A bill sponsored by Assembly Speaker Vincent Prieto and Majority Leader Louis Greenwald to restore a tax credit that strengthens families by encouraging hard work and reducing poverty is now law.
The law (A-4602) increases the state Earned Income Tax Credit (EITC) to 30 percent of the federal credit after years of Christie administration cuts to the successful anti-poverty program. The governor reduced the tax credit to 20 percent of the federal credit from 25 percent in his first budget in 2010, effectively raising taxes on low-income families by $45 million, and failed to restore it in subsequent years.
“The EITC has received strong bipartisan support over the last 40 years, because it is a manifestation of the fundamental idea that hard work should pay off,” said Prieto (D-Bergen/Hudson). “The governor’s action on this issue is the right thing to do, but the right time to do it was years ago. Working people in New Jersey – men and women who want nothing more than to be able to support their families – deserved much better than being reduced to annual victims of the veto pen; Democrats always recognized that. Although we remain disappointed that he has yet to come around on the issue of tax fairness, we welcome the governor finally recognizing it, too.
“For years, Democrats have fought to restore the Earned Income Tax Credit, and for years, Chris Christie has obstructed opportunity for thousands of struggling families to work their way into the middle-class by opposing our efforts. After all, it was Chris Christie himself who originally slashed this critical aid to working families in 2010,” said Greenwald (D-Camden/Burlington). “Unfortunately, Chris Christie’s sudden interest in restoring the EITC is less of a conversion on the road to Damascus than it is a conversion on the road to Des Moines.
“The sad reality is this – whether it is New Jersey’s lagging economic recovery, our skyrocketing property tax burden or our struggling middle class families, Chris Christie’s 2016 presidential ambitions have all too often come at the expense of millions of New Jersey residents.
“So although I welcome Chris Christie’s sudden about-face on the EITC, we have much more work to do in order to reverse the damage our state has suffered as a result of governing by sound bites instead of working for real solutions,” Greenwald added.
Some 528,000 taxpayers received an average state EITC benefit of approximately $430 during FY 2010, according to federal and state data.
Created in 1975 to ease the burden of payroll taxes for the working poor, the federal EITC saw expansion under President Ronald Reagan. As the nation’s largest anti-poverty program, the EITC has substantially reduced child poverty and increased incentives to work.
The measure, signed into law on Tuesday, incorporates changes to the original legislation recommended by the governor in a previous conditional veto.