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Greenwald, McKeon, Lampitt, Diegnan Package Designed to Aid Working Families

A package of bills sponsored by Assembly members Louis Greenwald, John McKeon, Pamela Lampitt and Patrick J. Diegnan, Jr. geared towards making college more affordable for children of working families cleared a key Assembly panel on Monday, despite the abstention by all four Republicans on three of the four bills.

The first bill (A-1644), sponsored by Greenwald, would create a gross income tax credit for full time attendance at New Jersey institutions of higher education, county colleges and accredited post-secondary training schools.

“Let’s face it, college tuition rates are far outpacing inflation right now. Consequently, the U.S. has fallen far behind other developed nations in terms of the number of students going on to college,” said Greenwald (D-Camden). “For some of my Republican colleagues, $1,000 may not seem like a lot of money, but for the working families of New Jersey, it makes a big difference, particularly when they’re getting squeezed at every end right now.”

The tax credit would be equal to 10 percent of tuition costs up to $10,000 paid by a taxpayer either for a resident dependent under 22 years of age or for the taxpayer’s own full time attendance in New Jersey. Taxpayers with gross incomes of up to $150,000 would be eligible for the tax credit.

Tuition for New Jersey state schools now averages $11,000 a year compared to the national average of $7,605, according to the College Board’s “Trends in College Pricing.” A recent Star Ledger survey also showed that all 24 of New Jersey’s traditional four-year colleges and universities raised tuition and fees this year faster than the inflation rate, which is less than two percent. Students at New Jersey’s four-year colleges and universities will pay between 3.5 percent and 7.3 percent more in tuition and fees this year.

The second bill (A-3337), sponsored by McKeon, Lampitt and Diegnan, would offer incentives for families to save for college by allowing a gross income tax deduction for amounts contributed to the New Jersey Better Educational Savings Trust (NJBEST), which is the state’s IRS Section 529 qualified college savings program.

“Rising college tuitions are making it near impossible for families to save all that they should for a child’s education,” said McKeon (D-Essex). “This measure will hopefully put college within reach for more students.”

“Any incentive we can provide to promote higher educational opportunities in New Jersey is a win for our state,” said Lampitt (D-Camden), Chair of the Assembly Higher Education Committee. “Without these efforts, college will become further out of reach for working families and something only the privileged can afford.”

Federal tax law allows contributions of federally taxed income to accounts established for a beneficiary’s qualified higher education expenses. Account investment earnings are not federally taxed until withdrawn, and if the earnings are used for qualified higher educational expenses they are never taxed. Currently, New Jersey matches those federal tax advantages.

The bill would allow a gross income tax deduction of up to $10,000 annually for married couples filing jointly, $5,000 annually for other taxpayers, for contributions to one or more NJBEST accounts.

“Tuition hikes have surpassed inflation, making the dream of a college education less attainable for some,” said Diegnan (D-Middlesex), Chair of the Assembly Education Committee. “This is about making it a little easier for parents to provide that dream for their child.”

The third bill (A-3354) would help ease certain college costs for veterans and members of the Armed Forces by requiring public institutions of higher education to waive their application fee, as well as any fees for the receipt or transmission of a transcript for each veteran, member of the Armed Forces of the United States, or member of the New Jersey National Guard who resides in the state. College application fees for New Jersey institutions typically average $50-65.

“One application fee alone may not be an exorbitant amount of money, but when you consider the fact that many prospective students typically apply to a handful of schools, it can certainly add up. For someone in the military who may have been living off a stipend, especially someone with a family, these fees can be a real burden. When coupled with other benefits offered to our military personnel, hopefully this can help put a dent in the cumulative costs associated with applying and going to college,” added Greenwald.

The fourth bill (A-3417) provides a sales tax exemption on parking for commuter students or students who live in non-university housing. Currently, residential students who live in official university housing are exempt from this tax. Under the bill, this exemption would be limited to student parking provided by colleges or universities that have applied, and have been certified, for sales tax-exempt status by the Division of Taxation in the Department of Treasury.

“This bill eliminates the tax disparity between resident and non-resident students,” said Lampitt (D-Camden). “In the end, it will provide targeted tax relief for students who commute to school during the current economic decline.”

The bills all cleared the Assembly Higher Education Committee and have now been referred to the Assembly Appropriations Committee.