tax increases and mobile home park site fees.

Tax Credits for Working Families
The Earned Income Tax Credit (EITC), one of the state’s most effective anti-poverty measures, increases from 39 to 40 percent of the federal EITC level, marking the final stage of a three-year phase in. Further, the minimum age requirement for workers who are not raising children at home drops from 25 to 21 years old, increasing the after-tax earnings of up to 58,000 low-paid young workers. This eligibility expansion is estimated to add up to $12.1 million to the state and local economies.

Helping Students Cope and Excel
From K-12 to college, public schools across the state will receive their rightful state aid as required by the school funding formula. This budget also restores $15 million in funding for the School Linked Services Program, which provides mental health treatment services to students; this investment is critical as students continue to struggle with mental health issues caused and/or compounded by the ongoing pandemic. Community college funding was also restored in the budget deal, guaranteeing $25 million in tuition aid.

Keeping Families Together
This year’s budget expands funding for free legal counsel for New Jersey immigrants in detention. While this funding will only meet a fraction of the need, this increase, from $3.1 million last year to $6.2 million this year, substantially expands access to representation and due process.

Maintaining Health Care Access
New Jersey will maintain state support for medical care through Medicaid, a sorely needed move as enrollment numbers have skyrocketed due to the loss of employment insurance during the pandemic. The Charity Care program, which supports hospitals treating uninsured and underinsured residents, and the Graduate Medical Education program, which supports teaching hospitals, also maintained funding in the budget deal. It’s good to see New Jersey prioritize access to health care and improved outcomes as we recover from the pandemic.

Addressing Child Poverty
New Jersey’s budget takes a major step forward in dismantling a harmful, racist policy with the permanent repeal of the “family cap” in the state’s Temporary Assistance for Needy Families (TANF) program. The family cap, which originated in the Garden State in 1992, prohibits recipients of Work First New Jersey cash assistance from receiving additional per-child assistance if they choose to have another child. This coercive law — meant to reduce pregnancies in low-income families through punishment, rather than increased resources — only pushed families deeper into poverty. Still in place in 13 states, the policy was effectively dropped from Governor Murphy’s 2019 and 2020 budgets. The signed law makes the change statutorily permanent.

Expanding Environmental Justice
The final budget avoids a $5 million cut, as proposed in the Governor’s original budget proposal, to the Lead Hazard Remediation Fund. This fund supports the removal of lead-based hazards in homes and schools, which harm children’s lifelong health, education, and developmental, especially for those exposed at a very young age. These hazards are generally higher amongst children of color living and learning in older buildings. The budget also dedicates $60 million for the replacement of lead service pipe lines, a small portion of the projected price tag of $2 billion, according to the Department of Environmental Protection.

Supporting Energy Efficiency
Consumers who purchase mid-range electric cars and trucks will receive rebates from the state through the Clean Energy program, which received $23 million in funding in this year’s budget.  However, the budget also diverts $100 million from the Clean Energy Fund ($60 million to NJ Transit and another $40 million to the General Fund), which reduces energy efficiency programs for homeowners and low-income households.

Improving Transportation
Significant federal help — $1.4 billion — was provided to NJ Transit through the CARES Act. This aid helps to offset losses due to lower ridership during the height of the COVID-19 outbreak. The state-owned system is also expected to receive a subsidy of $386 million using borrowed funds.

Budgeting Best Practices

New Borrowing Instead of Harmful Cuts
New Jersey lawmakers have tapped into the new federal borrowing program to help address revenue shortfalls brought on by COVID-19 without resorting to austerity measures. This borrowing also allows the state to fund long-term obligations like the state’s underfunded pension system. With extremely low interest rates, any borrowing approved by the legislative committee will allow New Jersey to manage immediate cash flow problems until the economy begins to improve. Should more federal aid be available to states in the near future, New Jersey could fast-track the repayment schedule to lessen the state’s debt load and alleviate concerns about its widening structural budget deficit.

Big Surplus
The budget’s surplus of $2.5 billion, the largest in over a decade, has been set aside as an insurance policy against any economic damage from a potential second wave of COVID-19. Should any surplus funds remain at the end of the fiscal year, half could then be deposited into the state’s empty rainy day fund for future emergencies.

What’s Missing

Repeal of Christie-era Tax Cuts
With economic projections showing a sluggish rebound, New Jersey can’t depend on economic growth alone to make up the difference once borrowed dollars are gone and debt service payments come due. Recapturing over $1 billion in lost revenue by repealing two key tax cuts must remain on the table. New Jersey must fix how inherited wealth is taxed by either bringing back the estate tax or reforming the state’s inheritance tax. The repeal of the 2016 sales tax cut, which left a $600 million hole in the state budget every year, must also be prioritized.

Full Expansion of Tax Credits for Workers
The Earned Income Tax Credit (EITC) still excludes far too many low-paid workers in New Jersey. State lawmakers should further improve access to the credit by expanding it to workers who file taxes using an Individual Taxpayer Identification Number (ITIN) and eliminating the minimum and maximum age thresholds altogether. In the absence of a federal EITC for ITIN filers and childless workers under 25 and over 64 years old, the state should also increase the credit amount for these groups from 40 percent to 100 percent of the federal credit.

Economic Relief for Immigrant Families
More than six months after the onset of COVID-19, over half a million New Jersey residents are still without economic relief. Unlike those who qualify for publicly funded programs like unemployment insurance and federal stimulus payments, many immigrants have been left behind. Despite months of advocacy by affected workers, the final budget neglects to include any relief for these New Jersey workers and their families.

Addressing Deep Poverty in a Pandemic
Enrollment in cash assistance programs have increased due to the pandemic-induced economic crisis, yet the final budget fails to reflect that. The benefit level for families receiving assistance is flat funded, while overall state funding for Work First New Jersey benefits was cut. State lawmakers have defended the funding cut with the argument that federal funds can fill that gap. However, it is unclear whether federal dollars will be sufficient to cover the increased number of residents enrolling in poverty alleviation programs.

Broad Coalition of Advocates Applaud State Budget, Millionaires Tax

Posted on by NJPP Staff

For The Many NJ coalition applaud Governor Murphy and legislative leaders for rejecting austerity and setting a strong foundation for New Jersey’s COVID-19 recovery. 

September 29, 2020 – New Jersey’s leading advocates for working families applauded the state budget signed into law earlier today by Governor Phil Murphy. The budget for Fiscal Year 2021 balances revenue shortfalls brought on by COVID-19 with a combination of borrowing and tax increases on the state’s wealthiest residents and biggest corporations. This will allow the state to maintain investments in key programs and services that will help New Jersey ultimately recover from the pandemic.

“Today is a historic moment for New Jersey, as the state tax code is getting a lot fairer — and for good reason,” said Sheila Reynertson, Senior Policy Analyst at New Jersey Policy Perspective (NJPP). “Income inequality is at an all-time high, and for far too long, lawmakers failed to address this in a meaningful way. Today, that changes. The millionaires tax will help New Jersey maintain investments in crucial assets like education while responding to the COVID-19 health crisis without further worsening economic and racial inequality. We truly are setting an example for the nation on how to build an economy that works for all of us, not just a chosen few.”

Unlike state budgets passed during the last economic downturn, the budget signed today rejects austerity measures and instead calls on New Jersey’s wealthiest individuals and biggest corporations to pay closer to their fair share in taxes.

“We applaud the Governor’s leadership and the legislature’s willingness to take a stand for the 99% of New Jerseyans who will benefit from this budget,” said Sue Altman, Executive Director of the New Jersey Working Families Alliance. “May this be the first step toward long term budgetary thinking and fairness in our state.”

The budget includes a millionaires tax — which raises the marginal income tax rate on earnings over $1 million from 8.97% to 10.75% — and extends the corporate business tax surcharge. This follows recommendations made by the For The Many NJ coalition and more than 90 economists who warned the legislature last month against harmful cuts.

“This budget marks an important step forward in addressing longstanding racial and socioeconomic inequities in our tax code, with millionaires and the wealthiest of corporations finally paying their fair share and an expansion of Earned Income Tax Credits,” said Dena Mottola Jaborska, Associate Director for New Jersey Citizen Action. “But we have a lot more to do, and we look forward to working closely with Governor Murphy and the Legislature to ensure state budget policy meets our most pressing pandemic needs while also making smart investments in our future. These priorities include assisting immigrants excluded from federal pandemic relief, restoring New Jersey’s fiscal health, and ensuring all New Jerseyans have access to programs and services they need to both survive and prosper.”

The budget is far from perfect, however, as there remains more work to be done to advance racial equity and ensure no one is left behind in New Jersey’s pandemic recovery. This includes providing support to the state’s undocumented immigrants and residents living in mixed status households who were shut out from receiving state and federal COVID-19 relief.

“Today’s budget signing is a historic but incomplete victory for tax fairness and equity,” said Sara Cullinane, Director of Make the Road New Jersey. “A half-million undocumented immigrants and potentially 225,000 US citizens will see nothing in COVID aid. Many of these families have survived more than six months without income or a penny in government relief. We urge the legislature and Governor Murphy to provide COVID relief for excluded workers and their families and make sure these families are included in the tax rebate. It is unjust to leave more than a half-million New Jerseyans behind.”

“New Jersey’s immigrant families have gone six months living with increasing economic insecurity every day,” said Maneesha Kelkar, Interim Director of New Jersey Alliance for Immigrant Justice. ”Despite the gains made by Governor Murphy’s budget, immigrants remain excluded, without unemployment benefits or COVID19 relief. A balanced and fair budget must include all residents, regardless of immigration status, so that every household can get their basic needs fulfilled.”

Members of For The Many NJ coalition made the following statements in support of the budget and millionaires tax:

Marie Blistan, President, New Jersey Education Association “We are pleased that this consensus budget prioritizes the needs of students, their families, and all hardworking New Jersey residents. Its emphasis on fiscal responsibility and tax fairness will help ensure that New Jersey emerges stronger from this current crisis, with a firm foundation for future fairness and prosperity.”

Renee Koubiadis, Executive Director, Anti-Poverty Network of New Jersey “The Anti-Poverty Network of New Jersey is pleased to see the inclusion of a true millionaires tax and the continuation of a fair corporate business tax in the state budget. These steps move New Jersey towards real tax fairness with crucial new revenues, rather than putting an unfair burden on middle and low-income residents for our state’s recovery. During this unprecedented health and economic crisis, these real investments in all of our state’s residents are needed to see valuable returns in our state’s economy and for New Jersey to be a place where all of our residents can recover and thrive.”

Brandon Castro, Campaign Organizer, New Jersey Work Environment Council “After years of advocacy, the Work Environment Council is happy to see the New Jersey State Government prioritize economic justice and tax fairness, and finally pass a millionaire’s tax. We hope that this will only be the beginning and that the state will continue to move away from austerity measures in times of economic crisis, and towards a more just, democratic economy for everyone.”

Doug O’Malley, Director, Environment New Jersey “State agency funding is critical, and the final budget ensures we won’t see furloughs in key state agencies like the NJDEP. We are grateful for the investments in lead remediation, which reduces lead in children’s blood, and the full funding for RGGI and EV rebates to electrify vehicles and to clean our air. The increased investments of the Corporate Business Tax, which worked to clean contaminated toxic sites more than 20 years ago, is a win for investing in the public good. We need in the next budget cycle to finally end the ongoing raids of the Clean Energy Fund and dedicate funding to NJ Transit.”

Amy Goldsmith, NJ State Director, Clean Water Action “At a time when New Jersey’s working families are hurting, our climate is in crisis, and our state is still fighting COVID-19, we are glad to see Governor Murphy and legislature pass the millionaires tax. This is just the beginning of a more progressive budget. From clean energy and respiratory disease, to lead in drinking water and raw sewage in waterways, critical programs are underfunded, and that’s why it is important to have everyone, especially millionaires, pay their fair share.”

Jeff Tittel, Director, New Jersey Sierra Club “This final budget restored key funding to important environmental programs. The budget eliminates some of the raids and one-shots that hurt the environment. This means there’s more money to make sure our air is clean, water is pure, and that we can clean up toxic sites. The budget restored $10 million for removing lead paint from homes and $22 million for the Recycling and Clean Communities Trust Funds, which will help implement the statewide plastic bag ban. NJ Transit saw an increase as well. There will also be more money for programs like open space, parks, cleaning up underground storage containers and contaminated sites, and watershed protection. This is because the Corporate Business Tax is increasing, and 6% of the CBT is dedicated to environmental programs. This budget has been an improvement for the environment and the people of New Jersey.”

Marcia Marley, President, BlueWaveNJ “BlueWaveNJ congratulates Governor Murphy and the legislature for creating a more equitable and fiscally responsible budget. Increasing revenue from millionaires and wealthy corporations rather than cutting services will preserve critical support for struggling New Jersey families and lessen the pandemic’s economic impact. The budget’s continuing investments in future generations will help lay the foundation for a stronger recovery. While we applaud many aspects of this budget, there is further work to be done. We look forward to working with the legislature and Governor to make sure no group is left behind.”

Barry Kushnir, President, Hudson County Central Labor Council and IFPTE Local 194 “The Hudson County Central Labor Council and IFPTE Local 194 are proud to support a state budget that includes tax fairness in a Millionaire’s Tax and Corporate Business Tax extension. Both are prudent and reasonable policies to raise much-needed revenue in an unprecedented crisis by asking those with the most to pay their fair share. While this is good news, our organizations remain committed to advocating on behalf of the many New Jersey families who continue to suffer inequality and will not relent in our pursuit of a budget that works for all.”

Leslie Bockol, Co-Executive Director, New Jersey 11th For Change  “For too long, tax policies (and tax loopholes) on the state and national level have been skewed to favor those in the top fraction of a percent in wealth and income. For too long, the state budget has been balanced disproportionately on hard-earned money that working people have needed to cover basic necessities — not luxuries — to build a secure future for their families. We are gratified to see Governor Murphy sign this historic bill into law today, and proud that New Jersey is leading the way on tax fairness!”

Kevin Brown, New Jersey State Director, 32BJ SEIU “We applaud the passage of a ‘millionaires tax’ which asks residents best able to contribute to do their part for our economic recovery. At the same time, our essential workers have sacrificed everything throughout this crisis. We need our state to recognize that the federal aid available to many working families for part of this year has been out of reach for immigrant families, who occupy a large share of essential jobs. It’s only right for our state to step in to provide some income replacement for them.”

For The Many 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 marginalized.  

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