Plan Restores Earned Income Tax Credit, Boosts Funding for Higher Education, Health, Social Services, Schools and Cities
TRENTON- New Jersey’s Democratic legislative leadership on Monday announced that their $35.3 billion budget 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.
“This is a budget that projects our values by protecting the middle class and the working poor, investing in higher education, and providing for the needs of the most vulnerable in our society,” said Senate President Steve Sweeney (D-Gloucester). “We are keeping our promise to make the full pension payment required by law and doing all that we can to restore the pension system to fiscal solvency, not only to protect the pensions of those who have earned them, but to protect the interests of taxpayers and restore confidence in the bond markets.”
“This is a budget plan built around fiscal responsibility,” said Assembly Speaker Vincent Prieto (D-Hudson/Bergen). “We need to balance our budget and meet the state’s pension obligations, all while advocating for New Jersey’s working class residents. With this plan, we are cutting debt, meeting our obligations and protecting core values such as health care for women, quality education, tax relief for hard-working families, job creation and tax fairness for everyone.”
The $3.1 billion pension payment is funded partly through an increase in the “millionaire’s tax” to 10.75 percent and an increase in the corporate income tax to 10.5 percent.
“Millionaires are the only group in New Jersey whose real income has been rising in recent years,” Sweeney said. “This budget protects the middle class and the working poor by ensuring that no one earning less than $1 million will pay an additional dime in taxes.”
“This is a budget for New Jersey’s hard-working middle-class families and their values,” Prieto said.
The Democratic leaders said the Democratic budget once again protects the most vulnerable.
“From victims of domestic violence to the developmentally disabled to senior citizens, our budget pays special attention to the needs of the most vulnerable,” said Senate Majority Leader Loretta Weinberg (D-Bergen). “It also 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, who have been hit the hardest by New Jersey’s lagging economic recovery.”
“This budget plan makes good on our obligations and funds vital priorities important to New Jersey’s middle-class,” said Assembly Majority Leader Lou Greenwald (D-Camden/Burlington). “The plan re-emphasizes our commitment to fiscal responsibility, meets our obligations, tackles state debt, ensures quality health care for women and provides working class tax relief, while making sure all our children get a strong education. It’s the right approach for our state.”
The leaders also said the proposed budget invests an additional $50 million into New Jersey’s higher education system.
“Investing in higher education not only improves the quality of education for our students, but also is a proven way to boost the economy,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen). “The program initiatives we are funding will create jobs, spur public-private research partnerships, and help our cities grow. Restoration of Educational Opportunity Fund cuts will make the college dream a reality for those who can least afford rising college costs.”
“The current course has led to credit downgrades and increased state debt, and is unacceptable,” said Assembly Budget Chairman Gary Schaer (D-Bergen/Passaic). “Through months of hearings and deliberations, the budget committee heard the concerns of New Jersey and the need for budget discipline and fiscal responsibility, and this plan is built around those concepts. We must balance the budget, meet our obligations and protect our working class.”
Senate President Pro Tem Nia H. Gill (D-Essex) noted that the Democratic budget makes a significant investment in healthcare and education.
“Investing in better healthcare and education pays off both in better outcomes and reduced costs for all of our residents,” Senator Gill said. “We are proud to introduce a budget that exemplifies our values by stepping up to meet the needs of our citizens.”
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.
· 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.
· 15 percent CBT Surcharge for One Year – 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.
· Various cuts of approximately $60 million to Governor’s proposed FY 2016 Budget.