Today the New Jersey Senate and General Assembly passed a fiscal year 2019 budget without sustainable, long-term sources of revenue to fund the state’s existing obligations and critical public services. The legislative budget does not include an increase in the state income tax on individuals who earn more than $1 million per year nor does it restore the sales tax to 7%.

NEW JERSEY POLICY PERSPECTIVE PRESIDENT, GORDON MacINNES:

“Once again, the legislature has passed a patchwork budget that fails to meet New Jersey’s long term needs. Out of all the options on the table, the budget forgoes long-term, sustainable sources of revenue, and instead depends on a temporary increase in the corporate business tax. There is danger in relying on this tax for the lion’s share of new revenue as, among major taxes, it is the most volatile source of state funding. That danger is compounded by hundreds of millions of dollars in phantom cuts, ‘savings’ from yet-to-be performed audits, and accounting tricks that have defined New Jersey’s budgets of the past. With this budget, the legislature has missed an opportunity to turn the page on decades of short-sighted decisions that have plagued the state’s finances and endangered its future.”

Source for image: CAFR 2016, 2017.

Looking at the Last 5 Years of CBT Revenue

• Years with Revenue Lower Than Projection: 4
• Average Shortfall: $212.6 Million
• Average Shortfall as % of Projection: 9%

“Millionaires Tax” is Reliable and Popular with Voters

As legislators and Governor Murphy debate revenue sources for the FY 2019 budget, an NJPP overview of independent polling shows consistent support for tax increases that provide adequate funding for critical state assets. By far, the most popular tax proposal is an increase in the state income tax for households earning more than $1 million per year, a.k.a. the “millionaires tax.” Polls conducted by NJPP, Rutgers-Eagleton, Quinnipiac University, and Stockton University show that approximately 7 in 10 New Jersey voters support a “millionaires tax.”

• September 2017, NJPP Poll: 75% Support
• November 2017, Rutgers Poll: 65% Support
• March 2018, Stockton Poll: 68% Support
• March 2018, Quinnipiac Poll: 74% Support
• April 2018, NJPP Poll: 70% Support