Topic Category: Tax and Budget

New Jersey Second Hardest Hit State Under Senate Tax Proposal

Posted on by Jon Whiten

To read a PDF version of this report, click here.

Once the Senate tax proposal is fully phased in, New Jersey’s wealthiest 5 percent of taxpayers would receive an average $11,800 tax break each year while close to 1 in 4 Garden State taxpayers (22 percent) would pay an average of $2,330 more in a year in federal taxes.[1] (Unless otherwise noted, all data in this Fast Facts is on the impact in the year 2027, once the plan is fully phased in.)

In all, the wealthiest 5 percent of New Jerseyans – those with annual incomes over $440,000 a year – would receive about half (49 percent) of the tax cut coming to the state by 2027, while the bottom 60 percent (everyone earning less than $111,000 a year) would get just 28 percent.

While the Senate plan is slightly less tilted to New Jersey’s top earners than the House plan, at its core it retains all the same flaws as the House plan:

  • It increases federal deficits by more than $1.5 trillion over the coming decade
  • Its tax cuts that are heavily skewed to the wealthiest families and large corporations
  • It will lead to cuts to services and programs that working New Jerseyans count on
  • It will make it harder for states to invest in schools, infrastructure, health care and more
  • It punishes New Jersey more than nearly every other state

Nearly 1 in 4 New Jerseyans would face a tax hike by 2027 in large part because the Senate proposal would completely end Americans’ ability to deduct state and local income, sales and/or property taxes paid. (The House plan offered a partial elimination.) At 22 percent, New Jersey has the second highest share of taxpayers facing a tax hike behind only Maryland (27 percent). This is far higher than the total share of Americans – 13 percent ­– who face a tax hike.

A total of 1.8 million New Jersey households deduct a cumulative $17 billion in state income or sales taxes from their federal taxes, while 1.6 million New Jersey households deduct a cumulative $14.9 billion in local property taxes.[2] These deductions help tens of thousands of families in every single Congressional District.[3] New Jersey’s average residential property taxes are $8,549 a year, and 147 of New Jersey’s 565 municipalities (26 percent) have average residential property tax bills of over $10,000 a year.[4]

What’s more, this analysis of the “winners and losers” under the House proposal doesn’t take into account the impact of likely budget cuts that would be paired with these tax breaks. If the tax cuts were eventually paid for through the spending cuts on entitlements and federal programs promised in recent GOP budget proposals, it’s clear that any modest tax cut for low-income or middle-class New Jerseyans would be more than wiped out. (An analysis of the earlier tax framework that took program cuts into effect found the “vast majority of Americans” would lose – even if they took home small tax cuts.[5])

Endnotes

[1] Institute on Taxation and Economic Policy Microsimulation Tax Model, November 2017. Full dataset available at https://itep.org/senatetaxplan/

[2] New Jersey Policy Perspective, Fast Facts: Millions of New Jerseyans Deduct Billions in State & Local Taxes Each Year, November 2017.

[3] New Jersey Policy Perspective, State and Local Tax Deductions Benefit Tens of Thousands of New Jerseyans of All Incomes in Every Congressional District, November 2017.

[4] NJPP analysis of New Jersey Department of Community Affairs, 2016 Property Tax Tables. Available at http://www.nj.gov/dca/divisions/dlgs/resources/property_tax.html

[5] Center on Budget and Policy Priorities, Vast Majority of Americans Would Likely Lose From Senate GOP’s $1.5 Trillion in Tax Cuts, Once They’re Paid For, October 2017.

State and Local Tax Deductions Benefit Tens of Thousands of New Jerseyans of All Incomes in Every Congressional District

Posted on by Sheila Reynertson

By Sheila Reynertson and Jon Whiten

To read a PDF version of this report, click here.

As Republican lawmakers in Congress move forward with their tax proposal, much attention has been paid to the fate of state and local tax deductions, which allow taxpayers who itemize deductions on their federal income taxes to deduct state and local property taxes, and either state and local income taxes or general sales taxes.

These deductions are widely used in high-cost, high-tax states like New Jersey. In all, 41 percent of Garden State households file using these deductions – the third highest share of all states, after Maryland and Connecticut. These households deduct a total of $32.2 billion in state and local taxes each year, the third highest dollar amount after California and New York.[1]

More than 1 in 4 New Jerseyans would face a tax hike by 2027 under the House tax plan in large part because of changes to these deductions. The House’s proposal is to end Americans’ ability to deduct state/local income or sales taxes paid, while capping the amount of property taxes one could deduct at $10,000. While the latter provision is being pitched as a “compromise” to win over reluctant lawmakers from New Jersey and other similar states, nationally just 1 in 13 households would see any benefit from this change.[2] The Senate proposal, meanwhile, completely eliminates all the state and local tax deductions.

Altogether, these tax deductions are used by tens of thousands of New Jersey families across the income spectrum and in every Garden State Congressional District.[3]

And while Republican Congressional leaders point to a doubling of the standard deduction – the amount people deduct from their taxable incomes – as making up for the changes to these itemized deductions, that’s far from the case. That’s because even as the standard deduction would be doubled, personal exemptions would be eliminated and the tax rate for low-income earners would be increased from 10 percent to 12 percent. Even if the standard deduction were tripled, a significant portion of families that now itemize their deductions would still end up with tax increases.[4]

What’s more, the danger posed by the House tax proposal goes far beyond these changes to state and local deductions. In fact, the plan’s benefits are tilted to the wealthiest New Jerseyans, while the cost of the proposal would almost certainly lead to significant cuts to public services and investments on which all New Jerseyans – particularly low- and moderate-income families – rely.[5]

If the proposal moves forward in its current form, states would be squeezed on both ends: deep cuts to federal programs would reduce services for state residents, at the very same time the loss of key federal tax deductions would make it harder for states like New Jersey to raise enough revenue to provide a current baseline of services – much less make up for reduced support from the federal government.

And this problem is not alleviated by the so-called “compromise” in the House plan on the property tax deductions, because property taxes are not a major source of funding at the state level; they are levied by New Jersey’s local governments.

Millions of New Jerseyans Would Lose Ability to Deduct State Income or Sales Taxes

A total of 1.8 million New Jersey households deduct a cumulative $17 billion in state income or sales taxes from their federal taxes. At 40 percent of all taxpaying households, New Jersey ranks third highest in the nation, behind Maryland (45 percent) and Connecticut (41 percent). Of these 1,775,740 households, the overwhelming majority (1,525,000) take the income tax deduction; the remaining 250,740 take the sales tax deduction (taxpayers can’t take both).

The 11th Congressional District – represented by Rep. Rodney Frelinghuysen – has the highest number of households (195,695) and the highest share of households (53 percent) that deduct state income or sales taxes from their federal taxes. The 8th Congressional District – represented by Rep. Albio Sires – has the lowest number (92,738) and share (25.6 percent).

In terms of dollar amounts, the 7th Congressional District – represented by Rep. Leonard Lance – has the highest total amount deducted, at $2.97 billion each year and the highest average amount deducted, at $16,129 per year per family. The 2nd Congressional District – represented by Rep. Frank LoBiondo – has the lowest total amount ($586.3 million a year) and lowest average amount ($4,882 per year per family) deducted.

While a greater share of higher-income New Jerseyans deduct state income and sales taxes, the deduction is not exclusively taken by the state’s wealthiest families. In fact, 48 percent of all New Jersey households that deduct these taxes have annual incomes under $100,000 (19 percent under $50,000 and 29 percent between $50,000 and $100,000). An additional 34 percent have an annual income between $100,000 and $200,000, while 16 percent have annual incomes between $200,000 and $1 million. Just 1 percent of these households have annual incomes over $1 million.

Millions of New Jerseyans Would Lose Ability to Deduct Local Property Taxes

A total of 1.6 million New Jersey households deduct a cumulative $14.9 billion in local property taxes from their federal taxes. At 36 percent of all taxpaying households, New Jersey ranks third highest in the nation, behind Connecticut (37 percent) and Maryland (which at 36.4 percent just barely edges out the Garden State’s 35.7 percent). (Households can take the property tax deduction in addition to the income or sales tax deduction, so many of these 1.6 million taxpayers are from the same pool of the 1.8 million families taxing those deductions.)

Under the House proposal, an estimated 968,000 New Jersey households would no longer receive the property tax deduction, with the number of families taking the deduction falling by 60 percent next year, to just 658,000.[6] That’s because even though they’d still technically be able to take the property tax deduction, many would choose not to because the combination of itemized deductions (which would no longer include state income and sales taxes) would be smaller than the standard deduction. This would be a bad deal for many taxpayers even though the House bill makes the standard deduction more generous.

The 11th Congressional District – represented by Rep. Rodney Frelinghuysen – has the highest number of households (178,845) and the highest share of households (48.4 percent) that deduct local property taxes from their federal taxes. The 8th Congressional District – represented by Rep. Albio Sires – has the lowest number (54,069) and share (14.9 percent).

In terms of dollar amounts, the 11th Congressional District has the highest total amount deducted, at $2.06 billion a year, while the 7th Congressional District – represented by Rep. Leonard Lance – has the highest average amount deducted, at $11,745 per year per family. The 8th Congressional District has the lowest total amount deducted ($420.3 million a year), while the 2nd Congressional District – represented by Rep. Frank LoBiondo – has the lowest average amount deducted ($6,654 per year per family).

While the House tax proposal would currently maintain the property tax deduction up to $10,000, in higher-cost areas of New Jersey, property taxes can exceed $10,000 for many households that aren’t rich. New Jersey’s average residential property taxes are $8,549 a year, and 147 of New Jersey’s 565 municipalities (26 percent) have average residential property tax bills of over $10,000 a year.[7] Three Congressional Districts are home to average property tax deductions that exceed $10,000. And because the proposed $10,000 limit would not be adjusted for inflation or the growth in home values over time, it would hit more and more homeowners in the Garden State as the years went by.

While a greater share of higher-income New Jerseyans deduct local property taxes, the deduction is not exclusively taken by the state’s wealthiest families. In fact, 46 percent of New Jersey households that deduct these taxes have annual incomes under $100,000 (18 percent under $50,000 and 28 percent between $50,000 and $100,000). An additional 35 percent have an annual income between $100,000 and $200,000, while 17 percent have annual incomes between $200,000 and $1 million. Just 1 percent of these households have annual incomes over $1 million.

Endnotes

[1] All data on the use of these deductions in this Fast Facts are from a NJPP analysis of U.S. Internal Revenue Service Statistics of Income data from tax year 2015.

[2] Institute on Taxation and Economic Policy, House Plan Slashes SALT Deductions by 88%, Even with $10,000 Property Tax Deduction, November 2017.

[3] Using the 2015 IRS data referenced in Endnote 1, data by ZIP code were assigned to New Jersey’s 12 Congressional Districts. For ZIP codes in more than one Congressional District, the relevant IRS data were weighted using 2010 US Census population percentages, excluding ZIP codes with populations of less than 950.

[4] Government Finance Officers Association, Impact of Eliminating the State and Local Tax Deduction (Updated with 2015 IRS Data), 2017.

[5] New Jersey Policy Perspective, Fast Facts: New Jersey Third Hardest Hit State Under House Tax Proposal, November 2017.

[6] Institute on Taxation and Economic Policy, Flawed Data from House Leadership Attempts to Hide Tax Hikes Under Proposal, November 2017.

[7] NJPP analysis of New Jersey Department of Community Affairs, 2016 Property Tax Tables. Available at http://www.nj.gov/dca/divisions/dlgs/resources/property_tax.html

Poll: Most New Jerseyans Want Bold Solutions on State Taxes

Posted on by Jon Whiten

Most Garden State voters support bold solutions to fix the state’s broken tax code and boost public investments, according to a new poll commissioned by New Jersey Policy Perspective (NJPP). There is strong, bipartisan support for raising income taxes on the wealthiest 5 percent and for restoring the estate tax for millionaires, and there is majority support for rolling back the recent reduction in the state sales tax, which 60 percent of voters say has not helped them at all.

The three tax reforms included in the NJPP-commissioned poll represent over $2 billion in new revenue that New Jersey desperately needs to meet its obligations, maintain essential services and make targeted investments that can boost opportunity and grow the state’s economy, and they are crucial components of NJPP’s broader proactive tax reform agenda.

This polling confirms what we’ve heard as we’ve traveled the state this year to discuss the crucial issues facing New Jersey. Voters are willing to support tax increases – even on themselves – to create a stronger, fairer economy and fix the Garden State’s financial crisis.

Key findings:

  • Strong majorities believe that the state’s wealthiest 5 percent of households and large corporations are paying “too little” in taxes (69 and 66 percent, respectively).
  • Three-quarters of New Jersey voters (75 percent) support raising income taxes on the top 5 percent of households – including 76 percent of independents and 57 percent of Republicans.
  • Over 60 percent of New Jersey voters (62 percent) support restoring the state estate tax on heirs inheriting $1 million or more – including 57 percent of independents and 52 percent of Republicans.
  • A majority of New Jersey voters (53 percent) support rolling back the 2016 cut in the state sales tax – including 54 percent of Republicans.
  • Three-quarters of New Jersey voters (75 percent) support raising $2.5 billion in new revenue by increasing taxes mostly on the wealthy and large corporations.

As the Governor-elect and the new legislature chart a course for greater economic justice in New Jersey, they must be bold. The old playbook – pursuing a patchwork of modest tax fixes here and there in order to limp through a crisis – will not be enough to put our state back on the right track.

The poll of 750 likely 2017 New Jersey voters, conducted by Anzalone Liszt Grove Research, was conducted September 27-October 3 using professional interviewers. The full poll results can be viewed here: http://www.njpp.org/wp-content/uploads/2017/11/NJPP-ALG-poll-results-fall-2017.pdf

Related NJPP reports:

New Jersey Third Hardest Hit State Under House Tax Proposal

Posted on by Jon Whiten

To read a PDF version of this report, click here.

Once the tax cut proposal unveiled last week by Republicans in the House of Representatives[1] is fully phased in, New Jersey’s wealthiest 1 percent of taxpayers would receive an average $25,100 tax break each year while more than 1 in 4 Garden State taxpayers (27 percent) would pay an average of $2,200 more in a year in federal taxes.[2] (Unless otherwise noted, all data in this Fast Facts is on the impact in the year 2027, once the plan is fully phased in.)

The wealthiest New Jerseyans’ share of the state’s tax cuts would grow over time due to phase-ins of breaks that mostly benefit the rich and the eventual elimination or erosion in value of provisions that benefit low- and middle-income taxpayers. For example, after five years, the bill eliminates a $300 dependent credit that benefits low- and middle-income families while fully repealing the estate tax in year six for the few very large estates subject to the tax.

In all, the wealthiest 5 percent of New Jerseyans – those with annual incomes over $440,000 a year – would receive two-thirds (67 percent) of the tax cut coming to the state by 2027, while the bottom 60 percent (everyone earning less than $111,000 a year) would get just 28 percent.

More than 1 in 4 New Jerseyans would face a tax hike by 2027 in large part because the House proposal would end Americans’ ability to deduct state/local income or sales taxes paid while capping the amount of property taxes one could deduct at $10,000. While the latter provision is being pitched as a “compromise” to win over reluctant lawmakers from New Jersey and other similar states, nationally just 1 in 13 households would see any benefit from this change.[3]

A total of 1.8 million New Jersey households deduct a cumulative $17 billion in state income or sales taxes from their federal taxes, while 1.6 million New Jersey households deduct a cumulative $14.9 billion in local property taxes.[4] New Jersey’s average residential property taxes are $8,549 a year, and 147 of New Jersey’s 565 municipalities (26 percent) have average residential property tax bills of over $10,000 a year.[5]

What’s more, this analysis of the “winners and losers” under the House proposal doesn’t take into account the impact of likely budget cuts that would be paired with these tax breaks. After all, the tax proposal remains incredibly expensive – Congress’ Joint Committee on Taxation estimates it would cost $1.5 trillion over a decade.[6] If the $1.5 trillion in tax cuts were eventually paid for through the spending cuts on entitlements and federal programs promised in recent GOP budget proposals, it’s clear that any modest tax cut for low-income or middle-class New Jerseyans would be more than wiped out. (An analysis of the earlier tax framework that took program cuts into effect found the “vast majority of Americans” would lose – even if they took home small tax cuts.[7])

 

 

Endnotes

[1] H.R.1, The “Tax Cuts And Jobs Act,” https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf

[2] Institute on Taxation and Economic Policy Microsimulation Tax Model, November 2017. Full dataset available at https://itep.org/housetaxplan/

[3] Institute on Taxation and Economic Policy, House Plan Slashes SALT Deductions by 88%, Even with $10,000 Property Tax Deduction, November 2017. https://itep.org/house-plan-slashes-salt-deductions-by-88-even-with-10000-property-tax-deduction/

[4] New Jersey Policy Perspective, Fast Facts: Millions of New Jerseyans Deduct Billions in State & Local Taxes Each Year, November 2017. https://www.njpp.org/budget/fast-facts-millions-of-new-jerseyans-deduct-billions-in-state-local-taxes-each-year

[5] NJPP analysis of New Jersey Department of Community Affairs, 2016 Property Tax Tables. Available at http://www.nj.gov/dca/divisions/dlgs/resources/property_tax.html

[6] The Joint Committee on Taxation, Distribution Effects Of The Chairman’s Amendment In The Nature Of A Substitute To H.R.1, The “Tax Cuts And Jobs Act,” November 2017. Available at https://www.jct.gov/publications.html

[7] Center on Budget and Policy Priorities, Vast Majority of Americans Would Likely Lose From Senate GOP’s $1.5 Trillion in Tax Cuts, Once They’re Paid For, October 2017. https://www.cbpp.org/research/federal-tax/vast-majority-of-americans-would-likely-lose-from-senate-gops-15-trillion-in

Millions of New Jerseyans Deduct Billions in State and Local Taxes Each Year

Posted on by Jon Whiten

To read a PDF version of this report, click here.

As Republican lawmakers in Congress move forward with their tax proposal, much attention has been paid to the fate of state and local tax deductions, which allow taxpayers who itemize deductions on their federal income taxes to deduct state and local property taxes, and either state and local income taxes or general sales taxes.

Eliminating these deductions would make it harder for states like New Jersey to raise enough revenue to provide essential services and make public investments that benefit all residents. That’s because, with these deductions, higher-income filers are more willing to support state and local taxes – particularly ones, like New Jersey’s personal income tax, that are levied in a progressive manner.

What’s more, the GOP tax plan isn’t targeting these deductions in a vacuum. Instead, lawmakers are attempting to end this deduction to free up revenue for significant tax cuts for the wealthiest Americans. They are, in essence, targeting a tax feature that mostly benefits upper-income families in order to push through tax cuts that overwhelmingly benefit the extremely wealthy – swapping out a slightly regressive feature for an extremely regressive change to the tax code.[1]

These deductions are widely used in high-cost, high-tax states like New Jersey. In all, 41 percent of Garden States households file using these deductions – the third highest share of all states, after Maryland and Connecticut. These households deduct a total of $32.2 billion in state and local taxes each year, the third highest dollar amount after California and New York.[2]

The latest proposal reportedly on the table would scrap the income and sales tax deductions while preserving the property tax deduction. This would still leave many New Jerseyans high and dry, and the larger tax and budget scheme it’s part of would still have damaging long-term effects on New Jerseyans of all stripes – except the incredibly wealthy.[3]

40 percent of New Jersey households deduct income or sales taxes

A total of 1.8 million New Jersey households deduct a cumulative $17 billion in state income or sales taxes from their federal taxes. At 40 percent of all taxpaying households, New Jersey ranks third highest in the nation, behind Maryland (45 percent) and Connecticut (41 percent). Of these 1,775,740 households, the overwhelming majority (1,525,000) take the income tax deduction; the remaining 250,740 take the sales tax deduction (taxpayers can’t take both).

About half of New Jersey households taking income or sales tax deduction have five-figure incomes

While a greater share of higher-income New Jerseyans deduct state income and sales taxes, the deduction is not exclusively taken by the state’s wealthiest families. In fact, 48 percent of New Jersey households that deduct these taxes have annual incomes under $100,000 (19 percent under $50,000 and 29 percent between $50,000 and $100,000). An additional 34 percent have an annual income between $100,000 and $200,000, while 16 percent have annual incomes between $200,000 and $1 million. Just 1 percent of these households have annual incomes over $1 million.

Tens of thousands of households in every county deduct income or sales taxes

The families who deduct state income or sales taxes from their federal taxes live all over New Jersey. Bergen County has the highest number of such households, at 212,000, while sparsely populated Salem County has the lowest, at 11,000. But the deduction is used by the highest share of households in Hunterdon County (55 percent of all tax filers), while it is used by the lowest share in Cumberland County (27 percent). In terms of dollar amount, Bergen County is home to the highest figure ($2.9 billion) while Salem County is lowest, at $49 million.

36 percent of New Jersey households deduct property taxes

A total of 1.6 million New Jersey households deduct a cumulative $14.9 billion in local property taxes from their federal taxes. At 36 percent of all taxpaying households, New Jersey ranks third highest in the nation, behind Connecticut (37 percent) and Maryland (which at 36.4 percent just barely edges out the Garden State’s 35.7 percent). (Households can take the property tax deduction in addition to the income or sales tax deduction, so many of these 1.6 million taxpayers are from the same pool of the 1.8 million families taxing those deductions.)

Nearly half of New Jersey households taking property tax deduction have five-figure incomes

While a greater share of higher-income New Jerseyans deduct local property taxes, the deduction is not exclusively taken by the state’s wealthiest families. In fact, 46 percent of New Jersey households that deduct these taxes have annual incomes under $100,000 (18 percent under $50,000 and 28 percent between $50,000 and $100,000). An additional 35 percent have an annual income between $100,000 and $200,000, while 17 percent have annual incomes between $200,000 and $1 million. Just 1 percent of these households have annual incomes over $1 million.

Tens of thousands of households in every county deduct property taxes

The families who deduct local property taxes from their federal taxes live all over New Jersey. Bergen County has the highest number of such households, at 184,000, while sparsely populated Salem County has the lowest, at 11,000. But the deduction is used by the highest share of households in Hunterdon County (53 percent of all tax filers), while it is used by the lowest share in Hudson County (17 percent). In terms of dollar amount, Bergen County is home to the highest figure ($2.2 billion) while Salem County is lowest, at $64 million.

Endnotes

[1] For more, see Center on Budget and Policy Priorities, Eliminating State and Local Tax Deduction to Pay for Tax Cuts for Wealthy a Bad Deal for Most Americans, October 2017.

[2] All data on the use of these deductions in this Fast Facts are from a NJPP analysis of U.S. Internal Revenue Service Statistics of Income data from tax year 2015.

[3] See Institute on Taxation and Economic Policy, Benefits of GOP-Trump Framework Tilted Toward the Richest Taxpayers in Each State, October 2017 (https://itep.org/trumpgopplan/) and Center on Budget and Policy Priorities, House GOP Tax Plan Likely to Contain Same Basic Flaws as Earlier Versions of the Plan, October 2017 (https://www.cbpp.org/research/federal-tax/house-gop-tax-plan-likely-to-contain-same-basic-flaws-as-earlier-versions-of)

 

 

Vote ‘Yes’ on Ballot Question 1

Posted on by Gordon MacInnes

This op-ed was published in the October 31 edition of NJ Spotlight.

The book a friend mentioned as riveting was published in 1958. Your 4-year-old loves stories and playing with her peers, but you’re new to the neighborhood. You keep hearing about how helpful yoga is, but have never tried it. The story is your great uncle fought in the Korean War – or did he? How did Elijah Stoner build that nice house downtown in 1820? Your kid wants to learn chess, but you’re no good at it. Or how about a safe, fun place to celebrate Halloween?

To find satisfaction on these and thousands of other quandaries, New Jerseyans made about 45 million trips to their local public libraries last year. In fact, every single day over 120,000 people visit a New Jersey library. Some went to check out books or facts; others to look for jobs and better economic opportunities; others to hear lectures or discuss books; and still others to take part in civic community-building. The range of services and events across the state is vast. Yet despite their importance to our communities, New Jersey’s libraries are in need of a little TLC.

That’s where you come in. On November 7, you can help update and modernize the state’s public libraries by voting “yes” on Question 1. If approved, the Library Construction Bond Referendum will authorize $125 million to fund renovation, modernization and construction projects at libraries across the state. The dollars would go to local libraries in the form of grants that will provide 50 percent of the funds required for construction and renovation projects, with the balance being matched by the libraries themselves.

Public libraries are community-gathering places that have transformed themselves to accommodate a changing society and electronic communications. Yes, you can still check out a book (or a CD), ask for guidance from the reference librarian, hold a meeting, attend a discussion group or story hour or hear from a local author, but public libraries have adapted to new demands and needs. Some libraries offer computer classes in Spanish and ESL classes to assist our growing Latinx population. What has not changed is the uniform courtesy and helpfulness of librarians or the quiet, welcoming atmosphere.

However, the transformation is not complete and much more needs to be done. There are 420 public libraries in New Jersey, ranging from 4 in Salem and Cumberland counties to 62 in Bergen. Most offer hours to match residents’ busy schedules, but many have had to reduce hours because of municipal and county budget cuts (one branch library in Cape May is now open only 4 hours per week; Princeton’s is open 75 hours).

In many libraries wifi and high-speed internet connections are available, but half of New Jersey’s libraries need to upgrade their electrical systems to accommodate better computer access. Many municipal libraries were built early in the 20th century and 40 percent are not yet accessible to the disabled under the Americans with Disabilities Act. To be accessible to all, some older libraries need to install elevators and make interior spaces more accessible. And a New Jersey Library Association survey this year found that about half of libraries have outgrown existing space and need help to expand.

Approval of Question 1 would help with all of these improvements, helping to update and enhance public space and buildings; make libraries more accessible and spur innovation.

In this increasingly contentious atmosphere, libraries remain one of the last vestiges of the public sphere. The importance of New Jersey’s libraries is not in doubt. But their future is. Let’s all take a step to ensure our libraries have a better chance at continuing to grow with our state and our society by voting “yes” on Question 1.

Trump Budget & Tax Plan Would Hit New Jersey Hard

Posted on by Sheila Reynertson

This op-ed appeared in the Sunday, October 29 edition of the Asbury Park Press.

This week the U.S. House of Representatives passed a budget resolution that brings Congress one step closer to enacting $1.5 trillion in unpaid-for tax cuts largely for the wealthy and profitable corporations while making low- and middle-income New Jerseyans foot the bill. The budget sets up a fast-track, partisan process for passing the Republican tax plan with just 51 votes, the same process they used to try to force through the repeal of the Affordable Care Act.

The bright side is that 11 of New Jersey’s 12 House members voted against this dangerous budget plan. Those leaders in D.C. – particularly GOP Reps. Leonard Lance, Frank LoBiondo and Chris Smith – should be applauded for putting the people of New Jersey first with their “no” votes, and should be urged to remain steadfastly opposed to a budget and tax plan that is skewed to the very wealthy, raises taxes on many New Jerseyans and sets up deep and damaging cuts to critical public services and investments on which all of us rely. (While Rep. Tom MacArthur voted “no” this week, he did help set the process in motion with a “yes” vote on the budget resolution earlier this month.)

Rep. Rodney Frelinghuysen, on the other hand, was the lone “yes” vote from New Jersey, thinking perhaps that the “tax reform” plan pitched by President Trump and his allies in Congress will help working families across the country. But New Jersey families have a right to ask him: Really? How so?

The plan is clearly skewed to benefit a small group of wealthy taxpayers, shareholders and profitable corporations, with very little left to benefit the middle class and everyone else. And the massive loss in revenue caused by these tax cuts would blow a hole in the nation’s finances to the tune of $234 billion as soon as next year, according to the Tax Policy Institute.

Anti-tax activists claim these huge cuts for the top will unleash a torrent of economic growth, thereby ensuring no real “cost” from the tax breaks – and no real pain for the American people. But history clearly tells another story.

Trickle-down economics has been disproven and debunked again and again – mostly recently in Kansas, which retreated in defeat after generous tax cuts tilted to businesses and the wealthy failed to deliver promised widespread prosperity to the Sunflower State. As the Kansas experiment vividly shows, tax cuts like these don’t lead to growth – they only lead to dried up budgets and cuts to education, health care and other vital programs that help working families.

The Trump-GOP plan, in short, is rooted in magical thinking. But it’s worse than a fairytale: for many New Jerseyans, it’d be more like a nightmare.

New Jersey’s wealthiest families would be the only real winners under this plan. A whopping 82 percent of the plan’s tax cuts would got to New Jersey’s richest 1 percent, with an average tax cut of approximately $74,000, according to the Institute on Taxation and Economic Policy. Meanwhile, about one in four New Jerseyans would face a tax hike, paying an average $2,400 more each year.

Whatever meager tax break is given to low-income and middle-income New Jerseyans would inevitably be wiped out by cuts to public services and programs that those families rely on like health care, education, food assistance and much more. To be clear, the very programs that help everyday New Jerseyans make ends meet and move up the ladder of opportunity are the currency with which the Trump administration and Congressional leaders hope to pay for huge tax cuts for those who are already doing quite well.

New Jersey taxpayers across the state would be hit especially hard if the widely used deduction for state and local taxes is eliminated. It would especially blow a massive hole in the wallets of New Jersey middle-class taxpayers.This proposal is not tax “reform.” It’s a giveaway to those who already benefit the most in this rigged economy: the very wealthy and large, profitable corporations. And pairing these tax breaks with deep cuts to economic security programs would only make today’s runaway inequality worse.

Real tax reform would help New Jersey’s low- and middle-income families that have been hit hard by the state’s sluggish economic recovery. Real tax reform would ensure that we have the resources to invest in the things that are proven drivers of a strong economy like education, health care and infrastructure. Real tax reform would stop providing special treatment for the wealthy and start investing in the assets that only the government can make in the coming decades to meet the public’s needs.

Unlikely Allies Oppose Mega-Subsidy for Amazon

Posted on by NJPP Staff

New Jersey Policy Perspective joined forces yesterday with Americans for Prosperity-New Jersey to oppose the state’s main bid for Amazon’s new headquarters: a bid for the city of Newark fueled by an estimated $7 billion in tax breaks. NJPP and AFP-NJ were joined by Assembly Deputy Speaker John Wisniewski and the American Legislative Exchange Council, making for a case of strange bedfellows in the State House.

“The groups convening today’s press conference don’t agree on much when it comes to tax and economic policy,” NJPP Vice President Jon Whiten said, “but we are in absolute agreement that offering $7 billion in tax breaks to a single corporation is terrible policy and a big step in the wrong direction.”

More from the press event, from NJTV News:

New Jersey’s Tax Code is Broken. Let’s Start Fixing It.

Posted on by Jon Whiten

This op-ed appeared in the October 13, 2017 edition of the Star-Ledger, the Times of Trenton and the South Jersey Times. 

With taxes taking center stage in this year’s race for governor, it’s important to take a few steps back and think about the role that taxes play in building a strong state and future. You see, taxes aren’t an end of their own – they are, in fact, a means to an end: shared investments in our shared priorities.

And make no mistake: today New Jersey simply does not have the resources to ensure that the state is meeting the needs of all its residents while laying the groundwork for a thriving economy.

This is not an accident. Decades of anti-tax rhetoric from lobbyists for the wealthy and well-connected have led New Jersey policymakers to cut taxes over and over again – mostly for the state’s most well-heeled families, large corporations and wealthy heirs – all in the name of making the economy “competitive.” But over those same decades, our economy has stagnated, in large part due to the state’s inability to maintain its core economic assets (take NJ Transit, for instance) and its accelerating creep toward insolvency.

And these choices have made New Jersey’s tax code less fair by shifting the overall tax burden to middle-class, working-class and low-income families.

In 2018, New Jersey’s leaders must begin making better choices. Here’s how they can start fixing our broken tax code:

Make the income tax fairer and more effective

In late 2009, the lame duck legislature allowed New Jersey’s temporary income tax surcharge on the state’s wealthiest households to expire. Since then, the governor has vetoed numerous attempts by the legislature to make the Garden State’s income tax more equitable.

The result: the state has subsequently forfeited up to $7 billion in revenue, further enriching the state’s most well-off while cutting property tax relief for middle-class homeowners, increasing public transit fares and raising tuitions at the state’s public colleges to unaffordable levels.

Other states have not made these mistakes.

In fact, states like California, Minnesota, Maine and New York have enacted or extended substantial income tax increases on their wealthiest households, generating tens of billions of dollars to pay for schools, health care and more – and helping to foster strong economic growth.

New Jersey’s policymakers should add four new brackets to the state income tax code. This change would raise over $1 billion a year to invest in schools, property tax relief or other targeted investments, while only raising taxes for the wealthiest 5 percent of New Jersey families.

Restore fair and adequate taxation of inherited wealth

Last year, New Jersey’s political leaders delivered a huge gift to the heirs of the state’s wealthiest families – and a blow to everyone else – by eliminating the state’s estate tax. This change gives a few thousand wealthy heirs a huge tax break, while draining the state of over $500 million a year in lost revenue – dollars vitally needed to support investments with widespread benefits, like infrastructure and higher education.

Policymakers should bring the estate tax back – but with a higher threshold than before. At $1 million or even $2 million, the tax would still raise a substantial amount of revenue while affecting even fewer – and even wealthier – New Jerseyans.

Close corporate tax loopholes

New Jersey currently offers a tax loophole to large multistate corporations – one that hurts New Jersey-based businesses and costs the state money. Through this loophole, large multistate corporations can – on paper – shift profits they make in New Jersey to other states that have lower tax rates or no corporate taxation at all. Corporations often do this by creating “subsidiaries” that exist only for tax purposes.

Other states – 25, to be exact – have combated this charade by adopting a practice called “combined reporting.” And New Jersey should join them. Limiting the ability of profitable multistate corporations to use accounting tricks to dodge state taxes would help level the playing field for the state’s small and local businesses – and raise up to an additional $290 million a year to help the state pay its bills and make key investments.

Roll back the largely invisible 2016 sales tax cut

The tiny, undetectable sales tax cut approved by lawmakers last year will help the wealthiest New Jerseyans the most, save the average Garden State family less than $2 a week but do enormous, lasting damage to the state’s finances with an annual price tag of more than $600 million. This gimmicky tax policy should be reversed.

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