Tax Justice Digest stories about New Jersey
Earlier this week, legislators in Minnesota overrode Governor Tim Pawlenty’s veto and enacted a $6.6 billion transportation plan, one of the key elements of which is a 8.5 cent per gallon increase in the state’s gas tax. While higher gas taxes tend to fall harder on low-income individuals and families, the plan does include a refundable low-income tax credit of up to $25 per family to help mitigate the regressive impact of the larger levy. Other states considering proposals to raise their gas taxes to meet transportation funding shortfalls would do well to follow
A gas tax increase that will soon be before the Nebraska Legislature may also be worth emulating in some respects. A bill there would effectively increase the state’s gas tax by 3 cents per gallon. But it is the means by which that increase would be accomplished that is notable. The bill would reduce the existing gas tax by 8 cents per gallon and instead impose a tax equal to 5 percent of the wholesale price of gas. Using what amounts to a sales tax on gasoline rather than an excise tax is preferable since it ensures that state revenues are more responsive to economic growth.
Lastly, raising the gas tax wasn’t envisioned in New Jersey Governor Jon Corzine’s transportation or budget plans, but, in a new report, New Jersey Policy Perspective (NJPP) argues that it ought to be part of any comprehensive approach to improving state finances. In observing that the
New Jersey
New Jersey Governor Jon Corzine has put forward an ambitious proposal of his own to help reduce the state's debt burden and to make needed public infrastructure investments. He has called for a 50 percent increase in tolls on the Garden State Parkway and other major roads every four years. Corzine also wants to create a new entity that would manage those roads and that would have the authority to issue as much as $38 billion in bonds backed by the revenue generated by such toll increases. While higher tolls may be a necessary component of any long term budget plan in the Garden State, New Jersey Policy Perspective's Jon Shure points out that they ought to be considered with an eye towards improving the overall fairness of state fiscal policy.
Politicians in the Garden State give the ballot measure mixed reviews. Assembly Speaker Joseph Roberts Jr. supports the measure saying, "passage of Public Question #1 must be priority #1." On the other hand Governor Jon Corzine opposes the question though he hasn't actively campaigned against it. New Jersey Policy Perspective President Jon Shure comes out squarely against the proposal for three very good reasons. The amendment reduces the state's ability to be fiscally flexible, it won't help the larger problem that the state continues to spend more than it collects, and it is "yet another Band-Aid applied" until the entire tax system can be fundamentally restructured.
On Thursday, Governor Jon Corzine signed
Eighty million dollars for Verizon? Thirty-seven million dollars for Citigroup? Sounds almost like a modern version of Monopoly, doesn't it?
Well, as a recent New York Times op-ed by New Jersey Policy Perspective's Jon Shure points out, those are just two of the tax breaks that the Garden State has doled out to major corporations since the mid-1990s. Yet, as New Jersey's experience with MSNBC suggests, the corporations that benefit from this largesse often don't live up to their end of the bargain.
Good Jobs First has long been making that very point - and this week introduced a new on-line tool to help the public keep track of all of the subsidies that one particular corporation, Wal-Mart, is receiving from states and localities around the country. See www.walmartsubsidywatch.org to learn more.
New Jersey's property taxes are among the highest in the nation. Much has been made in the national press about New Jersey Governor Jon Corzine's efforts to reduce the state's property tax. The property tax saga has been full of ups and downs including heated political debates, a sales tax increase, and even a temporary government shut down. Now lawmakers expect the Governor to sign a bill that includes $2 billion in property tax credits that will cut property taxes for most homeowners. Those earning less than $100,000 a year would see a 20 percent cut in their property tax bills. Those earning between $100,000 and $150,000 would see a 15 percent cut, and those with incomes between $150,000 and $200,000 would see a 10 percent cut. But 90 percent of New Jerseyans remain skeptical of the proposal. Jon Shure of New Jersey Policy Perspectives is skeptical too, arguing that the proposal (which pays for these across-the-board property tax cuts by diverting sales tax revenue and repealing an existing "circuit-breaker"-style property tax credit) falls far short of the long-term structural reform that New Jersey needs
In a welcome trend, lawmakers and advocates in Connecticut, New Jersey, North Carolina, Nebraska, New Mexico, Montana, Hawaii, Utah, Ohio, and Iowa are considering enacting Earned Income Tax Credits — or expanding existing EITCs. The federal EITC has been hailed by policymakers of all stripes as an especially effective tool for lifting working families out of poverty. At the state level, the EITC offers the additional benefit of helping to offset the regressive sales and property taxes that hit low-income families hardest. To find out more about whether EITC legislation is active in your state, check out the Hatcher Group's State EITC Online Resource Center.
At first glance, it looks like the holy grail of state governance: a way to raise more revenue without raising taxes. The idea of selling off or leasing state assets, such as the state lottery, is now under discussion in Illinois, Indiana, Minnesota, New Jersey, and Texas. It is easy to see the idea's appeal: Texas Governor Perry predicts that the sale of his state's lottery would generate at least $15 billion, for example, while Indiana Governor Daniels expects that state's lottery to carry a price tag of over $1 billion, all without a single tax increase. However, there is a catch. While the boost to revenue is substantial, it is a one-time gain, and it comes at the cost of the yearly revenue contributions these assets would provide far into the future. While the seemingly painless financial gain offered by this privatization schemes is tempting, in the long run these sales would only diminish state coffers.
In his state of the state address, New Jersey Governor Corzine outlined a proposed property tax reform package and emphasized property tax breaks that are fairly progressive in terms of who benefits. The proposed package would reduce property taxes by 20% for those with incomes less than $100,000. Those with incomes of $100,000 to $150,000 would see 15% reductions, and those with incomes of $150,000 to $250,000 would see a reduction of 10%. In addition to the tax cuts, the proposal would also cap the amount property taxes can be increased per year at 4%.
