(TRENTON) – Speaker Sheila Y. Oliver, Majority Leader Lou Greenwald, Assemblywoman Bonnie Watson Coleman and Assemblyman Gary S. Schaer on Friday condemned Gov. Christie’s veto of legislation that would have helped lower income working families augment their income by restoring the New Jersey Earned Income Tax Credit cut by the governor two years ago.
The Earned Income Tax Credit is a credit for working poor residents who work and have earned income. The governor reduced the credit from 25 percent of the federal tax credit to 20 percent in 2010, effectively raising the income tax liability for New Jersey families by $45 million.
The bill (A-3029) would have helped lower income working families by reversing the cut and restoring the program to its previous level of 25 percent, but it was vetoed by the governor.
“It’s disappointing, but not surprising that the governor would veto legislation that would have put a few extra hundred dollars in the pockets of poor working families,” said Oliver (D-Essex). “Sadly for this segment of the population, they don’t earn enough for the governor to care.”
“It’s mind-boggling how this governor will go to great lengths to spare the wealthy from paying their fair share, but won’t think twice about denying a working family of modest means timely financial relief,” said Greenwald (D-Camden/Burlington). “His priorities are out of whack.”
“New Jersey’s most vulnerable residents always get the short end of the stick with Gov. Christie. This veto is just another example,” said Watson Coleman (D-Mercer/Hunterdon). “If you are poor in this state, as far as the Christie administration is concerned, you are on your own.”
“The average tax credit under this bill would have been more than $500. That could have helped a struggling homeowner with a mortgage payment or a utility bill,” said Schaer (D-Bergen/Passaic). “Instead, they get a tax increase and no relief in sight courtesy of our governor.”
According to federal and state data, some 528,000 taxpayers received an average state Earned Income Tax Credit (EIC) benefit amount of approximately $430 during fiscal year 2010, the most recent year for which data is available. Under the bill, the average EIC benefit amount would have grown to approximately $545, assuming a level number of participants.
The governor claimed he was proposing restoration of the credit to 25 percent in his fiscal year 2013 budget address, when in actuality, he planned to restore half of the reduction in fiscal year 2014 and the other half in fiscal year 2015, meaning there would be no restoration of benefits in the fiscal year 2013 budget. This bill would have restored the credit to 25 percent for tax year 2012, thereby providing the full restoration in fiscal year 2013. It would have taken effect immediately.
The state credit is based on the federal credit, considered the nation’s largest and most successful anti-poverty program. Created in 1975 to ease the burden of payroll taxes for the working poor, the federal earned-income tax credit was expanded by President Reagan, and has substantially reduced child poverty and increased incentives to work. Twenty-four states created their own credits to extend tax relief for their residents, based on a percentage of the federal credit.