Plan Restores Earned Income Tax Credit, Boosts Funding for Higher Education, Health, Social Services, Schools and Cities
(TRENTON) — The Democratic budget plan for New Jersey that would fully fund the legally required pension payment, restore the Earned Income Tax Credit and invest in higher education, healthcare, social services, schools and cities was approved by both the Senate Budget and Appropriations Committee and the Assembly Budget Committee on Tuesday.
“This is a budget that meets the state’s responsibilities, helps restore fiscal stability and makes the investments needed for economic growth,” said Senator Paul Sarlo, chairman of the budget committee. “It protects middle class families and working people by supporting higher education, and providing for the needs of the most vulnerable in our society. And, it will help restore confidence in state finances.”
“Underfunding the pension payment will put the state deeper in debt, lower the state’s credit rating and hurt the economy,” said Assemblyman Gary Schaer, who chairs the Assembly budget panel. “That’s why Democrats, with this budget plan, have chosen the fiscally responsible course. The state should balance its budget and fully fund its pension obligation. In the end, this is about meeting our obligations and protecting New Jersey’s working class. This is a budget plan everyone should support.”
The $35.3 billion plan includes a $3.1 billion pension payment funded in part through an increase in the “millionaire’s tax” to 10.75 percent and a one year increase in the effective corporate income tax of 1.35 percent.
The Democratic budget leaders said the fiscal plan protects the most vulnerable by helping victims of domestic violence, the developmentally disabled and senior citizens, among others. It provides for full restoration of the Earned Income Tax Credit to 25 percent of the federal level, which will put several hundred dollars more into the pockets of the working poor, the legislators said.
The leaders also said the proposed budget invests an additional $50 million into New Jersey’s higher education system, including support for science and technology and restoration of the Educational Opportunity Fund to help make college a reality for those who can least afford rising costs.
The Assembly budget committee approved its bill, A-4600, with a vote of 7-4. The Senate committee approved its bill, S-2016, with a vote of 8-5.
The FY2016 Democratic Budget
- Fully funds the 5/7 FY 2016 Pension Payment — $3.1 billion;
- Adds $1.8 billion to Governor’s proposed pension contribution of $1.3 billion; and
- The FY 2015 Supplemental Appropriation bill would make a $300 million down payment toward the FY 2016 contribution now.
Revenues and Resources
- Millionaire’s Tax — the increase will ONLY impact income OVER $1 Million — Revenue of $688 million;
- A one year increase in the effective corporate income tax of 1.35 percent – Revenue of $435 million;
- FY 2015 revenues provide an additional $300 million, according to the OLS;
- FY 2016 revenue projections would be increased to reflect revised OLS analysis of $425 million;
- Federal fringe benefit reimbursement of $160 million; and
- Various cuts of approximately $60 million to Governor’s proposed FY 2016 Budget.
Investing in Higher Education
- $20 Million for Seton Hall/Hackensack Medical School;
- $10 Million for Montclair State Communications Building;
- $10 Million for NJIT/Rowan school of medicine expansion;
- $2.5 Million more for EOF;
- $2.5 Million more for senior public universities;
- $2.3 million to create parity among State Supported FTE among Research Universities (Rowan);
- $1.2 million for Center for Research and Education in Advanced Transportation Engineering; and
- $500,000 more for Independent Colleges.
Investing in K-12 Education
- $20 million for High Enrollment/Decreasing Ratable School Districts;
- $5.2 million for non-publics Security, Nursing, Tech;
- $4 million for Adult Education at Vo-Techs;
- $3 million for County Vocational Partnerships;
- $2 million for Technology and Professional Dev;
- $1.5 million federal funding for Learning Ally;
- $1 million to address the Achievement Gap;
- $550k for Pinelands growth aid (EHT); and
- $435k for AP exam fee waivers for F/R/L Students.
Protecting Our Most Vulnerable
- $8 million for Veteran’s Access to Care;
- $5 million for Sheltered Workshops;
- $3 million for Community Service Waiting list placements;
- $2.5 million for Family Support Services;
- $850,000 to CASA;
- $400k for Holocaust Survivors; and
- $200k for Adler Aphasia.
- $7.5 million for Family Planning Services;
- $2.2 million for Domestic Violence and Rape Prevention;
- $2.8 million for NJ Coalition Against Sexual Assault; and
- $100k for Project SARAH.
Healthcare and Wellness
- $5.25 million for Nursing Homes/SCNFs;
- $5 million for Holy Name Hospital for statewide palliative care model program;
- $3 million increase in Personal needs allowance;
- $2.4 million for Child Collaborative Mental Health Pilot Program;
- $1 million for Cancer Research;
- $1 million for Huntington Disease beds;
- $750k Trauma Registry;
- $250,000 Housing First Pilot Program;
- $250,000 for Board of Nursing – fix backlog;
- $200k for Elder Index; and
- $137,000 increase PCA to $18 an hour.
- $24.1 million UEZ restoration;
- $9.2 million county jail initiative for re-entry programs;
- $4 million urban county transportation funding;
- $550k to “unfreeze” ALJ salaries;
- $308k NJTV equipment purchases for service expansion;
- $250k increase for SBDC; and
- $100k for local government internet access expansion.