On Thursday, Governor Jon Corzine signed New Jersey's fiscal year 2008 budget into law, but warned that difficult times may be ahead if the state fails to address a looming structural budget deficit. But, as Jon Shure of New Jersey Policy Perspective explains in a recent op-ed, this concern didn't stop the Governor from approving a number of substantial tax cuts included in this year's budget, such as more than $2 billion in additional property tax rebates and a $275 million business tax cut. Though much smaller in cost, at roughly $36 million, the state budget contains another tax change that may be more meaningful for some working families - an expansion of New Jersey's earned income tax credit. As a result of the change, approximately 300,000 taxpayers, all of whom have incomes between $20,000 and just under $40,000 per year, will now receive the credit, while the overall value of the credit will rise from 20% of the federal credit to 25% over the next few years.
