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Oliver, Greenwald, Watson Coleman, Schaer, Ramos & Spencer Bill to Restore Vital Tax Credit for Working Poor Released by Assembly Committee

(TRENTON) – Legislation Assembly Democrats Speaker Sheila Y. Oliver, Majority Leader Lou Greenwald, Bonnie Watson Coleman, Gary Schaer, Ruben J. Ramos Jr. and L. Grace Spencer sponsored to restore a vital tax credit for working poor families that was slashed by Gov. Chris Christie was advanced Thursday by an Assembly panel.
The Earned Income Tax Credit is a credit for working poor residents who work and have earned income.
Christie slashed 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-3793) would reverse the cut and restore the program to its previous level of 25 percent beginning in tax year 2013.
Christie has vetoed previous bills to restore the EITC (A-3029 in 2012 and A-4204 in 2011), even while guarding tax breaks for millionaires and offering to restore the EITC in unrelated initiatives, such as his recent rejection of the Democratic bill to raise the minimum wage.
The New Jersey earned income tax credit is a refundable credit intended to “make work pay” by offsetting the burden of taxes for low and moderate income workers.
According to the federal and State data, about 528,000 taxpayers received an average state benefit amount of approximately $430 during tax year 2010, the most recent year for which data are available.
“The last thing working poor families needed was a tax increase, but that’s exactly what they got from Gov. Christie, even as he was protecting tax cuts for millionaires and playing callous politics,” said Oliver (D-Essex/Passaic). “Gov. Christie and Republicans can zealously justify tax cuts for millionaires while saddling poor working families with tax increases, but Democrats won’t give up this fight to do the right thing.”
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.
“The working poor should not be held hostage by Gov. Christie’s political games,” said Greenwald (D-Camden/Burlington). “If Gov. Christie is willing to restore this tax credit as part of unrelated measures, then he should be willing to do it as a stand-alone effort. We have a responsibility to all residents, especially those who work and still struggle to make ends meet. Let’s stop playing games and give these families the resources they need to earn their way out of poverty.”
“New Jersey’s poor working families need financial relief now more than ever,” said Watson Coleman (D-Mercer/Hunterdon). “They don’t need this help held hostage by Gov. Christie because he would rather play theater while continuing to protect tax cuts for the wealthiest New Jerseyans. Families across New Jersey have been forced to do more with less under Gov. Christie. Let’s finally put an end to this charade.”
“This tax credit is based on the federal tax credit, which has been credited with reducing child poverty and increased work incentives,” said Schaer (D-Bergen/Passaic). “It’s unfortunate that the governor would see fit to play games with a tax credit program that has bared such positive results. Denying poor working families financial relief is no way to govern. These families need financial relief and this bill delivers that.”
“It’s painfully clear that poor working families are not a priority for this governor,” said Ramos (D-Hudson). “This tax credit can provide some financial stability to families struggling to keep up with their expenses. These families need our help now, not later, and they need action, not games. It’s time for the governor to accept this bill.”
“These families need our help now, not as part of some political game being played by Gov. Christie,” said Spencer (D-Essex). “Gov. Christie either believes in this successful tax credit program or he doesn’t. It’s time for the governor to do the right thing, fix his mistake and restore this credit. If he doesn’t, then he is simply playing games with the lives of the working poor.”
The bill was released by the Assembly Budget Committee.