(TRENTON) — Assemblyman Louis D. Greenwald (D-Camden) issued a multimedia package Tuesday describing how Gov. Chris Christie’s veto of a proposed New Jersey Homebuyer Tax Credit would stall recovery of New Jersey’s s housing market and keep residents out of work.
Greenwald’s legislation (A-1678), which was passed with strong bipartisan support in both houses of the Legislature, would have offered tax credits of up to $15,000 for people buying new construction or previously owned homes. The total available credits would have been capped at $100 million, with roughly $33 million available per year, with credit distribution split between new and existing home purchases 75 percent to 25 percent.
Gov. Christie vetoed the legislation for not being revenue neutral, despite numerous economic indicators showing that the financial benefit to the state of creating the program – in the form of tax revenue on new jobs, materials purchases and home sales – would more than make up for the program’s cost.
The multimedia package consists of a video on Greenwald’s response to the veto and audio and a transcript of same.
The audio file is available upon request.
A transcript of Greenwald’s statement is appended below:
“So, basically his emphasis for vetoing this is that he doesn’t believe it will create jobs, that we don’t have the money and that the money will be utilized by an existing inventory that’s already been created.
“To the fact that this will not create jobs, it shows an alarming misunderstanding of how the tax credit works.
“If you think about how a home is built; think about the process itself and how the tax credit would work — we’re not going to go out with magic beans and plant them in the yard and sprinkle them with water and hope that a home sprouts up.
“We’re not going to go out tonight and find the brightest star and say, ‘Star light, star bright, first star I see tonight, I wish I may, I wish I might, have the home I need tonight.’
“That’s not how a home is going to get built.
“A developer, an investor, a home builder is going to decide that there is a demand and a market need for housing. And they’re going to invest in New Jersey. And their going to put bricks and mortar, sticks and bricks, up in this state. And they will build a home.
“And when they do that, they’re going to go to carpenters, electricians, plumbers and pipefitters — of which 40% are currently unemployed in the State of New Jersey. And when they employ those building trades and they put those people to work and they take them off the unemployment line, those people will go to work and collect an income and they will pay an income tax.
“Now when they collect that income, not one tax credit has gone out. We have not spent one of the $33 million that the governor references in the first year. But people have gone to work and they’re off the unemployment rolls and they are starting to pay income tax.
“Then, when those people go to work and they start putting up the foundation of a home, the next step will be that we will have to — as builders and developers — the State of New Jersey will reach out to the venders that supply the carpets, the staircases, the tiles, the roof shingles, the siding for a home, the asphalt driveway, the landscaping and we will start to acquire those goods and pay sales taxes on those goods.
“So as now, the state starts to collect a sales tax revenue, at that point, still, not a single penny — not one penny — of the homebuyers tax credit has gone out.
“Not one penny.
“So now you have income tax and you have sales tax revenue going on and you will now, hopefully, as has been done in the past, stimulate the buying market and people will buy. And if and when they buy, that is when the state will pay its first penny of the housing tax credit.
“So the $33 million doesn’t have to be in hand. It only has to be in hand if someone buys the house.
“In order to buy a house, you have to put people to work.”