Friday Facts and Figures is a weekly newsletter with data points, analysis, and commentary on the biggest policy debates in New Jersey and beyond.
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$53 Billion
This past week marked the start of budget season in New Jersey! On Tuesday, Governor Murphy unveiled his proposal for next year’s budget, including increased funding for pre-K-12 schools, another year of the ANCHOR property tax relief program, doubling the Child Tax Credit (though not expanding eligibility), and much more. The $53 billion proposal also includes another full pension payment and a $10 billion surplus, two fiscally responsible moves that should improve the state’s credit rating and protect against the next economic downturn. However, the budget continues to underfund some key areas, and it rests on a shaky foundation as it calls for eliminating the Corporate Business Tax surcharge, robbing the state of critical revenue now and in the future. More on that below. [Politico / Dustin Racioppi]
$1 Billion
Remember last week when we thought that eliminating the Corporate Business Tax surcharge would cost the state $664 million in revenue per year? Now, according to Governor Murphy’s new budget proposal, state officials estimate the tax cut will cost the state much more: a whopping $1 billion in revenue every year. As a reminder, this tax cut would only benefit the wealthiest top 2 percent of businesses in the state — including mega-corporations that are not headquartered in New Jersey like Amazon, Walmart, and Bank of America — meaning that 98 percent of businesses here will see no benefit. [NJ Monitor / Nikita Biryukov]
Price Gouging
The proposed $1 billion corporate tax cut comes at a time of record-breaking corporate profits which — according to new business data presented to the European Central Bank last week — are driven by companies price gouging consumers and using inflation as cover. Still, Governor Murphy defended the tax cut in his budget address, saying that companies will use the proceeds of the tax cut to create new jobs. However, we have 50 years of data that show corporate tax cuts do not trickle down, and we know that promises by corporations to create new jobs often ring hollow, as exemplified by Amazon’s recent move to pause construction at its second headquarters in Virginia despite $750 million in tax credits. [Reuters / Francesco Canepa]
Raids
So why does New Jersey need revenue from the corporate business tax? Because there are so many unmet needs across the state that are desperate for funding. Example A: The governor’s proposed budget continues to raid the state’s Clean Energy Fund, which pays for investments in renewable energy infrastructure and financial assistance for residents and businesses when purchasing clean energy appliances. Example B: The budget proposal once again underfunds NJ Transit, balancing its budget by raiding capital funds to cover operating expenses. The list of underfunded areas goes on, but these two moves, in particular, will threaten New Jersey’s air quality and ability to reach its clean energy goals, as former Senate Majority Leader Loretta Weinberg and Ed Potosnak of the New Jersey League of Conservation Voters outlined in an op-ed published this past Monday. [NJ.com / Steven Rodas]
$1,000
Now for some good budget news: Governor Murphy’s budget proposal calls for eliminating fees for public defenders! Currently, those who need a public defender in New Jersey face state-mandated fees and can pay over $1,000 for legal representation — even if they prove they can’t afford an attorney. These fees, which can influence how clients navigate the justice system and plead in their cases, were exposed in a report by NJPP Policy Analyst Marleina Ubel back in October. “This is a constitutional right that is behind a paywall for some people. I would call on the Legislature to follow through with this,” said NJPP’s Marleina Ubel. [NJ Monitor / Dana DiFilippo]
ICYMI
On Monday, NJPP joined workers and advocates outside the State House to urge lawmakers to oppose cuts to New Jersey’s corporate tax rate. And on Friday, NJPP’s Sheila Reynertson joined Chat Box with David Cruz to break down why lawmakers should make the Corporate Business Tax surcharge permanent. Talk about a busy week! [NJ Spotlight News / David Cruz]
Pets of NJPP
We have a good one this week — and on theme! Meet Violet, Michelle Ancil’s 10-month old kitty who occasionally interns for the New Jersey Alliance for Immigrant Justice. Violet’s favorite snack is a mango slice, and when she’s not napping on top of the fridge, she loves hanging out with her sister Ruby. Meow!
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