New Jersey Policy Perspective has made a number of key budget recommendations in its policy briefing ”Investing in New Jersey’s Future Will Require New Revenues.” Fortunately, support for raising new revenues, a key necessity of Governor Murphy’s initiatives, comes in a poll released Wednesday. Next Tuesday Gov. Murphy will present his first budget, a combination of tweaks on the current budget and his proposals for next year’s budget starting July 1, 2018.
Despite feeling heavily overtaxed, and with three quartets of the state saying their property taxes are unfair, a Rutgers Eagleton poll released on Wednesday indicates New Jerseyans are amenable to funding some of Governor Murphy’s initiatives including those related to improving transportation systems and other infrastructure as well as education at all levels.
- Three quarters either “strongly” (60%) or “somewhat” (16%) support taxing the sale of of recreational marijuana if it were made legal.
- Just over two-thirds favor increasing the “millionaire’s tax.”
- Finally, most residents – by a margin of 58% to 37% – support “closing tax loopholes for corporations that currently allow them to shift profits made in NJ to lower tax states.”
Essentially NJPP’s mantra is that “Critical investments in public assets won’t happen without more public income.” Below is what NJPP is telling us.
“CRUCIAL PUBLIC INVESTMENTS HAVE DETERIORATED
A quarter century of tax cutting, false promises and high-risk financial shenanigans have degraded New Jersey’s economic assets and imperiled its future. How bad has it gotten. Here’s a quick look:
- School, municipal and county aid has been sharply reduced after adjusting for inflation, resulting in a steady increase in property taxes.
- Direct property tax relief was slashed during the recession and has not been restored.
- Residential property taxes continue to be the highest in the nation.
- New Jersey has shifted the cost of public higher education to students and their families.
- NJ Transit – once the national public transit model – is now the nation’s underperformer.
- The state’s budget is unbalanced and its reserve fund is depleted.
- Lawmakers have put New Jersey on the hook for billions in future tax breaks.
- The state is currently unable to fund promised public employee pensions.
The Big Question: If New Jersey can’t finance the pensions it owes public employees or keep its commuter trains running or even discuss taxing a few thousand millionaires, how can it invest in New Jersey’s crucial assets like great public schools, the nation’s highest-quality preschool program, public colleges and universities or the nation’s 3rd largest public transit system?
TAX REFORM CAN BOLSTER NEW JERSEY’S ECONOMIC FUTURE
By cleaning up the state tax code, reversing some of the most ill-advised tax cuts of recent years and asking the state’s wealthiest households to pitch in a bit more, New Jersey could raise over $2.5 billion in new revenues that could be invested in the state’s long-neglected assets, putting the state back on the right track.
- Return the sales tax to 7 percent and modernize its application ($700 million+)
- Restore the estate tax at a threshold of $1 million ($400-600 million)
- Make the income tax more equitable by increasing rates on the wealthiest 5 percent of households ($1 billion+)
- Close corporate tax loopholes used by multi-state corporations ($110 to $290 million)
- Consider recouping a piece of the windfall corporations will receive from the federal tax changes ($500 million)
These are tax changes that need attention and deliberation if New Jersey is to return to a competitive economic position. Without raising these revenues to restore and expand public investments, New Jersey will continue to be in the bottom 20 percent of states for economic activity and job growth.”