Topic Category: Tax and Budget

Four Practical Ways for NJ to Raise New Revenue

Posted on by Jon Whiten

This op-ed appeared in the April 6, 2017 edition of NJ Spotlight.

This spring at public hearings, lawmakers on New Jersey’s budget committees listened to a long line of advocates from across the state with a long list of underfunded priorities. The needs, the concerns, and the spending asks of most were not too different from last year. Or the year before. Or the year before that.

It’s time to break this pattern. Instead of the annual ritual of scores of groups with important needs fighting for tiny scraps of an ever-shrinking pie of funding, New Jersey needs to take a serious look at making that pie larger.

And make no mistake: the pie has indeed been shrinking. Tax cuts for businesses and the state’s wealthiest families enacted toward the start of this decade have cost New Jersey between $7 billion and $10 billion in revenue since. And the ill-advised tax cuts passed last year will only serve to shrink the pie even more, to the tune of over $1 billion a year by the time 2019 rolls around. It’s no wonder the state faces chronic revenue shortfalls like the $436 million hole the Office of Legislative Services is estimating for the next 15 months.

And the pie will likely get even smaller this year, thanks to the slash-and-burn budget policies of the Trump administration. The president’s extreme proposal effectively ends the federal-state partnership. The pressure on the state to pick up the tab will be enormous, but covering even a sliver of the lost funds will be impossible without new revenue. The state already can’t meet its current obligations, let alone fill in the holes dug by a radical Trump budget.

Now is the time for action — not next year when New Jersey will be in an even deeper hole. Now is the time for lawmakers to raise new revenue.

When doing so, it’s important to focus on equity: Does the state ensure wealthy individuals and corporations don’t get disproportionate breaks and advantages compared with low-income and middle-class households? The four practical policy solutions below surely pass that test, and could raise well over $2 billion a year in new revenue for New Jersey:

First, increase income tax rates on the top 5 percent of highest-income New Jersey households. Modeled on California’s successful 2012 tax increases —which have so far generated more than $35 billion for key investments in higher education, healthcare, and restoring that state’s fiscal solvency — our income tax proposal would add four new brackets to our state income tax code, and generate over $1 billion a year in new revenue.

Next, close a corporate tax loophole that allows multistate corporations to pay lower taxes than our own small businesses by shifting profits made in New Jersey to subsidiaries in no- or low-tax states. Doing so would raise up to $290 million in new revenue in each year.

Third, roll back last year’s sales-tax cut. It’s no secret that most New Jerseyans will hardly notice the cut. For example, families in the middle of the income scale will save an average of $1.65 a week. Yet the harm on all of us will be profound, with the state set to lose $600 million a year or more each year once the cut is fully phased in.

And last but not least, restore fair and adequate taxation of inherited wealth. Last year, New Jersey delivered a huge gift to the heirs of the state’s wealthiest families — and a blow to everyone else — by eliminating the estate tax. This gives a few thousand wealthy heirs a huge tax break while draining the state of about $500 million a year. New Jersey ought to either restore the estate tax by bringing it back with a slightly higher threshold or expand the related transfer-inheritance tax to affect direct heirs (such as children and grandchildren) while raising the threshold at which this tax kicks in to protect lower- and middle-income heirs. Restoring fair and adequate taxation of inherited wealth could generate anywhere from $200 million to $500 million in revenue each year.

Beyond these four policy proposals, there are plenty of other solutions that ought to be on lawmakers’ lists. Here are a few: applying the sales tax to services used most heavily by families with greater means (like interior designers, accountants, or bookkeepers); legalizing, regulating, and taxing marijuana; and working with other states to close the “carried interest” loophole at the state level — or, when the time comes, to “repatriate” big federal tax cuts for wealthy New Jerseyans.

New Jersey’s lawmakers have two paths from which to choose.

Inaction means that next year’s budget hearings will be a reprise, with many of the same advocates fighting for even fewer and smaller scraps from an ever-shrinking pie of resources.

The smarter path — one of tax fairness and budget adequacy — means that New Jersey can finally start to collect the revenues it needs to provide essential services, help those who are struggling, and invest in the building blocks of a strong economy. The results might not be automatic, or immediate — but make no mistake, there will be results: a stronger, fairer, and better state.

What ITIN Filers Should Know Before Filing Their Taxes

Posted on by Erika J Nava

One of the biggest myths about undocumented immigrants is that they do not pay taxes. In reality, they do – and quite a lot. In New Jersey, undocumented immigrants pay about $587 million a year in state and local taxes, mostly through sales and property taxes – but also through income taxes.

While our undocumented neighbors pay sales or property taxes much in the same way we do – when they purchase a product or pay their rent or mortgage – for income taxes, it’s a bit different. Since they lack the required Social Security number, all undocumented residents who are filing income taxes use what’s called an Individual Taxpayer Identification Number (ITIN), which is provided by the Internal Revenue Service (IRS).

Starting this tax season, some taxpayers will be required to renew their ITIN number before the IRS can mail them their refund. Here’s why, and what ITIN taxpayers need to know.

Under legislation passed in 2015, ITIN taxpayers who either haven’t filed a tax return for the last three years or who received their ITIN before 2013, are required to renew their numbers. (The latter category is required to renew their ITINs on a rolling schedule – for more details, see the IRS’s explanation.)

It’s estimated that about half of undocumented immigrants use ITIN numbers to file taxes. While precise numbers of total ITIN filer in New Jersey are not available, we do know that there are nearly 4,000 New Jerseyans who have ITIN numbers expiring this tax season; the city and county of Passaic are both home to the highest numbers (368 and 621, respectively).

To renew an ITIN, an undocumented worker must complete and submit the W-7 form and check the “renew an existing ITIN” box. The most important part is to include the documents that prove your identity. The documents must be verified by either presenting them to the IRS national office, having an IRS-certified agent approve them or via an appointment at one of New Jersey’s eight Taxpayer Assistance Centers.

Remember: ITINs can’t be used in place of a Social Security number to work legally in the United States, and can’t be used to apply for public benefits or the Earned Income Tax Credit. What’s more, undocumented immigrants aren’t the only people who use ITINs. Nonresidents who receive taxable income in the U.S., foreign students and dependents of U.S. citizens who don’t have Social Security numbers are among the other types of people who use ITINs.

In today’s hostile climate toward immigrants, there are distinct pros and cons to using an ITIN to file taxes. There are very real and growing concerns that current protections of ITIN holders’ private information could be erased by Congress or the administration. However, filing taxes proves one’s economic presence, establishes a record of one’s work history and demonstrates good moral character by complying with American tax law.

Blueprint for Economic Justice & Shared Prosperity

Posted on by NJPP Staff

From the President

For more than 20 years, New Jersey has been on a downward economic and financial slide. Our middle class is shrinking. Poverty is rising. The state government is effectively bankrupt. We’re dangerously close to hitting rock bottom.

The next governor is New Jersey’s last, best chance to slow the state’s collapse, restore its stable financial foundation and rebuild its enterprising, job-creating, wealth-producing economy.

How did we get here?

The Jersey Slide began with a familiar false premise: cut taxes, and the savings will stimulate economic activity and increase state revenues. Hence a 30 percent cut in income tax rates in 1994, which produced immediate declines in state support for property tax relief and set off a two-decade chain reaction of gimmicks to hide the damage.

Gimmicks like slashing the state’s payments for public employees’ pensions and retiree health benefits enough to make up for revenues sacrificed to the tax cuts. Like granting local governments a pension payment “holiday” to keep property taxes from spiking.

And, in a damning blow, borrowing almost $3 billion to cover the state’s share of pension costs for two or three years – sticking unknowing future taxpayers with the very large repayment bill.

Along the way, a bipartisan cast of governors, legislators and justices ignored the urgent warnings of financial experts, and violated state constitutional protections intended to safeguard against precisely these types of abuses. Because the constitution is clear: you can’t spend money in the annual budget that isn’t raised in the same year, and you can’t borrow money long term without voter approval.

Now the chickens are coming home to roost. The games and gimmicks must stop. It’s time for truth telling, and courageous action.

I understand the challenge. I’ve run for office five times and participated in numerous campaigns. Not once has someone come up and asked: “Gee, my taxes are pretty low, can you do something to raise them?”

But people’s concerns about the taxes they pay often mask concerns about how their taxes are spent:

• “Potholes cost me $800 for new tires.”
• “I thought public colleges were supposed to be affordable.”
• “The high school cut my kid’s band class.”
• “The district said it’s not safe for my kid to drink water from the tap.”

These complaints lay bare a fact that’s been too-long neglected by our political leadership: Residents want New Jersey’s enviable assets to be properly maintained. People understand that investments in the assets we all share are paid for by the taxes we all pay – taxes that should be levied in a fair and equitable way.

The idea that the state needs to protect and invest in its assets is what drove New Jersey’s thriving economy from the 1960s into the early ‘90s. Those were the years when the state invested strategically in public transportation; in public colleges and universities; in preserving open space; in protecting the environment; and beyond. The state’s robust opportunities and vibrant communities attracted striving immigrants from around the world, who in turn fostered further economic growth. The result: New Jersey transformed itself from a fading industrial state into an enterprising, prosperous and stable state with a robust middle class and a plentiful opportunity.

That was then. The picture is starkly different now. After ten credit downgrades in seven years, New Jersey ranks 49th among the 50 states for creditworthiness. Our once robust biotech and pharmaceutical industry is being lured to states that are accelerating – not slashing – public investments in innovation centers like university hubs. Inequality is at historic highs. In this high-cost state, which never bounced back from the Great Recession, New Jersey’s working families are finding it harder than ever to make ends meet and give their children opportunities to advance.

Here’s the good news: New Jersey still has enviable assets. And it’s not too late for new leadership to stop the state’s downward spiral. No candidate should promise that it’ll be easy or painless to restore New Jersey as an engine of enterprise and opportunity. Nor should anyone suggest that one term as governor or as a legislator will be sufficient.

But big ideas, carefully planned and plainly explained, are the starting point.

That is the work of New Jersey Policy Perspective, and specifically, this Blueprint.

– Gordon MacInnes, President

To read the Blueprint, click here.

Despite ‘Exodus’ Rhetoric, New Jersey’s Still Adding Millionaires

Posted on by Jon Whiten

millionaires growing 2016 update-01We hear it all the time: Hordes of wealthy New Jerseyans are packing up their Lexuses and heading to “friendlier” climates to avoid paying the Garden State’s relatively high income tax rates on the state’s most well-off families or its taxes on inherited wealth.

Yet time and time again, the facts clearly show this isn’t the case, and there is no such “exodus” of wealthy New Jerseyans.

The latest data point to confirm New Jersey’s ability to attract and retain well-off families comes from Phoenix Marketing International’s most recent annual Wealth & Affluent Monitor, which finds that the Garden State now has the third highest share of millionaires in the country, behind only Maryland and Connecticut.

New Jersey climbed to the Number Three spot in 2016 from Number Four in 2015, with the share of millionaires increasing to 7.4 percent from 7.2 percent and the number of millionaires rising to 242,957 from 237,064.

Since 2006, the number of millionaires in New Jersey has increased by more than 35,000 (or 17 percent) while the share of millionaires has risen by 14 percent.

2018 Budget Preview: The Legacy of the Christie Years

Posted on by Sheila Reynertson

When Gov. Christie took office in 2010, he had his work cut out for him. New Jersey’s economy was in the depths of the Great Recession, throwing an already fragile state budget into deeper crisis. In his first budget address, he promised to fix the state’s budget crisis, revamp the public pension system and reduce overall state spending without using “gimmicks or band-aids.” But as we look toward the governor’s final budget of his eight-year tenure, it’s clear that New Jersey’s financial crisis persists.

A  weak economic recovery, on top of big tax cuts and breaks that have helped lead to chronic revenue shortfalls, and ongoing battles over pension obligations, have led the state’s credit rating to be downgraded a record 10 times during Gov. Christie’s tenure. Despite a huge increase in corporate tax breaks, New Jersey has yet to recover jobs at a rate anywhere near those of neighboring states or the nation as whole. New Jersey has the eighth slowest post-Recession revenue growth rate of the states and only nine days of operating funds on reserve – the 5th lowest of the states – putting the state in serious jeopardy should another recession or disastrous storm sink the economy.

As he prepares to present his final state budget this month, the list of enormous and unresolved issues facing New Jersey’s finances – and its prosperity – is as varied as it is daunting.

After uneven reform efforts, New Jersey’s pension system for retired public employees is now the most underfunded in the country. Despite a jump in annual payment size, contributions are actually 40 percent of what is recommended by actuaries to keep up with the ballooning obligations. Add to this crisis the state’s losing battle to adequately fund health care benefits for public employees. The pay-as-you-go method coupled with rising health care costs continue to cripple the state budget. New Jersey has underfunded state-mandated school aid for the past seven years. Now Gov. Christie wants to gut the school funding formula to give residents in wealthier districts a  property tax break.

Meanwhile, New Jerseyans continue to pay the nation’s highest property tax bills. This year the average homeowner paid $8,459 – 2.2 percent higher than last year’s rate despite a 2 percent cap implemented by Gov. Christie. The average residential property tax bill was $7,281 in 2009 representing a 16 percent increase. At the same time, the number of New Jerseyans living below the federal poverty line has grown by 13 percent from 2009 to 2015. Today one in four New Jerseyans live in true poverty. Over one in ten New Jersey households did not have enough money to purchase food at some point last year.

Who wins, who loses

During Gov. Christie’s tenure, corporations and wealthy households have prospered the most, while those in the middle and those struggling to get by in the face of rising costs of living were largely left behind. The name of the economic-development game has largely been to offer tax subsidies to encourage businesses to relocate or stay in New Jersey.

Over the past 6 years, New Jersey has approved over $7 billion in ineffective tax subsidies to corporations – on top of $3 billion worth of business tax cuts it’s doled out.. Touted as a job-creating stimulus, these tax breaks have done little to boost the economy. New Jersey would need to add 120,000 jobs each year for the next three years just to get back to pre-recession levels and employ a growing population. But this past year, just 21,4000 jobs were added representing the 7th slowest job growth among the states since the start of the recession.

Over three-fourths of total income gained between 2010 and 2013 went to the top 35 percent of households. New Jersey now has the 7th highest level of income inequality in the country. That trend is sure to worsen as New Jersey phases out the estate tax, one of the best tools for reducing inequality and building broadly shared prosperity.

Revenue growth still unsteady

New Jersey’s tax collections have grown this fiscal year but at a slower pace than anticipated. If the lower growth rate continues, revenue may fall considerably short of what Office of Legislative Services (OLS) says is needed for the remaining months of this fiscal year.

If the current growth rate of 2.3 percent were to remain steady, the state budget could be over $950 million short in revenue.  According to the latest figures from the OLS, the growth rate would need to be more than twice that rate to meet current costs and recover from the enormous tax cuts signed into law last fall. This lower-than-expected trend has plagued New Jersey since the Great Recession.

Overall, New Jersey’s tax collections continue to struggle to bounce back to pre-Recession levels. State tax collections in the second quarter of 2016 were still 10.9 percent lower than its peak in the fourth quarter of 2007. In fact, New Jersey is surrounded on all sides by states whose tax collections have long since recovered and grown. New York’s tax revenue, for example, was 12.7 percent higher in Q2 2016 than at its peak in Q3 2008. Pennsylvania’s tax revenue was 3.2 percent higher in Q2 2016 than at its peak in Q1 2008.

Given that revenue shortfalls continue to undermine the state’s ability to meet its obligations, the next budget is likely to resemble those from the last several years with expected underfunding in key areas including pension payments, school aid, tuition assistance for higher education and general assistance to families in need. Add to this strapped budget the loss of $675 million as a package of tax breaks begin to be phased in. That loss will increase to $1.4 billion by 2021. Some $350 million will no longer be diverted from the general fund to pay TTF debts, but in the long run, the state’s ability to adequately fund key obligations will be severely compromised due to these cuts.

Pension payments

Pension payments during Gov. Christie’s tenure may have been larger than those made by his predecessors, but they have been only a fraction of what is needed to keep the pension system from piling up even more debt.

After skipping a $3.1 billion payment in fiscal year 2011, Christie contributed $484 million in 2012, $1 billion in 2013 and $696 million in 2014. He then made a $892 million payment in fiscal year 2015 – nowhere near the $2.25 billion sought by the legislature. And the 2016 state’s contribution of $1.3 billion was also well below the $3.1 billion payment included in the legislature’s budget. For the fiscal year ending this June 30, the state’s contribution of $1.86 billion to the pension fund, which mirrors the Legislature’s contribution, will occur near the end of the fiscal year.

Recently, Gov. Christie announced a $650 million increase in state contributions to the pension fund boosting the total pension contribution for the 2018 fiscal year to approximately $2.51 billion in keeping with the state’s 10-year pension payment formula.

Higher education

New Jersey students and families continue to have a hard time affording the high cost of a college education, thanks in large part to sharply declining state support for public colleges and universities.

New Jersey has cut funding for higher education by 23 percent since 2008 when adjusted for inflation, a decrease of more than $2,250 per student and a deeper cut than the national average, according to a new report from the Center on Budget and Policy Priorities (CBPP). This is the 13th largest percentage decline, and 12th largest dollar decline, of the 50 states.

While many states are starting to reverse course and increase funding for higher education, New Jersey is going in the opposite direction. In fact, it is one of just 11 states where per-student funding fell from 2015 to 2016.

As a result of these cuts, the average tuition at a public, four-year college in New Jersey has increased by 17 percent, or $1,903, during this period. On top of these tuition increases, colleges and universities across the state have increased student fees, cut staff and faculty positions and offered fewer courses to save money. All this means that a degree takes much longer to attain, adding years of cost and debt.

Together, this means that most New Jersey’s families – already struggling with slow income gains if not reductions – are often paying more and incurring  higher levels of debt for a lower-quality education. These post-recession increases come on the heels of large increases in tuition and fees at New Jersey’s public, four-year colleges in the early 2000s.

Looking ahead

It took New Jersey decades to dig itself into this fiscal hole and no one governor is going to fix it, but without a doubt it has gotten steadily worse over the past eight years. But it didn’t have to be this way given the proven tools that could have been employed to dig our way out. Here are a few examples of big, bold tools that the next administration should consider to help move New Jersey toward a more stable and prosperous future.

One of the most responsible ways to create a path to financial sustainability is to ensure that corporations and the wealthy are paying their fair share in New Jersey. Closing tax loopholes is one way to do this. Expanding combined reporting in New Jersey would close corporate loopholes and help prevent multi-state corporations from artificially shifting profits out of state. This tax policy could raise up to $290 million in much-needed revenue each year to shore up underfunded investments like higher education and public transit.

New Jersey is currently experiencing income inequality the likes not seen since the Gilded Age. The top 5 percent of New Jersey’s households have average incomes more than 15 times greater than the bottom 20 percent. As income inequality continues to rise, New Jersey has an opportunity to reinstate tax rates and expand tax brackets on wealthy households that have far and away done better than families struggling to get by. By doing so, New Jersey could raise more than $1 billion more each year.

One of the most progressive and equitable taxes in New Jersey, the estate tax, was actually a growing source of revenue before it was eliminated last fall. Paid for by just 5 percent of New Jersey estates in any given year, this long-standing tax on inherited wealth is now being phased out, giving heirs an average tax break of $140,000 and costing New Jersey about $500 million a year – an amount that was projected to grow significantly each year despite the drumbeat myth that the wealthy were fleeing New Jersey in droves.

Bringing the estate tax back even with higher threshold could significantly steer New Jersey in the right direction again. For instance, reinstating the estate tax on estates worth $2 million or more, could recover three-quarters of the lost tax revenue while restoring responsible and fair taxation of inherited wealth. Moreover, New Jersey’s inheritance tax could be modified to ensure that wealthy heirs pay their fare share while ending the tax on modest inheritances of $500.

‘Relief’ Uneven for Families as Tax Cuts Start Going Into Effect

Posted on by Sheila Reynertson

It’s been three months since New Jersey’s gas tax went up in order to pay for critical investments in roads, bridges and public transit. The increase was long overdue – fuel taxes hadn’t been raised since 1990 – but that didn’t make it easier politically. In an attempt to soften the blow for New Jersey drivers, several new tax cuts have gone into effect. However, the bulk of these breaks will benefit New Jersey’s wealthiest families. And these tax cuts aren’t free – they’ll cost the state about $1.4 billion each year, at a time when New Jersey is already unable to pay its bills.

Let’s start with the good news. Yes, there’s good news.

Included among the tax breaks is a 17 percent increase in New Jersey’s earned income tax credit, providing, on average, an extra $116 at tax time to nearly 600,000 working families striving to get by in high-cost New Jersey. This added tax relief for low-income families is very timely, given the state’s rising poverty rates and a minimum wage that chronically fails the adequacy test. In fact, this EITC increase alone should ensure that the state’s poorest families – those earning under $45,000 a year – don’t pay the largest chunks of their incomes to the new gas taxes.

Unfortunately, lawmakers weren’t content to craft good policy for the state’s poor working families and call it day. In search of a “broad-based tax cut” and  to fix a mythical “outmigration” crisis, they also included gimmicky and unfair tax policies that have wealthy families clinking champagne glasses but leave the rest of us worried about our state’s capacity to create the kind of state we all want to live in.

The tax break to affect most New Jersey residents is the phase-in of a one-third percent drop in the state sales tax rate. This year’s tax cut means a savings of about 13 cents for every $100 spent. Next year it will be about a 40 cent savings. But to offset the expensive gas tax hike, one will need to spend $28,000 on taxable goods every year to match that hit at the gas pump. The more you buy, the more you’ll benefit from an unnoticeable sales tax cut. So families in the top 1 percent – with average annual incomes of $2.2 million – will see an average annual tax cut of $723, while those earning under $45,000 will get, on average, an annual tax cut of $46.50 – less than a buck a week.

And while it won’t really help most New Jersey families in any substantial way, the sales tax cut will sure cost the state a lot in lost revenue: over $600 million a year, to be precise. That is a direct hit to the state’s ability to adequately fund programs and services that benefit families and their communities.

The second-largest piece of the tax cut package is even more skewed to the state’s wealthiest families. Eliminating the estate tax will give around 4,000 inheritors of very large estates – the richest 5 percent of estates left behind, in fact – an average tax cut of about $140,000. These are the families who don’t have to worry about choosing between filling up the tank and buying food.

Proponents of killing the estate tax – which has been on the books for 80 years – claim that doing so will make wealthy families reconsider leaving New Jersey, but the data are clear: estate taxes do not drive wealthy retiree relocation decisions, and the existence of New Jersey’s estate tax has not been shrinking the state’s revenues or economy. In reality, the number of wealthy New Jerseyans has been steadily growing, as have estate tax revenues. Now New Jersey must go without this important revenue source and tool to fight inequality.

The gas tax increase, while not popular, will provide the state essential dollars to shore up the Transportation Trust Fund and get New Jersey’s roads, bridges and public transit back in shape. That’s an essential investment. But the trade-offs passed as part of the deal, in the end, will do more harm than good, providing a lavish tax break for those who need it the least and placing the state’s ability to pay for essential services, promised obligations and other critical investments in serious jeopardy. It’s a trade-off New Jersey simply can’t afford.

Don’t Take My Son’s Life-Saving Health Care Away

Posted on by Jon Whiten

This op-ed appeared in the February 5, 2017 edition of the Star-Ledger. 

As Congress inches toward repealing the Affordable Care Act with no apparent replacement, the health and lives of tens of millions of Americans hangs in the balance. My 4-year-old son is one of them, and I urge New Jersey’s four congressmen who recently voted to advance repeal to hear his story, to think about his future and to explain why they want to take away his affordable and life-saving coverage.

They are U.S. Reps. Frank LoBiondo (R-2nd Dist.), Chris Smith (R-4th Dist.), Leonard Lance (R-7th Dist.) and Rodney Frelinghuysen (R-11th Dist.).

In 2015, when he was just 2, my son Michael wasn’t doing well. He was lethargic, he was eating a ton but not gaining any weight and he was urinating excessively. Imagine our shock when we found out he had Type 1 diabetes, and was not just under the weather but nearly dead — his life saved only by the quick and decisive actions of our family pediatrician.

Before we get much further, let’s clear things up: Type 1 diabetes is not the same as Type 2 diabetes. Michael will have Type 1 diabetes forever, unless a cure is found. No amount of “diet and exercise” will make his chronic condition go away.

And no, Michael’s Type 1 diabetes wasn’t caused by him being overweight. It’s a genetic and autoimmune disease that about 40,000 children and adults are diagnosed with each year. In all, nearly 1.3 million Americans are living with Type 1 diabetes.

In other words, in the parlance of the Affordable Care Act, my 4-year-old son has a “pre-existing condition.” And he will forever.

This condition, I should note, is really expensive. Michael is kept alive by a vial of insulin, since his pancreas doesn’t produce a drop of the stuff. The insulin that flows into his little body through a mechanical pump has nearly tripled in cost in the past decade, according to the Journal of the American Medical Association.

Just last week, a class-action lawsuit was filed accusing three manufacturers of this life-sustaining drug of conspiring to drive up the costs of insulin.

Whether or not that’s true, the fact remains: This drug — and the laundry list of other drugs and supplies we have to keep to ensure our 4-year-old son stays alive — is not affordable without excellent health insurance. Luckily, we have been able to find affordable and comprehensive coverage for Michael on the ACA’s health insurance exchange.

In the past, insurers could discriminate against people like my son; their pre-existing conditions often led to higher premiums, or denial of coverage altogether. Thanks to the Affordable Care Act, that’s no longer legal.

As he gets older, and potentially faces a variety of serious medical complications from his diabetes, he’ll become a less and less “attractive customer” to health insurers whose primary concern is protecting their bottom lines. If the Affordable Care Act is no longer there to protect him from the vagaries of an industry with a long track record of putting profits before people, he will face enormous bills for health coverage. And that’s if he’s lucky enough to even be approved for coverage.

Make no mistake: Michael is not alone. In fact, over 52 million non-elderly Americans — including 1.2 million New Jerseyans — had declinable pre-existing conditions in 2015, according to the Kaiser Family Foundation.

Also unmistakable is the fact that, overall, Michael is very lucky. His parents (my wife and me) are middle-class professionals able to pay for his nonsubsidized insurance on the exchange. He’s not among the 14 million Americans — including more than half a million New Jerseyans, of whom about 100,000 are children — who have obtained coverage due to the ACA’s Medicaid expansion, people whose coverage will likely disappear after repeal takes effect.

And he’s not among the other 60 million low-income Americans (and 1.3 million New Jerseyans, of whom over 600,000 are children) on “pre-expansion” Medicaid (and NJ FamilyCare) who face grave threats to coverage, in the form of “block grants” that would lead to devastating cuts in service or eligibility as the federal government reduces spending on Medicaid by $1 trillion or so over 10 years.

As members of Congress move to repeal the Affordable Care Act, they need to be clear of the consequences. Repeal without an adequate and robust replacement will take affordable coverage away from my 4-year-old son and millions of others just like him. Putting their lives in jeopardy in order to score political points is not only a terrible way to make public policy, it’s immoral.

Our congressional leaders must stand up against this destruction.

Op-Ed: Immigration Orders Fly in Face of American Values

Posted on by Erika J Nava

This op-ed appeared in the February 1, 2017 edition of the Asbury Park Press.

Instead of creating an environment of inclusion and respect towards immigrants, President Trump has – with a few strokes of his pen – put New Jersey families at risk, put billions of taxpayer dollars needlessly on the line and turned America from a country welcoming “poor, huddled masses” to one dangerously shutting its doors. The president’s actions – if fully implemented – will also seriously damage New Jersey’s economy.

Building a wall at the taxpayers’ expense will not deter undocumented immigration. But it will cost at least $12 billion, according to most estimates, and as much as $40 billion. For an administration and Congress that is eyeing major budget cuts that will harm the well-being of tens of millions of American families in the name of “deficit reduction,” spending such unfathomable amounts on an ineffective wall is reckless at best. The idea floated last week to pay for the wall with a 20 percent tariff on Mexican imports would not only disrupt trade agreements around the world – it would end up brazenly passing the bill to American consumers, who would face higher prices for food (the U.S. imported $21 billion in Mexican agricultural products in 2015), cars and consumer goods made in Mexico.

Punishing decisions made by local police and policymakers to limit their voluntary involvement with federal Immigrations and Customs Enforcement (ICE) deportations puts the safety of residents of these “sanctuary cities” in jeopardy. And the latest research from the Center for American Progress and National Immigration Law Center shows this commonsense approach by local authorities also pays dividends for local economies. Counties with sanctuary policies not only have lower crime rates than non-sanctuary counties – busting the myth that sanctuaries are “safe havens” for criminal activity – they have stronger economies, with higher median household incomes, lower unemployment rates and less poverty.

Apparently facts do not matter to the President – or to our Governor, who recently voiced his support for taking federal funds away from New Jersey’s own sanctuary cities, even though such a move would clearly harm the Garden State.

Despite the executive order’s threat of drying up funding, some experts suggest that eliminating federal funding to sanctuary cities would be unconstitutional and halted by the courts. Simply put, federal ICE agents have to do their own deportation work, not rely on local police and local taxpayers to do it for them.

And banning refugees and legal permanent residents from seven Muslim-majority countries is an affront to core American values – and one that won’t make America any safer. In fact, no terrorist from these countries has perpetrated a lethal attack in the U.S., and the chance of being killed by any refugee is just 1 in 3.64 billion, according to the Cato Institute.

Here in New Jersey, we take pride in being the state with the third largest share of immigrants in the nation and the most diverse, with immigrants from all over the world, including refugees. Little known fact: New Jersey, along tied with California, has the highest share of Syrian immigrants in the nation.

This ban, the proposed wall and punishing sanctuary cities are all immoral, a violation of basic civil rights and an affront to basic American values and a serious blow to the American economy, which prospers from attracting enterprising immigrants from around the world. We all – including Gov. Christie – must stand in unison to reject these proposals.

Audit Finds Lax Oversight with Tax Subsidy Program

Posted on by NJPP Staff

Last night, NJTV News covered a recent state audit that found lax oversight of New Jersey’s business tax subsidy programs, and turned to NJPP President Gordon MacInnes for insight and analysis.

“It strikes us that the likelihood is very strong that most of the jobs that were retained — where the subsidy gets the credit — were going to stay anyway,” he said.

MacInnes heads the left-leaning New Jersey Policy Perspective. He points to Panasonic as an example.

“The chief financial officer — after the deal was struck — said, ‘Eh! That had nothing to do with our moving and staying in New Jersey,’” MacInnes said.

The audit found lax oversight, noting, for example, “…four of seven businesses reviewed had fewer employees than they needed to receive a full grant but their awards had not been adjusted.” In Camden the EDA offered companies like Lockheed Martin, Holtec and Subaru even bigger, enhanced tax breaks. But the audit examined that rationale and advised, “…such an increase should be questioned and revisited as it may not be in the best interest of the state.”

And MacInnes adds, the EDA can’t verify a company’s motive.

“Yet, that is the threat that is employed by supporters of these tax cuts, to say, ‘If you don’t do this, we’re going to see even greater flight out of New Jersey,’” he said.

A 35 Percent EITC is Good News for New Jersey Working Families

Posted on by Jon Whiten

EITCto35countychart-01

Increasing New Jersey’s Earned Income Tax Credit (EITC) will provide over half a million New Jersey working families with a much-needed bump in their take-home pay while giving the state’s economy a boost, according to a new report we released today.

As part of last year’s gas tax increase deal, the New Jersey EITC was increased to 35 percent of the federal credit, up from 30 percent of the federal credit. The change will help hundreds of thousands of New Jersey families this year during tax time, as the change applies to tax year 2016.

Working families across New Jersey will benefit from the governor and legislature’s decision to increase this important tax credit. Now Congress should take the next step in improving the EITC by expanding it for workers not raising children.

The report includes a county-by-county breakdown of the number of working families affected, and the increase in the EITC to those families, as well as other key information about this vital boost to this important tax credit.

Key findings:

Increasing the EITC to 35 percent will help nearly 600,000 New Jersey families whose members are working but not earning enough to get by in this high-cost state. These workers’ annual take-home pay will increase by an average of $116 (and by as much as $314), bringing the average total of state EITC dollars received to $811 a year

Boosting the EITC will help working people all over New Jersey. All but five of the state’s 21 counties have more than 10,000 households receiving the EITC, and more than half of them (12) have over 20,000 EITC households.

Increasing the EITC will help very poor families the most. Nine out of every ten New Jersey households that receive the EITC earn less than $30,000 a year. About three-quarters earn less than $20,000 and more than half – 61 percent – make less than $15,000.

Increasing the EITC will boost the economy. Increasing the state EITC to 35 percent will generate $69 million in new tax credits each year that will help boost local economies around the state, bringing millions of dollars of spending to almost every county.

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