Category: Report

Labor Day Snapshot: How New Jersey Can Honor Workers and Improve Economic Security

Posted on by Vineeta Kapahi

To read a PDF version of the full report, click here.

Labor Day is a time to pay tribute to the social and economic achievements of workers and the broader labor movement. This year, essential workers are courageously keeping New Jersey’s economy and communities running despite the current health crisis. Nevertheless, these workers, among others, continue to encounter barriers to economic security and threats to their health and safety. Moreover, the challenges faced by many families as they juggle caregiving and work have become increasingly untenable. These conditions have both highlighted and deepened inequities in our workforce, as workers who are Black, immigrant, and low-income are at disproportionately high risk of exposure to the health and economic harms of COVID-19.[1]

This Labor Day, we examine the state of working New Jersey, with particular attention to the impact of COVID-19 on workers and their families. While the state government has taken several steps to improve wages, benefits, and protections for workers in recent years, including increasing the minimum wage, improving paid leave, and boosting enforcement of worker misclassification,[2] workers in New Jersey continue to face challenging conditions. This brief provides an overview of policies that would further strengthen workers’ rights and promote public health and economic security both during and beyond the current crisis.

Hourly Wage Growth Remains Slow and Uneven

While COVID-19 has created new complications for workers, income inequality was a growing problem long before the onset of the pandemic. One factor driving income inequality is the near stagnation of hourly wages for most New Jersey workers.

From World War II through the 1970s, wages and productivity grew in lockstep, building the middle class. Since the late 1970s, however, the gap between productivity and wages has steadily widened. While productivity has increased, hourly wages for most workers have remained stagnant or grown modestly. Between 1979 and 2016, productivity in New Jersey grew 80.4 percent, while median hourly compensation grew just 25.8 percent.[3]

During the same time, wages of the lowest income earners in New Jersey have remained stagnant. The wages of workers at the 10th percentile — $10.60 an hour in 2019 — have only increased 7 percent (68 cents) in total since 1979, adjusted to inflation. Recent minimum wage increases have since contributed to modest wage growth for some low wage workers, but these have yet to rectify decades of stagnation. For example, wages for the lowest paid workers decreased between 2010 and 2013, but increased when the New Jersey minimum wage increased from $7.25 to $8.25 per hour in 2014.[4] The state’s minimum wage, which has since seen additional increases, rose to $11.00 per hour at the start of 2020 and is scheduled to reach $15.00 an hour by 2024.[5] Median-wage workers in New Jersey have fared only slightly better, with a moderate hourly wage increase of 20 percent ($3.72) since 1979. In contrast, the hourly wages of high wage workers in the 90th percentile have risen much more rapidly, increasing 62 percent ($22.92) between 1979 and 2019.

Graph: Productivity Gains Far Outpace Wage Incerases in New Jersey

Racial disparities in hourly wages have not only persisted over the last four decades, but expanded, as the wages for white workers have increased more rapidly than for Black and Latinx workers. In 2019, the median hourly wage among white workers in New Jersey was $25.85, approximately 1.5 times the median wage among Black ($17.32) and Latinx workers ($17.01). The hourly median wage among Black workers has only increased 6 percent since 1979, and for Latinx workers, just 17 percent. Wages for white workers rose much faster, with a 37 percent increase in median hourly wage during the same period. In addition, while the overall gender wage gap in New Jersey has narrowed since 1979, women continue to earn lower wages than men,[6] and Black and Latinx women earn less than white women.[7]

Unprecedented Unemployment

The COVID-19 crisis has brought about unprecedented levels of job loss and unemployment insurance (UI) claims. From mid-March to mid-August 2020, 1.5 million New Jerseyans filed for UI and the state paid out $4.4 billion in benefits.[8]

Unemployment claims have reduced in recent weeks, but claim levels remain high compared to levels prior to the pandemic. The total amount of unemployment insurance benefits paid to New Jersey workers has plummeted in recent weeks following the late July expiration of the Federal Pandemic Unemployment Compensation (FPUC), which provided a $600 weekly supplement.[9]

While unemployment skyrocketed across all racial and ethnic groups, the economic harms of COVID-19 are not felt evenly among New Jersey workers. Both before and during the COVID-19 pandemic, people of color continue to experience unemployment at a higher rate than white people.[10]

The Census Bureau’s most recent Household Pulse Survey, which is based on data collected between July 16 and July 21, 2020, suggests an even harsher reality than unemployment rates.[11] According to the survey, over half (55 percent) of households in New Jersey report experiencing loss of employment income since March 13, 2020. In addition, young (ages 18-24) and Latinx New Jersey residents experienced income loss particularly high rates. 72 percent of young respondents (ages 18-24) and 71 percent of Latinx respondents reported losing employment income between March 13 and July 21. Further, 30 percent of all households reported that they expect to lose employment income in the following four weeks.

Threats to Worker Health and Safety

Workers on the frontlines of the pandemic response, including those in industries like health care, public transportation, and cleaning services, are often underpaid and lack protections. The impact of inadequate safeguards for workers is clear. In New Jersey’s long-term care facilities alone, 13,368 staff members have contracted COVID-19 and 121 have died.[12] Moreover, workers in frontline industries are more likely to earn low and moderate incomes (less than 200 percent of the poverty line) than the workforce overall.[13] The COVID-19 pandemic has intensified the already challenging circumstances that these workers must navigate.

Many essential workers also face structural barriers to economic security and rights. In New Jersey, women are much more likely to be essential workers than men. While women make up less than half (47.4 percent) of New Jersey’s workforce, 62.5 percent of workers in frontline industries are women. In addition, Black, Latinx, and immigrant workers are disproportionately represented among essential workers, making up a higher percentage of the workers in frontline industries than in the workforce overall. For example, while Black workers make up only 12.4 percent of the overall workforce, nearly 20 percent of workers in frontline industries are Black. [14]

While New Jersey has recently taken steps to strengthen the rights of workers, these protections can only be effective with proper enforcement. In New Jersey, the Division of Wage and Hour Compliance within the Department of Labor and Workforce Development is the primary agency charged with protecting workers by enforcing labor laws.[15]However, a lack of resources in this division hampers enforcement capacity and threatens workers’ rights. While the state’s workforce has increased by 8 percent since 2009, enforcement staff for worker rights protections has not kept pace. Further, workforce standards appropriations have declined by 24 percent. Overall, enforcement funding per worker has declined by 26 percent since 2009, adjusting for inflation. During a pandemic, it is especially important that the state invest adequate resources into enforcing public health and workplace safety laws.

How New Jersey Can Honor Workers and Improve Economic Security

Amid a global pandemic, it is more important than ever to support our workers and those who have lost income. Several policies and programs that would improve safety and wellbeing of workers across the state have already been proposed. Strengthening and clarifying protections and supports for workers will, by extension, will promote the wellbeing of workers’ families and the general public, improving the state’s response to the COVID-19 crisis overall.

Protect Worker Safety

Workers who face unsafe conditions have little recourse and are often met with the difficult decision of risking their income or jeopardizing their health and safety. In the absence of adequate federal mandates, it is critical that the state government provide clear guidelines and strong enforcement to ensure safety in the workplace. In circumstances where adequate safety precautions are not taken, safeguards should be in place to prevent income loss or retaliation against workers. Lawmakers are currently considering several bills that would clarify and improve worker protections during and beyond the COVID-19 pandemic.

Emergency Paid Sick Days (S2453/A4209)

Under current rules, New Jersey employers are not required to allow employees to accrue, use, or carry forward more than 40 hours of earned sick leave in a benefit year. [16] Five days of sick leave is often inadequate, particularly during a public health emergency where workers may need additional sick days to recover from an illness, isolate to prevent spread, or care for a loved one. As a result, many workers are at risk of compromising their own health, or the health of their families and coworkers, to ensure their economic security. By strengthening the ability of workers to use earned sick leave when they need it, lawmakers can better support the health and wellbeing of all New Jersey residents.

Right to Refuse Unsafe Work (A4268)

This proposal would establish a set of standards that employers must follow to ensure that worker health and safety concerns are addressed without fear of retaliation or loss of income. A4628 would also direct the New Jersey Department of Labor to develop a mechanism for identifying and addressing complaints quickly and effectively, including the establishment of a 24/7 hotline.

Good Cause/Right to First Refusal (S2454/A4153)

In most cases, workers who leave a job voluntarily are only eligible for unemployment insurance benefits if their reason for leaving is both directly related to the job and so compelling that it is clear that the worker had no choice but to quit, which is known as “good cause connected with work.”[17] S2454/A4153 would reduce barriers to unemployment insurance by clarifying that workers have the right to receive unemployment benefits under “good cause” if they leave a position conditions that jeopardize health or safety. This proposal would also strengthen worker protections by requiring employers who laid off staff during the public health emergency give those employees right of first refusal for subsequent openings for which they are qualified.

Farmworker Epidemic Health and Safety Act (S2602/A4404)

Farmworkers face unique vulnerabilities to COVID-19 given the nature of the agriculture industry. Nevertheless, the health and safety of these workers are often overlooked, putting them at risk of illness. By ensuring that employers cooperate with the recommended pandemic health and safety protections for farmworkers — including mandating COVID-19 testing, inspecting work and living spaces to ensure compliance with health and safety guidance, and creating mechanisms for informing workers and employers about their rights and responsibilities — lawmakers can better protect the workers who make New Jersey the Garden State.

Executive Order for Pandemic Protections for Essential Workers

In addition to the bills outlined above, an executive order proposed by labor and immigrants’ rights advocates would create new mechanisms for addressing violations of public health and worker safety laws. This executive order would 1) direct the New Jersey Department of Labor to establish a 24-hour “worker rights protections” hotline, 2) deputize COVID-19 safety liaisons to resolve COVID-19 disputes, 3) require essential employers to provide all essential workers with notice of their pandemic protections, 4) mandate training for essential workers and essential employers, and 5) strengthen enforcement of pandemic protection violations. This proposal would protect public health, promote safety, and boost workers’ rights.

Strengthen the Social Safety Net

As more workers face economic insecurity, it is critical that New Jersey fully fund, and remove barriers to, safety net programs, including tax credits targeted to low- and moderate- income households that help New Jerseyans pay for basic needs like food, housing, and childcare. Coupled with a strong minimum wage, strengthening tax credits for workers would better support New Jersey’s households dealing with the effects of unequal and slow wage growth, as well as support the state’s overall economy as we recover from the effects of COVID-19. In addition, ensuring that all workers have access to resources when they lose income is critical to worker wellbeing and economic security.

Earned Income Tax Credit (EITC)

The federal EITC helps low- to moderate-income families make ends meet by boosting their after-tax earnings. New Jersey has its own version of the credit, the NJ EITC, which supplements the federal benefit with a 40 percent match of the federal credit amount.[18] The EITC has been associated with improved health outcomes, educational achievements, and lifetime earning potential.[19] Recipients tend to use the credit to meet short- and medium- terms needs, such as transportation and household supplies, which increases economic activity. The EITC’s narrow eligibility requirements, however, currently exclude many New Jersey workers. The New Jersey Legislature is considering several bills that would address barriers to the state EITC. These bills would:

  • Expand eligibility to childless workers ages 18 to 24 years old (A838/S835),
  • Increase the credit amount from 40 percent to 50 percent of the federal credit over two years (in 2021 and 2022) for all recipients (A841/S836),
  • Increase the credit amount to 100 percent for all childless workers (A839/S765),
  • Enable qualifying relatives to be treated as qualifying children (A840/S764), and
  • Expand the EITC to immigrants who file taxes using an Individual Taxpayer Identification Number (A4229/S2194).

By reducing barriers to the EITC and increasing the credit amount, the program could be a stronger tool for addressing economic insecurity.

Child and Dependent Care Credit

The Child and Dependent Care Credit is a federal tax benefit that helps families cover the costs of caring for qualifying children and adult dependents.[20] In 2018, New Jersey created a state version of the Child and Dependent Care Tax Credit, which is calculated as a percentage of the taxpayer’s federal credit.[21] This credit reduces the amount of New Jersey Gross Income Tax owed; however, it does not result in a refund if no taxes are owed. By making the Child and Dependent Care Tax Credit fully refundable, families could receive a credit regardless of their tax liability, which would enable more children in families with little or no income to benefit from the program.

Address Barriers to Income Replacement and Pandemic Relief

Most New Jersey residents who have been affected by the pandemic have received some relief through federal stimulus checks, unemployment insurance, and other public programs. However, several groups of New Jerseyans have been excluded from many forms of economic relief, including undocumented immigrants and their families, people leaving incarceration, and certain people working in the cash economy. Barriers related to immigration status, for example, have excluded an estimated 686,000 state residents from the CARES Act federal pandemic stimulus checks.[22] New Jersey lawmakers are currently considering a bill that would provide a one-time payment to certain households who were excluded from federal stimulus payments and filed taxes using an Individual Taxpayer Identification Number (S2480/A4171). By providing emergency relief as well as long-term income replacement support to New Jersey residents whose earnings have been impacted by the pandemic, the state can take a step toward a more robust and even recovery from the current crisis.

End Notes

[1] Gould, Elisa and Valerie Wilson. 2020. “Black workers face two of the most lethal preexisting conditions for coronavirus—racism and economic inequality.” Economic Policy Institute. https://www.epi.org/publication/black-workers-covid/; Gelatt, Julie. 2020. “Immigrant Workers: Vital to the U.S. COVID-19 Response, Disproportionately Vulnerable.” Migration Policy Institute. https://www.migrationpolicy.org/research/immigrant-workers-us-covid-19-response

[2] New Jersey Department of Labor. January 20, 2020. “Governor Murphy Signs Sweeping Legislative Package to Combat Worker Misclassification and Exploitation” https://www.nj.gov/labor/lwdhome/press/2020/20200120_missclass.shtml

[3] Economic Policy Institute’s analysis of the Current Population Survey. 2020. “Wages by decile.”

[4] U.S. Department of Labor. “Changes in Basic Minimum Wages in Non-Farm Employment Under State Law: Selected Years 1968 to 2019.” https://www.dol.gov/agencies/whd/state/minimum-wage/history

[5] Rodriguez, Nicole. 2019. “New Jersey’s Minimum Wage Rises to $11.00.” New Jersey Policy Perspective.  https://www.njpp.org/blog/new-jerseys-minimum-wage-rises-to-11-00

[6] Economic Policy Institute’s analysis of the Current Population Survey Outgoing Rotation Group. 2020. “Wage by Gender.”

[7] American Community Survey. 2018. Table S0201: 1-Year Estimates Selected Population Profiles.

[8] https://www.nj.gov/labor/lwdhome/press/2020/20200827_paymentsupdate.shtml

[9] New Jersey Department of Labor. 2020, August 7. “Weekly Unemployment Compensation Plummets After Federal Supplement Expires.” https://www.nj.gov/labor/lwdhome/press/2020/20200827_paymentsupdate.shtml

[10] Williams, Jhacova. 2020. “State unemployment by race and ethnicity.” Economic Policy Institute. https://www.epi.org/indicators/state-unemployment-race-ethnicity/

[11] U.S. Census Bureau. 2020. Week 12 Household Pulse Survey: July 16 – July 21. “Employment Table 1. Experienced and Expected Loss of Employment Income by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp12.html

[12] New Jersey Department of Health. 2020, September 2. NJ COVID-19 Long Term Care Facilities Dashboard. https://www.nj.gov/health/cd/topics/covid2019_dashboard.shtml

[13] Rho, Hye Jin, Hayley Brown, and Shawn Fremstad. 2020. “A Basic Demographic Profile of Workers in Frontline Industries.” https://cepr.net/a-basic-demographic-profile-of-workers-in-frontline-industries/

[14] Rho, Hye Jin, Hayley Brown, and Shawn Fremstad. 2020. “A Basic Demographic Profile of Workers in Frontline Industries.” https://cepr.net/a-basic-demographic-profile-of-workers-in-frontline-industries/

[15] District attorneys, Attorney Generals, and the U.S. Department of Labor also enforce workforce protections.

[16] New Jersey Department of Labor. “NJ State Wage and Hour Laws and Regulations.” https://nj.gov/labor/wagehour/lawregs/nj_state_wage_and_hour_laws_and_regulations.html?_ga=2.266351949.21924739.1598861121-2059223368.1590513585#11D1

[17] New Jersey Department of Labor, Division of Unemployment Insurance. “What if you quit or were fired?”https://myunemployment.nj.gov/before/about/who/quitfired.shtml

[18] New Jersey Department of Treasury. “New Jersey Earned Income Tax Credit”. https://www.state.nj.us/treasury/taxation/eitc/eitcinfo.shtml

[19] Marr, Chuck, Chye-Ching Huang, Arloc Sherman, and Brandon Debot. 2015. “EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds.” Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens?fa=view&id=3793

[20] Internal Revenue Service. “Topic No. 602 Child and Dependent Care Credit.” https://www.irs.gov/taxtopics/tc602

[21] New Jersey Division of Taxation. “Child and Dependent Care Credit (P.L. 2018, c.45).” https://www.nj.gov/treasury/taxation/depcarecred.shtml

[22] Migration Policy Institute. 2020. “Mixed-Status Families Ineligible for CARES Act Federal Pandemic Stimulus Checks.” https://www.migrationpolicy.org/content/mixed-status-families-ineligible-pandemic-stimulus-checks

Does the County Line Matter? An Analysis of New Jersey’s 2020 Primary Election Results

Posted on by Julia Sass Rubin

To read a PDF version of the full report, click here.

This policy brief assesses the impact of New Jersey’s unique primary ballot design, which structures ballots around the county line, on the state’s 2020 primary election outcomes. The brief examines ten primary races – four Democratic and four Republican contests for the U.S. House of Representatives and the Democratic and Republican contests for the U.S. Senate. The results suggest that structuring ballots around the county line impacts election outcomes by steering voters towards specific candidates. The county line also increases voter confusion, contributing to overvotes and undervotes. The impact of the county line appeared to be greatest in races that did not involve an incumbent. Candidates’ share of the vote varied by as much as 50 percentage points, based on whether or not they were on the county line.

Background

New Jersey primary ballots are unlike those of any other state. Other states organize their primary ballots around the electoral position being sought, such as Senator or Governor, with candidates listed beneath or immediately to the right of each electoral position. [1] This makes it easy for voters to determine which candidates are running for each office. In contrast, nineteen of New Jersey’s twenty-one counties organize their primary ballots around a group of candidates endorsed by either the Democratic or Republican Party. These groups of county party endorsed candidates are referred to as the “county line” or the “party line,” because they are presented on the ballot as a vertical or horizontal line of names, with a candidate included for every office. The county line generally receives prime location in one of the first columns or rows on the ballot. Candidates not on the county line are placed in other columns or rows, sometimes far away from the county line candidates.

Figure 1 shows a 2020 New Jersey Democratic primary ballot from Monmouth County. The seven county line candidates are in column one. The remaining six candidates are scattered across the other four, mostly empty, columns. There is no obvious logic as to why each of the non-endorsed candidates is in a particular column. Column two includes a candidate for the U.S. Senate and two candidates for County Freeholder. Column three includes a candidate for President and his delegates. Columns four and five each include a single candidate for the U.S. House of Representatives.

Monmouth 4th District Dem Primary BallotFigure 1: Monmouth County 4th Congressional District 2020 Democratic primary ballot.

This ballot design encourages voters to pick the candidates on the county line because they are easy to find and visually distinct. The county line is further advantaged by the placement of better-known candidates, such as those running for President, U.S. Senator, or Governor, at the top of the line and the inclusion of candidates for most or all of the offices on the ballot.

Designing primary ballots in this way violates important rules of good ballot design. Most critically, spreading candidates across multiple columns or rows and placing extra columns or rows between them, makes it much harder for voters to determine which candidates are running for each office. This results in voters not realizing that some positions are contested or, conversely, disqualifying their vote by mistakenly voting for too many candidates for a given position.[2]

A recent Communications Workers of America (CWA) analysis suggests that the county line has a significant impact on voter behavior. CWA found that no state legislative incumbent on the line had lost a primary election in New Jersey between 2009 and 2018.[3] Although incumbents generally win reelection, that advantage is rarely so absolute. In New York State, for example, twenty-two state legislative incumbents lost primary elections through 2018 and additional ones lost in 2020.

The county line may provide a substantial electoral advantage in congressional elections as well. Only two congressional incumbents have lost a primary in New Jersey in the last fifty years. In both cases, they lost to other incumbents, following redistricting that eliminated one of their districts. And, in both cases, the incumbent who won the primary had also received the party endorsement and the county line in the county that decided the election.[4]

The 2020 primary provides a unique opportunity to evaluate the impact of the county line on election outcomes. Historically, most New Jersey residents have voted on election day, using voting machines. In 2020, with New Jersey an epicenter of the COVID-19 outbreak, Governor Phil Murphy issued an executive order for the primary election to be conducted by mail. Voters also could vote at a limited number of polling places on election day using provisional paper ballots, or, if the voter was disabled, on an ADA-accessible voting machine.

As a result of the Vote-By-Mail directive, voters in three counties that usually vote using a machine ballot that is organized around the county line (Hunterdon, Passaic, and Warren) instead received paper ballots that resembled those used in other states, with candidates listed beneath the position they were seeking. This increased the number of counties using such ballots to five out of twenty-one for the Democratic primary and six out of twenty-one for the Republican primary, creating an opportunity to compare how candidates performed in congressional districts that included those counties.[5]

The 2020 primary also had a large number of contested races. In a few of those races, the county party organizations endorsed and awarded the county line to different candidates. This created an additional opportunity to examine the impact of the county line on electoral outcomes.

Democratic Party Primary Results

In the Democratic primary, four congressional districts and the U.S. Senate race were contested and included some counties that did not structure their primary ballots around a county line or county parties within the congressional district endorsing different candidates.

2nd Congressional District

Amy Kennedy won all eight counties in the 2nd Congressional district. However, Kennedy received a higher percentage of the vote in the three counties where she had the county line or no one had the county line than in the five counties where her opponent Brigid Harrison had the county line (see Figure 2).

Kennedy received 75% of the vote in Atlantic County, where she had the county line, and 50% of the total vote in the five counties where Brigid Harrison had the county line, a difference of 25 percentage points. Kennedy received 67% of the vote in Ocean County, where no candidates were endorsed or awarded the county line, and 63% of the vote in Salem County, where Brigid Harrison had the county party’s endorsement, but the primary ballot is not structured around the county line.

Figure 2: 2nd Congressional District Democratic Primary. Does not include Francis and Turkavage, who received < 3% of the vote.

Figure 2: 2nd Congressional District Democratic Primary. Does not include Francis and Turkavage, who received < 3% of the vote.

This contest highlighted another aspect of how the county line may impact voter behavior. In Atlantic County, the number of valid votes cast for the U.S. Senate was substantially lower than the number cast for President (81%) or the House of Representatives (82%). In every other county, the total votes for U.S. Senate exceeded the number cast for the U.S. House of Representatives and equaled at least 97% of the total votes cast for President.

A likely explanation for Atlantic County’s unusual results is that U.S. Senator Cory Booker, whose reelection was endorsed by all twenty-one county parties, chose not to appear on the county line for the Second Congressional District’s Atlantic and Ocean County ballots. Instead, Booker bracketed with Brigid Harrison, who did not have the county line in either county (see Figures 3 and 4 for Atlantic and Ocean Democratic primary ballots for the 2nd Congressional District). Many Democratic voters, used to marking their ballots for everyone on the county line, may not have realized that the Atlantic County line did not include a candidate for U.S. Senate, or they may not have known that they could vote for candidates who are not on the county line.

2020 Atlantic County Democratic Ballot Congressional District 2Figure 3: Atlantic County 2nd Congressional District 2020 Democratic primary ballot.

Figure 4: Ocean County 2nd Congressional District 2020 Democratic primary ballot.Figure 4: Ocean County 2nd Congressional District 2020 Democratic primary ballot.

Ocean County did not experience a similar drop in votes for U.S. Senate. This may reflect the fact that Ocean County voters had to select candidates off the county line for both the U.S. Senate and House of Representatives races, making the county line less visually dominant on the Ocean County ballot and signaled to voters that voting off the line was a legitimate option. In contrast, Atlantic County voters did not have to vote off the county line for any office except the U.S. Senate.

4th Congressional District

Christine Conforti and Stephanie Schmid split endorsements in the 4th Congressional District. Conforti receiving the party endorsement in Mercer County and Schmid received the party endorsements in Monmouth and Ocean Counties. Mercer County Democratic party bylaws allow all candidates that receive at least 40% of the vote at the party’s endorsement convention to appear on the county line. This resulted in both Conforti and Schmid being included on the Mercer County line. Conforti received a larger percentage of the convention votes and the endorsement, so she was listed first (see Figure 5).

Figure 5: Mercer County 4th Congressional District 2020 Democratic primary ballot.Figure 5: Mercer County 4th Congressional District 2020 Democratic primary ballot.

Conforti won Mercer County, receiving 57% of the vote. Schmid won Monmouth and Ocean Counties, receiving 70% and 77% of the vote, respectively. Conforti received 57% of the vote when she was first on the county line and 21% of the total vote in the two counties where Schmid was on the county line, a difference of 36 percentage points. Schmid received 72% of the total vote in Monmouth and Ocean Counties, where she was the only congressional candidate on the county lines, and 32% in Mercer, where her name appeared below Conforti’s — a difference of 40 percentage points (see Figure 6).

Figure 6: 4th Congressional District Democratic Primary.

Having two candidates on the line in Mercer County also confused voters, leading to a substantial overvote. More than 32% of those who voted in the 4th Congressional District’s Democratic primary for the House of Representatives selected both Conforti and Schmid, resulting in their votes being discarded. Neither Monmouth nor Ocean Counties experienced substantial overvotes, and the number of votes cast for the House of Representatives in both counties closely mirrored those for the U.S. Senate and President. The likely explanation for the Mercer overvotes is that voters, conditioned to select everyone on the county line, marked their ballots for both Conforti and Schmid rather than voting for just one of them, as the ballot instructed them to do.

5th Congressional District

Congressperson Josh Gottheimer was endorsed by all four counties that make up the 5th Congressional District. Gottheimer received 67% of the votes in Bergen County, which structured its ballots around the county line, and 64% of the combined votes in Passaic, Sussex and Warren Counties, which did not use a county line, a difference of 3 percentage points (see Figure 7).

Figure 7: 5th Congressional District Democratic Primary.Figure 7: 5th Congressional District Democratic Primary.

9th Congressional District

Congressperson Bill Pascrell was endorsed by all three counties in the 9th Congressional District. Pascrell received 84% of the vote in Passaic County, which did not use the county line on its ballots, and 78% of the combined vote in Bergen and Hudson Counties, which used the county line (see Figure 8). Pascrell has consistently received a larger share of the vote in Passaic than in Bergen or Hudson Counties since he was first elected to represent the 9th Congressional District, following the 2010 redistricting. Pascrell’s 2020 primary performance is actually the lowest percentage of the Passaic vote that he has received in that decade.[6] It is also the only time during that decade that a majority of Passaic voters did not use a county line ballot.

Figure 8: 9th Congressional District Democratic Primary.

U.S. Senate

Senator Cory Booker was endorsed by all 21 counties in the Democratic U.S. Senate primary. He received 88% of the combined vote in the fourteen counties where he was on the line, 86% of the combined vote in the five counties that did not use a county line, and 85% of the combined vote in the two counties that had a line but Senator Booker chose not to be on it (see Figure 9). Booker’s share of the vote ranged from 85% to 91% when he was on the line and from 84% to 88% when a county did not use a line. In the two counties where Booker chose not to be on the line, he received 81% of the vote in Atlantic County and 87% in Ocean County.

Figure 9: U.S. Senate Democratic Primary.

Republican Primaries

In the Republican primary, four congressional races and the U.S. Senate race were contested and included either counties that did not structure their primary ballots around a county line or county parties within the district endorsing different candidates. Being on the county line was associated with differences of more than ten percentage points in all five races and as much as 50 percentage points in the U.S. Senate race.

2nd Congressional District

In the 2nd Congressional District, Jeff Van Drew won the endorsement and the primary in all eight counties. He received 83% of the total vote in the seven counties that used the county line on their ballots and 70% of the vote in Salem County, which did not use the county line (see Figure 10).

Figure 10: 2nd Congressional District Republican Primary.Figure 10: 2nd Congressional District Republican Primary.

3rd Congressional District

Two candidates vying for the Republican nomination in the 3rd Congressional District split the Republican party endorsements in the counties that make up that district. Kate Gibbs was endorsed and given the line by Burlington County and David Richter was endorsed and given the line by Ocean County. Gibbs received 56% of the vote when she was on the county line and 22% when she was not, for a difference of 34 percentage points.  Richter received 78% of the vote when he was on the county line and 43% when he was not, for a difference of 35 percentage points (see Figure 11).

Figure 11: 3rd Congressional District Republican Primary.Figure 11: 3rd Congressional District Republican Primary.

5th Congressional District

Four candidates competed in the 5th Congressional District, with two splitting the endorsements. John McCann was endorsed and given the county line by Bergen County. Frank Pallotta was endorsed by Passaic, Sussex and Warren Counties, none of which used the county line. McCann won Bergen County, with 45% of the vote, while Pallotta won the three remaining counties, with 62% of the total vote.

McCann received 45% of the vote when he was on the county line and 18% of the total vote when Pallotta was endorsed but there was no county line, for a difference of 27 percentage points. Pallotta received 62% of the total vote when he was endorsed but there was no county line and 41% of the vote when McCann had the county line, for a difference of 21 percentage points.

Figure 12: 5th Congressional District Republican Primary.

7th Congressional District

Three candidates competed in the 7th Congressional District race. Tom Kean Junior received the endorsement of the six counties that make up the district and won all of them. Three of those counties (Essex, Somerset and Union) structured their ballots around the county line and three (Hunterdon, Morris and Warren) did not. Kean received 86% of the total vote in Bergen, Somerset and Union, the three counties for which he had the line. He received 72% of the total vote in Hunterdon, Morris and Warren, the three two counties that did not use the line, for a difference of 14 percentage points.

Figure 13: 7th Congressional District Republican Primary.Figure 13: 7th Congressional District Republican Primary.

U.S. Senate

Five candidates competed for the Republican nomination in the U.S. Senate race, with two of them splitting the endorsements. Hirsh Singh was endorsed by four counties, all of which structured their ballots around the county line. Rikin Mehta was endorsed by seventeen counties, eleven of which structured their primary ballots around a county line.

Singh won the four counties in which he was on the line and Mehta won the eleven counties in which he was on the line. Singh received 73% of the total vote when he was on the county line and 23% when Mehta was on the county line, a difference of 50 percentage points. Mehta received 50% of the total vote when he was on the county line and 9% when Singh was on the county line, a difference of 41 percentage points.

Mehta received 35% of the total vote in the six counties that endorsed him but did not use a county line, a reduction of 15 percentage points relative to his performance on the line. Mehta also lost three of those six counties — losing Salem and Warren to Singh and Passaic to Flanagan.

Figure 14: U.S. Senate Republican Primary.Figure 14: U.S. Senate Republican Primary.

Findings

These ten primary contests differ from each other in the counties they encompass, their ballot designs, and their levels of incumbency. This variability makes it challenging to generalize from any individual contest. However, the data does point to three overarching trends:

Being on the county line appears to provide candidates with an advantage.

Candidates performed better when they were included on the county line than when they were not, in nine of the ten contests. The most substantial difference in performance was in the four contests in which different candidates were on the county line in different counties in the same congressional district (see Figure 15). In those four contests, the average vote margin between appearing on the county line and having your opponent on the county line was 35 percentage points.

The only contest in which a candidate did not perform better when on the county line was the Democratic primary in the ninth Congressional District. In that race, Congressperson Bill Pascrell received a higher percentage of the vote in Passaic County, which did not use a county line ballot, than he did in Bergen and Hudson Counties, which used county line ballots. However, the 84% of the vote that Pascrell received in Passaic County was his worst performance in that County since he began representing the ninth Congressional District in 2012. This is also the only primary during that decade for which the ballots used by the majority of Passaic’s voters were not structured around a county line.

Incumbents appear to receive a smaller advantage from the county line than non-incumbents.

These ten primaries do not allow for a comparison of how incumbents perform on the county line versus non-incumbents on a different county line, as incumbents received all the endorsements for which they were eligible. However, there were four races in which incumbents were on the county line in some counties but not in others, and two such races for non-incumbents. The advantage from being on the county line in those contests was an average of three percentage points for incumbents and fifteen percentage points for non-incumbents.

County line ballots appeared to contribute to voter confusion, resulting in substantial overvotes and undervotes.

This pattern is evident in both the Democratic CD2 primary, in which almost 20% of voters did not cast a vote for the U.S. Senate, and in the Democratic CD4 primary, in which more than 32% of the voters selected too many candidates for the House of Representatives. In both cases, the disenfranchisement of large numbers of voters is likely the result of the county line. In CD2, Cory Booker’s decision to bracket off-line may have led to voters not realizing the county line did not include a Senate candidate or not knowing that they could vote for candidates not on the county line. In CD4, the inclusion of two candidates for the House of Representatives on the county line led to almost a third of those who voted selecting both candidates and disqualifying their votes. These examples strongly suggest that New Jersey primary voters are conditioned to vote the county line and highlight how powerful the county line is in shaping voter behavior.

Figure 15: Impact of the county line.Figure 15: Impact of the county line.

End Notes

[1] Julia Sass Rubin (2020). Toeing the Line: New Jersey Primary Ballots Enable Party Insiders to Pick Winners. NJ Policy Perspectives. June. https://njppprevious.wpengine.com/reports/toeing-the-line-new-jersey-primary-ballots-enable-party-insiders-to-pick-winners

[2] Andrea Cordova McCadney, Lawrence Norden and Whitney Quesenbery (2020, February 3) Common Ballot Design Flaws and How to Fix Them, The Brennan Center. https://www.brennancenter.org/our-work/research- reports/common-ballot-design-flaws-and-how-fix-them

[3] Francisco Diez, The Likely Advantages of the Line, Communication Workers of America analysis, July 29, 2019.

[4] In 2012, incumbent Congressperson Steve Rothman was defeated by incumbent Congressperson Bill Pascrell in the 9th Congressional District primary, after Rothman’s district was eliminated following redistricting. Rothman and Pascrell split endorsements, with Rothman endorsed and on the county line in Bergen and Hudson and Pascrell endorsed and on the county line in Passaic. The turnout in Passaic substantially exceeded that of the two other counties and Pascrell received 90% of that vote, giving him the victory. In 1972, incumbent Congressperson Cornelius E. Gallagher was defeated by incumbent Congressperson Dominick Daniels, after being redistricted from the 13th to the 14thCongressional district. The district was located in Hudson County and the Hudson Democratic party endorsed Daniels in the primary.

[5] Salem and Sussex Counties do not structure their ballots around the county line for either Democratic or Republican primaries and Morris County does not structure its ballots around the county line for the Republican primaries.

[6] In 2012, Pascrell received 90% of the vote in Passaic versus 27% and 26% in Bergen and Hudson Counties, respectively, both of which endorsed his challenger. Pascrell did not have a primary challenger in 2014 or 2016. In 2018, he received 88% of the primary vote in Passaic County versus 70% in Bergen and 81% in Hudson Counties. Pascrell has been an elected official in Passaic County for forty years.

School Funding in New Jersey: Preparing Now for the 2020-21 School Year

Posted on by Mark Weber

To read a PDF version of the full report, click here.

Summary

Safely re-opening schools amidst a global pandemic is an expensive proposition. Re-opening plans require social distancing, which means smaller classes that may require staggered schedules, additional transportation, and rethinking and reorganizing the use of school spaces. School districts will also need to enhance their on-site health services, ensure safe and clean facilities, and upgrade their ability to teach remotely if it becomes necessary to do so again. Unfortunately, this crisis comes on the heels of a decade of disinvestment in New Jersey’s education system. New Jersey schools have not recovered financially since before the last recession; this is especially true for those serving the state’s low-income and Black and Latinx children. This brief illustrates the effects of the decade of disinvestment and provides recommendations for an equitable path forward. Put bluntly: safe and effective schools will cost more, not less, than in the past. The good news is that New Jersey can afford to make the required investments.

The COVID-19 Pandemic Will Drive Up Costs to Reopen Schools

As of this writing, the beginning of New Jersey’s 2020-21 school year is about one month away. Late in June, the state released its reopening plan for schools, which declares: “…absent a shift in the public health data, school buildings will open in some capacity for in-person instruction and operations in the Fall.”[1] While the state has since declared fully remote instruction will remain an options for students, there is still clearly pressure on the state and its school districts to return to some level of normalcy in K-12 education. The social and emotional well-being of children, the careers of working parents, and the future of New Jersey’s economy all depend greatly on how and when students return to school.

The state plan requires local districts to develop their own plans based on a series of “anticipated minimum standards.” What the plan does not do, however, is make any attempt to estimate the fiscal impact on districts to meet those standards, nor lay out any proposals for either districts or the state to raise additional revenues to cover these new costs. Yet stakeholders can be certain that reopening schools will require a substantial influx of resources. As the authors of this brief have noted elsewhere:

Much smaller class sizes will be required to meet social-distancing guidelines and contain the spread of the coronavirus; this, in turn, will require hiring additional personnel, finding new classroom space, and perhaps creating staggered schedules. It will mean more instructional hours for teachers, more staff hours spent cleaning and sanitizing facilities, and more complicated bus routes. Schools will have to budget for additional time and effort from maintenance and operations staff, food service workers, and other support positions. Nursing and other medical services — already inadequate in many schools (Willgerodt, Brock, & Maughan, 2018) — will need to be improved. And, to ensure equitable internet access, districts will have to redouble their investments in broadband and portable computers. Finally, since learning losses due to this spring’s school closures are likely to be most severe for students who live in poverty (Herald, 2020; Rothstein, 2020), schools in low-income neighborhoods will face especially daunting challenges come September. In short, we can expect the costs associated with reopening schools to be significantly greater this fall than in previous years, particularly in high-poverty schools and districts.[2]

In short, if New Jersey is to re-open its schools safely, it must plan to spend much more than it has in the past. This problem, however, is made worse by a difficult fact: even before the pandemic, too many of New Jersey’s school districts didn’t have the resources they needed to provide their students with an adequate education.

School Funding Never Recovered from the Last Recession

Prior to the Great Recession of 2009, New Jersey was a leader in school funding reform. Policies made in the wake of the Abbott series of rulings on school funding cases drove substantial amounts of new funding toward some of the state’s most underfunded school districts. Unfortunately, the state has since retreated in its efforts to fund schools; the percentage of New Jersey’s economy devoted to school funding has declined sharply since 2009, leaving fewer revenues available to the state’s districts.

These cuts in state effort have not been borne evenly; the school districts enrolling the highest-poverty students have suffered the greatest cuts. Years of research show that when high-poverty districts spend more money, they can help close the opportunity gap for children in those districts.[3] In 2009, the state, recognizing this reality, passed the School Funding Reform Act (SFRA), which sets minimal adequacy targets for spending, including additional funding for districts with high concentrations of economically disadvantaged students. But the state has never fully funded the law; consequently, more and more students are enrolled in districts that, by the state’s own standards, are underfunded. Last year, over 100,000 students attended schools in districts where this spending gap was greater than $5,000 per pupil. (For context: average budgeted cost per pupil in 2018-19 was $16,599.)[4]

Analysis of these districts reveals a disturbing trend: many are districts enrolling large proportions of students of color, particularly Latinx students. Neither the pandemic nor the ensuing economic collapse should be used as an excuse to allow these districts to continue operating without the funding the state’s own law says they need.

Ensure the Wealthiest Taxpayers Pay Their Fair Share to Help Fund New Jersey’s Schools

Ideally, New Jersey (and all other states) should be receiving a sizeable school aid package from the federal government, which has advantages over states in being able to raise large amounts of tax revenues and/or borrow large sums at historically low rates. But New Jersey’s education policymakers have to be realistic; given the current political climate and federal administration, it is quite possible that federal aid will not be forthcoming in the next several months.

New Jersey, therefore, must raise additional revenues on its own. It is worth noting that while complaints about high taxes are a regular feature of the state’s political debates, New Jersey is not a high-tax outlier: it ranks 31st in the nation on own-source revenues (the revenues the state raises itself, rather than those transferred by another government), and eighth in the nation on state and local taxes as a percentage of income.[5] For school funding, there are two approaches to raising taxes that the state can use concurrently. First, New Jersey should raise income tax rates on its wealthiest residents. New Jersey’s taxes are less regressive than many of its neighbors, but its wealthiest residents still pay effective rates lower than those of middle-class taxpayers.

Second, New Jersey can suspend sending state aid to its most affluent school districts – the districts that have greater property wealth and, therefore, are more able to raise revenues themselves through local property taxes. Some state aid for special education, for example, automatically goes to more affluent districts, regardless of those districts’ ability to raise local revenues for schools. Certainly, spending on special education should not be cut in any district without good reason; however, if fiscal realities require cutting state aid, New Jersey should target the aid flowing to these high-capacity districts, and allow those districts to raise local taxes if needed to replace that aid. This policy should also extend to other types of categorical aid that are allocated outside of the adequacy formula, including transportation, security, and school choice aid.

School Funding After the Pandemic

In the coming months, the authors of this brief will further explain how New Jersey should change its current school funding system to better meet the needs of its students during and after the current health crisis. Reforms should include: recalibrating the state’s funding formula to meet new standards; using valid methods to address within-district funding inequities; basing state aid cuts on district budgets, and not aid allocations, and; maintaining and enhancing the features of SFRA that promote funding progressiveness. Until then, New Jersey lawmakers must act immediately to provide districts with the funding they need to open safely this fall.

End Notes

[1] The Road Back: Restart and Recovery Plan for Education. New Jersey Department of Education. https://nj.gov/education/reopening/

[2] https://kappanonline.org/school-funding-covid-19-baker-weber-atchison/

[3] Baker, B. D. (2017). How Money Matters for Schools. Learning Policy Institute. https://learningpolicyinstitute.org/product/how-money-matters-report

[4] https://www.nj.gov/cgi-bin/education/csg/19/csggrsum.pl?string=L.%20ALL&maxhits=10000

[5] Annual Survey of State and Local Government Finances, 1977-2017. Compiled by the Urban-Brookings Tax Policy Center. Washington, DC: Urban-Brookings Tax Policy Centers (2017). Date of Access: (11-Dec-2020).

Building a More Immigrant Inclusive Tax Code: Expanding the EITC to ITIN Filers

Posted on by Vineeta Kapahi

To read a PDF version of the full report, click here.

The Earned Income Tax Credit (EITC) is a proven tool for addressing racial disparities in pay and supporting the economic security of low- and moderate-income adults and their families.[1] Claimed when people file income tax returns, this refundable credit increases households’ after-tax income. New Jersey, along with 28 other states,[2] offers a state version of the EITC. The New Jersey EITC supplements the federal program and is calculated as a percentage of the federal EITC.[3] By boosting the wages of low paid workers, the state and federal EITC programs help New Jerseyans better afford their basic needs, improve health and educational outcomes,[4] and strengthen state and local economies.[5]

The EITC’s narrow eligibility requirements exclude certain groups, including immigrants who file taxes without a Social Security Number.[6] As a result, many immigrants are ineligible for this important program, even if they pay taxes using an Individual Taxpayer Identification Number (ITIN). Extending eligibility for the state’s EITC to include ITIN holders would make the program more inclusive and increase its impact, allowing the credit’s benefits to reach more New Jersey families and communities. This simple change to the program’s eligibility would help more New Jerseyans make ends meet and infuse more money into the economy as the state recovers from the ongoing COVID-19 pandemic.

The Tax Code Can Better Address Racism and Anti-Immigrant Bias

A history of systemic racism in the United States has shaped policymaking and access to economic opportunity, resulting in massive inequities in the distribution of wealth.[7] Consequently, tax policy has disparate impacts across racial lines. The tax code can be a tool for addressing these disparities; however, many tax provisions instead reinforce or exacerbate inequities.[8]Income derived from work, for example, is taxed at a higher rate than income derived from capital gains, which disproportionately benefits wealthy households.[9] The EITC functions in the opposite manner, benefiting low- and moderate-income tax filers, who are disproportionately people of color.

While racial inequity has always been embedded in the U.S. tax code and immigration system, the Trump administration’s policies are exacerbating economic exclusion. The Tax Cut and Jobs Act of 2017, for example, made changes that widen racial and wealth disparities by giving disproportionate tax breaks to high wealth households,[10] including corporate, individual income, and estate tax rate reductions, as well as a new tax break for pass-through business income.[11] The law failed to provide comparable improvements for low- and moderate-income households and created new barriers for immigrants who do not have a Social Security Number (SSN). For example, the law reduced the Child Tax Credit,[12] which helps working families with children under 17 offset the cost of raising children, for families who file taxes with an ITIN.

To rectify these racial inequities in the tax code, lawmakers could choose to raise revenue in a progressive manner and make strategic investments that support households with the greatest need. New Jersey lawmakers could also improve equity in the state tax code by eliminating or reducing tax expenditures (exclusions, deductions, deferrals, and credits) that benefit wealthy households.[13] Strengthening programs that benefit low- and moderate-income households, such as New Jersey’s EITC, is another step that lawmakers can take to reduce racial and wealth disparities in the state tax code.

Federal EITC Eligibility Requirements Exclude ITIN Filers

In order to qualify for the federal EITC, a taxpayer, their spouse, and any qualifying children claimed as dependents must have a Social Security Number (SSN).[14] This undermines the reach of the EITC in New Jersey, as an estimated 225,000 residents live in households that file taxes using an ITIN,[15]which is a tax processing number used by tax filers who are not eligible for a SSN.[16] Tax filers who use an ITIN include undocumented immigrants, as well as a small number of other immigrants, such as certain students, professors, and researchers with non-immigrant visas; spouses and family members of people with certain employment visas; and some survivors of trafficking, domestic violence, or other serious crimes.[17][18] These immigrants not only pay income taxes, but they also pay sales taxes at the counter like all other New Jersey residents. In addition, ITIN filers pay property taxes, either directly as property owners or by supporting their landlord’s payments of property taxes as renters. In fact, undocumented immigrants in New Jersey contribute nearly $600 million in state and local taxes each year.[19]

Despite their important contributions as workers, business owners, taxpayers, and community members, ITIN holders are systematically excluded from many of the programs available to other New Jersey residents. In addition to the federal EITC, ITIN filers and their families have been excluded from many public benefits as well as stimulus payments under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.[20]

Like most states, New Jersey’s EITC adopts the same eligibility criteria as the federal EITC, and thus excludes ITIN filers.[21] Legislation to address this barrier to the state EITC has been introduced in both the New Jersey Senate and General Assembly.[22] This policy would follow the lead of several other states that have taken steps to eliminate the discriminatory eligibility requirements in the EITC. Expansion of the EITC to include ITIN filers has already been enacted in California (for parents with at least one child under six years old) and in Colorado.[23] Similar eligibility expansions have also been proposed in New Mexico,[24] Oregon,[25] and Washington.[26] New Jersey can join these states in addressing an important barrier to the federal EITC by extending the state version of the credit to include ITIN filers.

Extending EITC Eligibility is a Step Toward a More Inclusive Tax Code

Because undocumented immigrants are disproportionately people of color,[27] removing the SSN requirement of the New Jersey EITC would improve racial equity in the tax code and promote the economic security and well-being of thousands of New Jersey’s immigrant households. Rather than further straining low- and moderate-income immigrants and their families, New Jersey can harness the existing ITIN and EITC systems to help those who need it.

An estimated 77,650 ITIN returns filed in New Jersey meet all eligibility criteria for the EITC except for the SSN requirement. Assuming that participation rates are comparable to the EITC for New Jersey residents, eliminating the SSN requirement would result in an estimated 54,100 of these newly eligible ITIN holders receiving the EITC.[28]  

Chart: Expanding the EITC to ITIN filers would boost the wages of thousands of families and stimulate New Jersey's economy

Expanding the EITC program eligibility to include ITIN filers would add, on average, approximately $1,000 to these households’ earnings.[30] Beyond support for hardworking New Jerseyans and their families, making the state EITC more inclusive toward immigrants would provide a $55 million[31] boost to state and local economies, as newly eligible EITC claimants spend the credit at local business and increase economic activity. Some of these funds will even come back to the state in the form of sales tax and other government revenues[32].

In the absence of a federal EITC for ITIN filers, lawmakers should consider providing a credit comparable to what other low wage New Jerseyans receive. Going beyond the state EITC, if New Jersey matched the EITC amount that ITIN filers would receive if they were eligible for the federal credit, the state could add $151 million to state and local economies and allow families to cover more of their basic needs.[33] Providing ITIN filers with both the full federal and state credit amount that other New Jersey workers receive would provide more meaningful support for these households and add $206 million to state and local economies.[34]

Strengthening New Jersey Families and Economies

Excluding immigrants who file taxes using an ITIN from the EITC pushes households who are struggling to make ends meet further behind and hurts New Jersey’s state and local economies. There are approximately 140,000 households in New Jersey who file taxes using an ITIN, with over 225,000 people in these households, of which 85,560 (38 percent) are children.[35] Boosting the after-tax incomes of these low- and moderate- income households would have both short- and long-term benefits for the children in families and communities that receive the credit, as the EITC has been associated with improved health outcomes, educational achievements, and lifetime earning potential.[36]

As recipients of the EITC use the credit to meet short- and medium- term needs, such as utility bills, household supplies, and vehicle repairs, removing discriminatory barriers to the credit would increase economic activity and support businesses as they recover from the current crisis. Including ITIN holders in the EITC would not only promote equity by directly supporting households who need it – it would also strengthen the broader New Jersey economy.

End Notes

[1] Huang Chye-Ching and Roderick Taylor. 2019. “How the Federal Tax Code Can Better Advance Racial Equity.” Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/how-the-federal-tax-code-can-better-advance-racial-equity

[2] Urban Institute. 2020. “State Earned Income Tax Credits” https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/state-earned-income-tax-credits  

[3] New Jersey Department of the Treasury. New Jersey Earned Income Tax Credit.  https://www.state.nj.us/treasury/taxation/eitc/eitcinfo.shtml

[4] Marr, Chuck, Chye-Ching Huang, Arloc Sherman, and Brandon Debot. 2015. EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens?fa=view&id=3793

[5] Avalos, Antonio and Sean Alley. 2010. The economic impact of the Earned Income Tax Credit (EITC) in California. California Journal of Politics and Policy, 2(1): 1-25. https://doi.org/10.2202/1944-4370.1096

[6]  Internal Revenue Service. Earned Income Tax Credit (EITC). https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit

[7] Huang Chye-Ching and Roderick Taylor. 2019. “How the Federal Tax Code Can Better Advance Racial Equity.” Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/how-the-federal-tax-code-can-better-advance-racial-equity

[8] Tax Policy Center and the Urban Institute. 2020.. Racial Disparities and the Income Tax System. https://apps.urban.org/features/race-and-taxes/

[9]  Huang Chye-Ching and Roderick Taylor. 2019. “How the Federal Tax Code Can Better Advance Racial Equity.” Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/how-the-federal-tax-code-can-better-advance-racial-equity

[10] Institute for Taxation and Economic Policy. “TCJA By the Numbers, 2020”  https://itep.org/tcja-2020/

[11] Huang Chye-Ching and Roderick Taylor. 2019. “How the Federal Tax Code Can Better Advance Racial Equity.” Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/how-the-federal-tax-code-can-better-advance-racial-equity

[12] Ibid.

[13] Further information about these strategies for improving tax equity can be found in the following reports:

Reynertson, Sheila. 2020. “Road to Recovery: Reforming New Jersey’s Income Tax Code”. New Jersey Policy Perspective. https://www.njpp.org/budget/road-to-recovery-reforming-new-jerseys-income-tax-code

Reynertson, Sheila. 2020. “The COVID-19 Crisis Proves the Point: New Jersey Needs More Revenue to Support Workers, Families, and Businesses.” New Jersey Policy Perspective. https://www.njpp.org/budget/the-covid-19-crisis-proves-the-point-new-jersey-needs-more-revenue-to-support-workers-families-and-businesses

[14] Internal Revenue Service. “Do I Qualify for the EITC?” https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/do-i-qualify-for-earned-income-tax-credit-eitc

[15] Institute for Taxation and Economic Policy. 2020. “Estimated Number of Adults & Children in ITIN Households based on IRS 2015 ITIN Market Segment SPEC Returns Database.” This analysis is unpublished, but can be made available upon request.

[16] Internal Revenue Service. “Individual Taxpayer Identification Number.” https://www.irs.gov/individuals/individual-taxpayer-identification-number

[17] National Immigration Law Center. “Individual Taxpayer Identification Number (ITIN).” Last Updated January 2017. https://www.nilc.org/issues/taxes/itinfaq/

[18] Internal Revenue Service. Taxpayer Identification Number.  https://www.irs.gov/individuals/individual-taxpayer-identification-number

[19] Nava, Erika. 2018. “Undocumented Immigrants Pay Taxes: County Breakdown of Taxes Paid.” New Jersey Policy Perspective. https://www.njpp.org/blog/undocumented-immigrants-pay-taxes-county-breakdown-on-taxes-paid-in-2017

[20] Migration Policy Institute. 2020. “Mixed-Status Families Ineligible for CARES Act Federal Pandemic Stimulus Checks.” https://www.migrationpolicy.org/content/mixed-status-families-ineligible-pandemic-stimulus-checks.

[21] New Jersey Department of Treasury. “New Jersey Earned Income Tax Credit”. https://www.state.nj.us/treasury/taxation/eitc/eitcinfo.shtml

[22] New Jersey General Assembly. 2020. A4229. https://www.njleg.state.nj.us/2020/Bills/A4500/4229_I1.PDF

[23] Colorado General Assembly. 2020 Regular Session. HB20-1420. http://leg.colorado.gov/bills/hb20-1420

[24] New Mexico Legislature. 2020 Regular Session. HB 148. https://www.nmlegis.gov/Legislation/Legislation?Chamber=H&LegType=B&LegNo=148&year=20

[25] Oregon Legislative Assembly. House Bill 3028. https://s3.amazonaws.com/fn-document-service/file-by-sha384/7d2d89b1041b2e92228fee94ab8734aa2ac87fa89161ac7506b58be4377797166ba273f7ea0c6d70a8190388022bb0c2

[26] Washington House Committee on Finance. House Bill 2521. http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bill%20Reports/House/2521%20HBR%20FIN%2020.pdf?q=20200216012900

[27] Center for Migration Studies. “State-Level Unauthorized Population and Eligible-to-Naturalize Estimates” http://data.cmsny.org/

[28] Gee, Lisa. (2020). “Impact of Including Eligible ITIN Filers in the Federal and State Earned Income Tax Credits.” Institute on Taxation and Economic Policy.

[29] Estimates of EITC eligible returns adjusted based on participation rates for the federal EITC, with a further 10% reduction to account for attrition between the state and federal EITC. The total number of ITIN tax returns that would be EITC eligible but for the SSN requirement is estimated to be 77,560.

[30] The EITC amount that households are eligible is calculated based on income and family size. The maximum NJ state credit amount for households without children is $206. The maximum NJ EITC amount for households with children ranges from $1,375 for families with one qualifying children, to $2557 for families with three or more qualifying children. More details about NJ EITC credit limits can be found here: https://www.state.nj.us/humanservices/dfd/programs/eitc/

[31] Institute for Taxation and Economic Policy. (2020). Estimated Number of Adults & Children in ITIN Households based on IRS 2015 ITIN Market Segment SPEC Returns Database.

[32] Avalos, A., and Alley, S. (2010). The economic impact of the Earned Income Tax Credit (EITC) in California. California Journal of Politics and Policy, 2(1): 1-25. https://doi.org/10.2202/1944-4370.1096

[33] Gee, Lisa. (2020). “Impact of Including Eligible ITIN Filers in the Federal and State Earned Income Tax Credits.” Institute on Taxation and Economic Policy.

[34] Ibid.

[35] Institute for Taxation and Economic Policy. 2020. Estimated Number of Adults & Children in ITIN Households based on IRS 2015 ITIN Market Segment SPEC Returns Database.                                          

[36] Marr, Chuck, Chye-Ching Huang, Arloc Sherman, and Brandon Debot. 2015. EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens?fa=view&id=3793

Toeing the Line: New Jersey Primary Ballots Enable Party Insiders to Pick Winners

Posted on by Julia Sass Rubin

To read a PDF version of the full report, click here.

The infamous Florida butterfly ballot of 2000, which may have cost Al Gore the Presidency, highlights the dramatic consequences of bad ballot design for general election outcomes.[1] The design of primary election ballots can also have substantial consequences, as these elections determine which candidates advance to the general election. This research brief demonstrates how a unique ballot design has been helping shape electoral outcomes in New Jersey for more than two decades, shifting the power to decide who wins primary elections away from the voters and towards a small group of party insiders who control the candidate endorsement process.

New Jersey Primary Ballots

A review of primary ballots in all fifty states and the District of Columbia finds that New Jersey’s ballots look very different from those in other states.[2] In all other states and DC, primary ballots are organized by the electoral position being sought, with candidates listed beneath each position (see Figure 1, Elko County, Nevada ballot) or immediately to the right of each position (see Figure 1, Sussex County, Delaware ballot). These ballot designs make it easy for voters to identify which candidates are running for which electoral office.

Figure 1: Elko County, NV 2018 Democratic Primary Ballot (left) and Sussex County, DE 2018 Democratic Primary Ballot (right).

By contrast, in nineteen of New Jersey’s twenty-one counties, the machine primary ballots used by the majority of voters are organized around a slate of candidates endorsed by either the Democratic or the Republican Party.[3] These slates of candidates are known as the “county line” or the “party line,” in reference to the fact that the endorsements are determined at the county party level and the endorsed candidates are presented on the ballot as a vertical or horizontal line of names. Candidates not on the line are placed in other columns or rows, sometimes far away from the county line candidates.

Figure 2 shows the 2018 New Jersey Democratic primary ballot from Camden County. The nine county line candidates are in column 2. The remaining fifteen candidates are scattered across the other eight, mostly empty, columns. There is no obvious logic as to why each of the non-endorsed candidates is in a particular column. Column 1 includes a single candidate for the U.S. Senate. Columns 3 through 8 include eleven candidates for Camden County Freeholder. Column 9 includes two candidates for the US House of Representatives and a candidate for the Camden City Council.

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Figure 2: Camden County, NJ 2018 Democratic Primary Ballot.

This ballot design — particularly listing candidates for the same office in different columns that may not even be adjacent, and candidates for different offices in the same column — makes it much more challenging for voters to determine which candidates are running for each office. Such a ballot design results in voters not realizing that some positions are contested or disqualifying their vote by mistakenly voting for too many candidates for a given position.[4] It also encourages voters to pick the candidates on the county line — an easy to find and visually consistent option. The county line is further advantaged by the placement of better-known candidates, such as those running for President, U.S. Senator, or Governor, at the top of the line and the inclusion of candidates for most or all of the offices on the ballot.[5] It is very challenging for candidates not endorsed by the party to compete with the county line by assembling a full slate of candidates that includes someone running for every position.

The county line is particularly advantageous for candidates whose names may be less familiar to voters, such as those running for the state legislature, and county-level or local positions. But the county line seems to provide a substantial electoral advantage regardless of the office being sought. A recent analysis by the Communications Workers of America found that no state legislative incumbent on the line had lost a primary election in New Jersey between 2009 and 2018.[6] Although incumbents generally win reelection, that advantage is rarely so absolute. In New York State, for example, twenty-two state legislative incumbents lost primary elections over the same time period.[7]  

The line provides an advantage for non-incumbents as well. For example, in the 2017 Democratic primary for Governor, Phil Murphy was endorsed by all 21 county political parties. Murphy won the primary in 20 of those counties but lost Salem county to John Wisniewski. Wisniewski’s win of Salem County is the first time since 1997 that a candidate in a Democratic primary for Governor or U.S. Senator won any county without being part of the county line.[8] Salem is also one of only two New Jersey counties, along with Sussex, that do not organize their Democratic and Republican machine primary ballots around a county line. Instead, the County Clerks in those two counties structure their primary ballots around the electoral positions being sought, like ballots in every other state in the country.[9]

The difference between the Salem and Sussex primary ballots and those in the rest of the state is dramatic. Figure 3 shows the gubernatorial portions of New Jersey’s 2017 Democratic primary ballots for Salem and Sussex counties versus the Middlesex County ballot. The six candidates for Governor are clearly identified as such in the Salem and Sussex ballots. In contrast, the Middlesex ballot lists the names of the six gubernatorial candidates over five different columns, with one of the candidates – Wisniewski – in a separate row from the other five. It is not surprising that candidates without party endorsement have little chance of winning when their names are presented to voters in such a confusing manner. 

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Figure 3: Salem County, NJ 2017 Democratic Primary Ballot (top left); Sussex County, NJ 2017 Democratic Party Ballot (top right); Middlesex County, NJ 2017 Democratic Primary Ballot (bottom).

Fair Primary Ballots for New Jersey

Problematic ballot design is frequently unintentional, the result of “overworked local officials who don’t have the time or staff to test whether a design works.”[10] When it comes to New Jersey primary ballots, however, faulty design is a feature rather than a bug. As detailed by Brett Pugach in a forthcoming Rutgers Law Review article, New Jersey’s primary ballot design reflects a combination of state laws and decades of court rulings that have created a confusing patchwork of regulations. The state’s county party organizations seem to have taken advantage[11] of this confusion to control the design of primary ballots, as a powerful means of benefitting the election of their chosen candidates.[12]

The New Jersey legislature could ensure that the state’s voters and not party insiders determine who wins primary elections by passing legislation that requires New Jersey primary ballots to be structured like those in other states. Those ballots would clearly indicate the title of each office being sought and, underneath or to the side of that, list the names of each candidate running for that office. To maximize ballot fairness, the candidates’ names would be randomly drawn and the order rotated by district, to counter the advantages of first-ballot position. Legislation that requires ballots organized in this manner ought to be a top reform priority for any legislators who care about election fairness.

End Notes

[1] Spenser Mestel (2018). How bad ballot design can sway the result of an election, The Guardian, November 19.

[2] The review included 2010 to 2020 primary ballots from at least four counties in every state and from the District of Columbia, as well as 2017 to 2020 primary ballots from all 21 New Jersey counties. See https://drive.google.com/drive/folders/1vudVsxEcLvY2nZAfD_k88780nyh5sGCr?usp=sharing

[3] Some counties that use a county line for in-person machine voting ballots have used Vote-by-Mail paper ballots that are structured like ballots in other states, by the electoral positions being sought. In 2020, Hunterdon, Passaic, Salem, Sussex and Warren Counties are all using such Vote-by-Mail ballots for the Democratic and Republican primaries and Morris County is using such a ballot for the Republican primary. Historically, few New Jersey residents have voted by mail, so the impact of these ballots has been minimal. In 2020, however, the entire state is voting by mail, creating a natural experiment to assess the effect of the county line on voter behavior.

[4] Andrea Cordova McCadney, Lawrence Norden and Whitney Quesenbery (2020, February 3) Common Ballot Design Flaws and How to Fix Them, The Brennan Center. https://www.brennancenter.org/our-work/research-reports/common-ballot-design-flaws-and-how-fix-them

[5] In years when there are no statewide or national contests, the candidates for State Senate or Assembly are placed at the top of the county line.

[6] Francisco Diez, The Likely Advantages of the Line, Communication Workers of America analysis, July 29, 2019.

[7] Diez

[8] Nick Acocella, 2017. How Much Does the Line Matter? InsiderNJ.com, June 10. https://www.insidernj.com/much-line-matter/

[9] Morris County does not organize its Republican primary ballot around the county line. However, the Democratic primary ballot in Morris County is organized around the county line.

[10] Danielle Kunits (2020, June 12) Don’t Let Mail-in Voting be thwarted by badly designed ballots. The Washington Post. https://www.washingtonpost.com/opinions/2020/06/12/these-are-9-senate-seats-most-likely-flip/?

[11] Julia Sass Rubin (2020, June 26). Can Progressives Change New Jersey? The American Prospect. https://prospect.org/politics/can-progressives-change-new-jersey/

[12] Brett Pugach (forthcoming). The County Line: The Law and Politics of Ballot Positioning in New Jersey. Rutgers University Law Review.

Unemployment Insurance Taxes Paid by Undocumented Workers Top $1 Billion

Posted on by Vineeta Kapahi

To read a PDF version of this report, click here.

Immigrants who are undocumented pay a share of sales, property, payroll, and income taxes that help support public services for all New Jersey residents. Nevertheless, undocumented workers and their families have been systematically excluded from many of the state and federal programs that they help fund, including unemployment insurance benefits.[1] In the midst of a global pandemic, this exclusionary practice will only push immigrants who are undocumented further behind. Undocumented immigrants are not only disproportionately at risk of health impacts due to the coronavirus,[2] but they are also overrepresented in the service sector industries at risk of the most job loss.[3] In order for all New Jerseyans to recover from the current crisis, it is critical that lawmakers address barriers to relief and assistance for immigrants. Anything short of that will only deepen existing structural inequities and slow the state’s recovery.

New Jersey is facing unprecedented job loss as a result of COVID-19,[4] with 1.2 million claims for unemployment benefits since the onset of the pandemic.[5] Unemployment insurance, which provides financial support to people who lose their jobs through no fault of their own, has been essential to helping New Jersey residents meet their financial obligations during this challenging time.[6] Unemployment insurance systems, which are funded by unemployment insurance trust funds, are financed by a payroll tax that employers pay to state and federal governments on behalf of all workers.[7] While considerable contributions to unemployment insurance funds are made based on the work of undocumented immigrants, these workers are ineligible[8] to collect unemployment benefits.[9]

Table: Undocumented Workers in New Jersey Paid More Than $1.3 Billion in Unemployment Insurance Taxes Over the Last Decade

Over the past ten years, unemployment insurance taxes paid based on undocumented immigrants’ work in New Jersey added more than $1.36 billion to state and federal unemployment insurance trust funds, according to a recent analysis[10] conducted by the Institute on Taxation and Economic Policy and the Fiscal Policy Institute.[11]In addition to contributions to unemployment insurance taxes, undocumented immigrants pay sales taxes, income taxes, and other taxes. Overall, New Jersey residents who are undocumented contribute approximately $587 million in state and local taxes each year.[12]

While many undocumented immigrants experience the same health and employment challenges resulting from COVID-19 as other workers, the vast majority of undocumented immigrants also face barriers to other forms of relief. For example, while federal lawmakers made stimulus payments available to most residents earning under $99,000 through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, taxpayers who filed using an Individual Taxpayer Identification Number (ITIN) were intentionally excluded from this form of relief. As a result, an estimated 686,000 New Jersey residents, including immigrant workers and their family members, many of whom are U.S. citizens, were ineligible for these stimulus payments.[13] Undocumented immigrants are also generally ineligible for safety net programs, such as food assistance under the Supplemental Nutrition Assistance Program (SNAP), cash assistance through Temporary Assistance for Needy Families (TANF), General Assistance, and most forms of public health insurance such as Medicaid.[14]

Philanthropic and grassroots organizations have taken emergency steps to address critical gaps in federal and state government responses by creating or contributing to pandemic relief funds.[15] Although these funds are helpful, these efforts are limited and are far from the scale of resources needed to address the current crisis. Rather than shifting the responsibility of responding to structural inequities onto individuals, lawmakers should take action to address gaps they helped create. One example of such action is proposed state legislation, S2480, which would provide a one-time payment to certain New Jersey residents who pay taxes using an ITIN.[16] While this is an important step and would benefit up to 35,000 residents — or one quarter of ITIN holders — this bill alone will not meet the needs of New Jersey’s immigrant families, many of whom are now in their third month without relief.[17] In addition, the maximum amount that would be provided per taxpayer in this proposal is still less than the amount afforded to most New Jersey residents through other forms of relief, including the stimulus payments and unemployment insurance.[18]

While the federal government has intentionally excluded immigrants who are undocumented from many forms of relief, New Jersey lawmakers have the opportunity to take responsibility for the health and safety of all of the state’s residents, regardless of immigration status. One concrete way to address gaps in response to the pandemic is to create a program for undocumented immigrants excluded from unemployment insurance, by way of providing weekly benefits similar to those afforded to other unemployed New Jerseyans. The cost of a program parallel to unemployment insurance would depend on the unemployment and participation rates. While the unemployment rate in New Jersey is 15.3 percent[19], many unemployed immigrants who are undocumented may be hesitant to access this type of program due to the chilling effect of anti-immigrant policies.[20] If, for example, 10 percent of the state’s 344,000 undocumented workers in the labor force in New Jersey[21] accessed a benefit comparable to what other unemployed New Jerseyans receive on average each week — the average weekly unemployment benefit in New Jersey in 2019 was $461.53[22] — the cost would be approximately $69 million per month.

New Jersey could further address gaps in the federal government’s pandemic response by establishing a state program that mirrors the Federal Pandemic Unemployment Compensation (FPUC), but is available to all workers, regardless of their documentation status. Under the CARES Act, FPUC, which went into effect in April and is set to expire at the end of July, provides an additional $600 weekly benefit to workers who are collecting unemployment insurance.[23] If 10 percent of undocumented immigrants in the workforce accessed the program weekly, the cost would be $89 million per month, and $358 million for a four month period.

While low-wage workers face disproportionate health and economic consequences from the coronavirus pandemic without benefiting from the systems they help fund, many of the wealthiest corporations and individuals are profiting from the current crisis.[24] Not only have the fortunes of many of the wealthiest increased during the pandemic, but those who are the most well-off also pay a disproportionately small amount in taxes.[25] Rather than compounding wealth inequality by giving state resources to those who do not need them, New Jersey has the opportunity to create programs and policies that reflect the state’s values.

Investing in the health and well-being of New Jersey’s families and workers — who have been paying into and yet are excluded from systems that provide relief and support — would not only promote the safety and well-being of these workers and their families, but also strengthen the state’s recovery from the current pandemic. By addressing gaps and inequities in responses to the current crisis, lawmakers can better protect the health and wellbeing of all New Jerseyans.

End Notes

[1] Make the Road New Jersey. Essential and Excluded: A Survey of Immigrants in New Jersey under COVID-19”. (2020). Accessed May 26, 2020. https://www.maketheroadnj.org/report_essential_and_excluded

[2] Gelatt, Julia. Immigrant Workers: Vital to the U.S. COVID-19 Response, Disproportionately Vulnerable. March 2020. Accessed May 26, 2020. https://www.migrationpolicy.org/research/immigrant-workers-us-covid-19-response;

[3] McKoy, Brandon, J. Fine, and T. Vachon. 2020. Undocumented Workers in Service Sector Most Likely to be Harmed by COVID-19. Accessed May 26, 2020. https://www.njpp.org/wp-content/uploads/2020/05/NJPP-Policy-Brief-Service-Sector-Industries-Most-Likely-to-be-Harmed-by-COVID-19.pdf

[4] Rodriguez, Nicole. COVID-19 Unemployment Claims Will Soon Surpass Total Claims from the Great Recession. (May 2020). New Jersey Policy Perspective. Accessed May 27, 2020. https://www.njpp.org/economic-opportunity-2/covid-19-unemployment-claims-will-soon-surpass-total-claims-from-the-great-recession#_edn4 on May 27, 2020.

[5] New Jersey Department of Labor and Workforce Development. “NJ Unemployment Claims, Payments Hit New Historic Highs”. (June 11, 2020) Accessed on June 16, 2020. https://www.nj.gov/labor/lwdhome/press/2020/20200611_paymentsupdate.shtml

[6] New Jersey Department of Labor and Workforce Development, Division of Unemployment Insurance. “What is Unemployment Insurance?”. Accessed on May 28, 2020. https://myunemployment.nj.gov/labor/myunemployment/before/about/

[7] Tax Policy Center. “Key Elements of the US Tax System: What is the unemployment insurance trust fund, and how is it financed?” Accessed on June 1, 2020. https://www.taxpolicycenter.org/briefing-book/what-unemployment-insurance-trust-fund-and-how-it-financed

[8] To qualify for unemployment insurance, workers generally must have been authorized to work during the base period (the period during which the worker performed the work), at the time that they apply for benefits, and throughout the period during which they are receiving benefits.

[9] National Employment Law Project. “Immigrant Workers’ Eligibility for Unemployment Insurance”. Accessed on March 31, 2020. https://www.nelp.org/publication/immigrant-workers-eligibility-unemployment-insurance/

[10] Institute on Taxation and Economic Policy. (May 2020) “Undocumented Immigrant Estimated UI Contributions 2010-2019.”

[11] This estimate, which was generated by the Institute on Taxation and Economic Policy and the Fiscal Policy Institutes, assumes that half of undocumented immigrants employed in New Jersey are paid on the book, following the approach of the National Academy of Sciences study on fiscal impacts of immigrants. Further details on this methodology are available in the Fiscal Policy Institute’s brief: Unemployment Insurance Taxes Paid for Undocumented Workers in NYS, available here http://fiscalpolicy.org/wp-content/uploads/2020/05/UI-taxes-and-undocumented-workers.pdf

[12] Nava, Erika. “Undocumented Immigrants Pay Taxes: County Breakdown of Taxes Paid.” New Jersey Policy Perspective. Accessed June 11, 2020. https://www.njpp.org/blog/undocumented-immigrants-pay-taxes-county-breakdown-on-taxes-paid-in-2017

[13] Migration Policy Institute. 2020. “Mixed-Status Families Ineligible for CARES Act Federal Pandemic Stimulus Checks.”  Accessed May 29, 2020. https://www.migrationpolicy.org/content/mixed-status-families-ineligible-pandemic-stimulus-checks.

[14] Protecting Immigrant Families. “Immigrant Eligibility for Public Programs During COVID-19.” Accessed June 5, 2020. https://protectingimmigrantfamilies.org/immigrant-eligibility-for-public-programs-during-covid-19/.

[15] Council of New Jersey Grantmakers. 2020. “NJ Focused Response Funds.” Accessed May 28, 2020. https://www.cnjg.org/nj-focused-response-funds

[16] State of New Jersey 219th Legislature. Senate, No. 2480. Retrieved from https://www.njleg.state.nj.us/2020/Bills/S2500/2480_I1.PDF.

[17] Ibid.

[18] Ibid.

[19] New Jersey Department of Labor and Workforce Development. 2020. “Pandemic Leads to Historic Job Losses in April Unemployment Rate Surges to 15.3 Percent.” http://state.nj.us/labor/lpa/pub/emppress/pressrelease/prelease.pdf

[20] Bernstein, Hamutal, D. Gonzalez, M. Karpman, and S. Zuckerman. “Immigrant Families Continued Avoiding Public Benefits in 2019.” Washington, DC: Urban Institute. Accessed on June 15, 2020. https://www.urban.org/research/publication/amid-confusion-over-public-charge-rule-immigrant-families-continued-avoiding-public-benefits-2019

[21] Institute on Taxation and Economic Policy. (May 2020) “Undocumented Immigrant Estimated UI Contributions 2010-2019.”

[22] United States Department of Labor. Monthly Program and Financial Data. Accessed June 4, 2020. https://oui.doleta.gov/unemploy/claimssum.asp

[23] U.S. Department of Labor. “Unemployment Insurance Relief During COVID-19 Outbreak.” Accessed June 8, 2020. https://www.dol.gov/coronavirus/unemployment-insurance.

[24] Chris Collins, Omar Ocampo, and Sophia Paslaski. “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers.” (2020). Institute for Policy Studies. Accessed on May 29, 2020. https://ips-dc.org/billionaire-bonanza-2020/

[25] Ibid.

Road to Recovery: Reforming New Jersey’s Income Tax Code

Posted on by Sheila Reynertson

To read a PDF version of this report, click here.

The current pandemic has created unprecedented challenges to New Jersey’s finances, as hundreds of millions of dollars are being poured into stopping the spread of the coronavirus, saving lives, and protecting workers and communities across the state.[1] Once the immediate public health risk subsides, New Jersey will face a stark reality: the enormous costs associated with the response and the drain on incoming revenue needed to keep public services available and support struggling families and businesses. Even with federal aid and borrowing to help shore up expected revenue shortfalls, New Jersey will need to do more to address budget shortfalls in the short and stabilize the state’s finances in the long-term.

At the start of the Great Recession, New Jersey implemented a temporary income tax surcharge on earnings over $400,000 to plug budget holes and reinvest in the economy. But as the recession dragged on, the state let this policy expire and, instead, pivoted to a cuts-only approach to balancing the budget. This shift in policy slowed New Jersey’s recovery, illustrating the findings of research by economists at the Center on Budget and Policy Priorities, which found that during a recession, spending cuts are actually more harmful to a state’s economy than tax increases.[2] Facing today’s crisis, which has exposed deep-seated inequities in New Jersey’s economy, state lawmakers must avoid the mistakes of the past by avoiding damaging cuts by reforming the state’s outdated, inadequate, and unfair tax code.

A more balanced response must be taken now — one that includes increasing tax contributions from the richest five percent of earners who have repeatedly benefited from a lopsided tax system. Taken as a whole, New Jersey’s tax code has allowed the very wealthy to avoid paying their fair share towards public assets and resources.[3] These same households have also received billions of tax breaks through temporary and permanent provisions in the federal Tax Cuts and Jobs Act (TCJA) of 2017, including a reduction in the federal estate tax that only very wealthy families pay, a cut in the personal income tax rate, and a permanent cut to the corporate tax rate.

A sensible way to address revenue shortfalls and an unfair tax code is to raise income taxes on the state’s wealthiest households. By reforming New Jersey’s income tax, our recovery can be strengthened by reducing the tax burden that low-paid and middle class families pay, while generating more revenue for public programs and services that benefit all residents. Overall, increasing and adding additional tax rates on the wealthiest households would raise approximately $1.5 billion in new revenue each year while making the overall tax code fairer.[4]

A more progressive tax code can be accomplished through targeted changes on the very top tax brackets.[5] Below are two options for improvement: Proposal 1 would create new brackets at $250,000 and $1 million, and would increase the tax rate slightly at the existing $500,000 and $5 million brackets. This would ensure that the tax increase would be paid mostly by New Jersey’s ultra-wealthy, with the top 1 percent of households — with average annual incomes of $2.46 million — paying 70 percent of the total tax increase.[6]

Alternatively, the tax changes could focus solely on those who earn more than $1 million per year who live and work in New Jersey. Proposal 2 creates two new brackets at $1 million and $2.5 million, paired with a slight increase on the existing tax rate at $5 million. However, this would raise approximately $520 million less revenue than Proposal 1.

Given these findings, Proposal 1 is unequivocally the more equitable and progressive option, and should receive support from lawmakers and advocates who seek to move New Jersey’s tax code towards a more reliable and sustainable design. While Proposal 2 requires those who earn $1 million and above to contribute their fair share, choosing to exclusively focus on millionaires is a narrow and reductive view of income inequality in the Garden State. Adjusting the income tax code to modestly raise rates on those earning $250,000 and more is both a common-sense step and one which more fully addresses the disproportionate share of wealth that is held by these households. Critically, Proposal 1 also raises approximately $520 million more than Proposal 2, which would provide greater flexibility to invest in critical assets and services that can further address racial inequities rife throughout the state.

Graph: Creating new tax brackets for high incomes would make New Jersey's tax code fairer.

Today, middle-class New Jerseyans pay a greater share of their incomes to state and local taxes than the state’s highest earners.[7] With these proposed changes, the state income tax code would become fairer, ensuring budgets are no longer balanced on the backs of middle-class families. If Proposal 1 were adopted, the share paid by the top 1 percent would rise from 9.8 percent to 10.8 percent, a slightly higher contribution than what is paid by middle-class New Jersey families who make between $74,800 and $132,000. Proposal 2 also makes the income tax code less regressive, with the state’s top earners paying 10.7 percent of their annual income on state and local taxes, the same rate that is paid by those in the middle.

Graph: Reforming New Jersey's income tax would ensure the top 1 percent of households pay the highest tax rate.

Overview and History of New Jersey’s Income Tax

New Jersey’s income tax was established in 1976 to provide better resources for schools, cities and towns, and direct property tax relief for homeowners.[8] It currently raises aproximately $16 billion in annual revenue, representing 42 percent of total state tax collections.[9] All revenue from the income tax is constitutionally dedicated to fund property tax relief, which includes school aid, teacher pensions, municipal and county aid, and direct relief for qualified veterans, people with disabilities, and senior homeowners. Despite this guaranteed revenue stream, these programs have been plagued by chronic underfunding, cuts, and delayed payments for decades. At the same time, the wealthy were given billion-dollar tax cuts and benefited from tax loopholes, lowering their overall tax responsibilities. These changes combined have created a tax code that is skewed toward the wealthy, which translates to painful cuts to public programs and services that New Jersey families, schools, and communities rely on.

Today, for single tax filers, New Jersey’s income tax ranges from 1.4 percent on incomes up to $20,000 to 10.75 percent on incomes over $5,000,000. For couples filing jointly, the tax is slightly more graduated, with lower rates in the mid-range brackets.[10]

New Jersey employs marginal tax rates, which apply different tax rates to different levels of income. As income rises, it is taxed at incrementally higher rates as opposed to a flat rate, which taxes at the same rate across all income levels. In other words, a New Jerseyan with $5,005,000 in earnings pays the top rate of 10.75 percent on only $5,000 of her earnings, not on the entire $5,005,000.

Currently, there are more tax brackets — four — under $75,000 than there are over it: three. The way New Jersey’s income tax code is designed means that $80,000 in annual earnings has the same income tax rate as $450,000. Similarly, $600,000 in earnings has the same rate as $4.9 million. New Jersey’s income tax code would benefit from a more stratified approach to higher levels of income by adding more brackets between $250,000 and $5 million.

New Jersey’s Income Tax Code: Outdated, Inadequate, and Unfair

New Jersey’s current income tax structure doesn’t accurately reflect the staggering level of income inequality that has taken root over the past 40 years. The share of all income held by the top 1 percent has steadily climbed since the Reagan administration and now approaches historical highs.[11] According to the latest data from the U.S. Census Bureau, New Jersey is the ninth most unequal state when it comes to income inequality, up from twelfth place in 2016.[12] The wealthiest households earn, on average, 37.9 times more than the middle 20 percent, according to 2019 data.[13]

While New Jersey has taken steps toward making the income tax code fairer in the past, it has failed to accurately reflect growing disparities in income:

  • In 2004, a new top rate of 8.97 percent on income over $500,000 was added.
  • In 2009, a temporary surcharge lowered the threshold for the 8.97 percent rate on income above $400,000 and added new tax rates of 10.25 percent above $500,000 and 10.75 percent above $1 million. This surcharge and new tax bracket expired in 2010.
  • In 2019, a new top rate of 10.75 percent on income over $5,000,000 was added.

 

The temporary changes to income tax brackets over the $400,000 threshold raised approximately $560 million at a time when New Jersey was experiencing an enormous budget shortfall due to the Great Recession. However, the legislature allowed them to sunset a year later in 2010.[14] Subsequent efforts to reinstate these new brackets, or to otherwise make the tax code more progressive, were repeatedly vetoed by then-Governor Christie. This inaction has allowed high-earning New Jersey families to enjoy over $7 billion in cumulative tax breaks between fiscal years 2010 and 2018.[15] A permanent “mega-millionaire” tax bracket on earnings over $5 million at 10.75 percent was finally added in 2019, raising an average of $363 million a year, but this left about $400 million a year in the pockets of 18,200 New Jersey resident taxpayers and 12,800 non-residents who work in the Garden State who earn between $1 million and $5 million in annual income.[16]

Advancing Racial Equity Through Income Tax Reform

Improving New Jersey’s tax code would also address worsening racial disparities laid bare by the COVID-19 pandemic. A long history of discrimination in housing, education, employment, and the criminal justice system are all rooted in the legacy of slavery. These policies were created, and continue, to perpetuate economic advantages for white families in the Garden State. The result is a landscape of undisturbed structural racism, occupational segregation, exclusionary residential laws and practices, and massive income and wealth disparities between white households and Black and Latinx households. The typical white family in the United States has 10 times the wealth of the typical Black family and seven times the wealth of the typical Latinx family.[17] In New Jersey, the typical white family has over 52 times the wealth of the typical Black family and over 44 times the wealth of the typical Latinx family.[18] This stark and long-lasting gap means some families can respond to unexpected emergencies like a pandemic without significant hardship while others are left vulnerable and at greater risk of housing insecurity and job loss.

One of the most powerful tools driving income and wealth inequality is the tax code. Just as tax policy choices are both a symptom of, and contributor to, broader injustices, they can also be utilized to repair the damage done and advance racial equity.

For example, the 2017 federal tax law, the Tax Cuts and Jobs Act (TCJA), actually worsened racial inequities by showering the wealthy with tax benefits at the expense of the economic security among middle-class and low-income families, which in New Jersey are over-represented by Black and Latinx households. Three-quarters of Black households (75 percent) and of Latinx households (77 percent) earn less than $81,000 a year in the Garden State.[19]

In New Jersey, the TCJA is more widely known for one provision: the temporary $10,000 cap on state and local tax (SALT) deductions, which limits how much taxpayers can deduct these taxes from their federal tax bill. But other provisions in the 2017 tax law — corporate tax cuts, pass-through tax cuts, and estate tax cuts — benefited the vast majority of the wealthiest taxpayers. That windfall means that even with the SALT deduction limitation factored in, New Jersey’s top 1 percent of earners, who are overwhelmingly white, will pocket an average of $37,640 this year.[20]

Targeted changes to New Jersey’s income tax code as proposed above could rectify this lopsided benefit, reversing course on the racial implications of the TCJA and providing the state with desperately needed resources — with the top 1 percent of earners still receiving an average net tax cut of about $12,500 when considering both the TCJA and the proposed income tax reforms.

Graph: Wealthiest households still receive net tax break after federal tax cuts and income tax reforms.

Should the federal government repeal the SALT deduction limitation, as currently proposed by Congress in the HEROES Act, there is no reason for New Jersey to pull back on these targeted changes to the income tax code. That’s because over half (54 percent) of the benefit from a reversal of the SALT cap would go to the wealthiest 1 percent with nearly every one of those families getting a hefty tax break.[21] In fact, such a policy change all but solidifies why New Jersey must take action.

According to State Treasurer Elizabeth Maher Muoio, New Jersey is likely facing “an unprecedented fiscal crisis” with potential shortfalls that rival the Great Recession.[22] Tough decisions lay ahead with options that may or may not be available to the Garden State, including borrowing, flexible federal aid, and revenue reserves. Raising sufficient revenue for the recovery is not just a short-term goal. It is a strategic tool to protect vital investments, overcome racial inequities, and build a state economy whose benefits are widely shared.

The COVID-19 crisis has devastated communities across New Jersey. If we really are all in this together, we must guarantee that sacrifices will be shared among all residents. For decades, low-income and middle-class families — especially families of color and marginalized communities — have borne the brunt of economic recovery while enjoying none of the rewards. These proposed changes to the income tax code are the right policies at the right time and will help ensure that all New Jerseyans are paying more of their fair share to support the investments we all need to thrive.

End Notes

[1] New Jersey Department of Treasury, Report on the Financial Condition of the State Budget for Fiscal Years 2020 and 2021, May 2020. https://www.state.nj.us/treasury/omb/publications/NJ-Financial-Condition.pdf

[2] Center on Budget and Policy Priorities, Budget Cuts or Tax Increases at the State Level: Which is Preferable When the Economy is Weak?, April 2010. https://www.cbpp.org/research/budget-cuts-or-tax-increases-at-the-state-level?fa=view&id=1032

[3] New Jersey Policy Perspective, It’s Time to Face the Music, Jersey: We’ve Been Robbed, March 2019. https://www.njpp.org/budget/its-time-to-face-the-music-jersey-weve-been-robbed

[4] These proposals use the Institute on Taxation and Economic Policy (ITEP) Microsimulation Tax Model, 2019. Revenue estimates will be affected by COVID-19 crisis. However, because these tax changes are targeted on high-income earnings, the estimates will likely be comparable.

[5] A tax bracket refers to a range of incomes subject to a certain income tax rate.

[6] Taxation and Economic Policy (ITEP) Microsimulation Tax Model, 2019.

[7] Institute on Taxation and Economic Policy, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, 6th Edition, October 2018. https://itep.org/whopays/new-jersey/

[8]  (P.L.1976, c.47)

[9] State of New Jersey, The Governor’s FY 2021 Detailed Budget, March 2020. https://www.nj.gov/treasury/omb/publications/21budget/pdf/FY21GBM.pdf

[10] New Jersey Department of Treasury, Division of Taxation, NJ Income Tax – Tax Rates, Last updated February 2020. https://www.state.nj.us/treasury/taxation/taxtables.shtml

[11] Center on Budget and Policy Priorities, A Guide to Statistics on Historical Trends in Income Inequality, January 2020. https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

[12] The Star Ledger, The gap between the rich and poor in New Jersey keeps increasing, data shows, March 2020. https://www.nj.com/data/2020/03/the-gap-between-the-rich-and-poor-in-new-jersey-keeps-increasing-data-shows.html

[13] Institute on Taxation and Economic Policy (ITEP) Microsimulation Tax Model. Based on all New Jersey residents, using 2019 incomes.

[14] New Jersey Department of Treasury, Division of Taxation, Important Changes for 2010, Last updated March 2020. https://www.state.nj.us/treasury/taxation/new2010.shtml

[15] New Jersey Policy Perspective, It’s Time to Face the Music, Jersey: We’ve Been Robbed, March 2019. https://www.njpp.org/budget/its-time-to-face-the-music-jersey-weve-been-robbed

[16] New Jersey Treasury, Office of Management and Budget, Citizens’ Guide to the State Budget Fiscal Year 2019, December 2018. https://www.nj.gov/treasury/omb/publications/19citizensguide/citguide.pdf

[17] Center for American Progress, The Coronavirus Pandemic and the Racial Wealth Gap, March 2020. https://www.americanprogress.org/issues/race/news/2020/03/19/481962/coronavirus-pandemic-racial-wealth-gap/

[18] New Jersey Institute for Social Justice, Reclaiming the American Dream: Expanding Financial Security and Reducing the Racial Wealth Gap Through Matched Savings Accounts, April 2019. https://www.njisj.org/new_jersey_institute_for_social_justice_releases_reclaiming_the_american_dream_expanding_financial_security_and_reducing_the_racial_wealth_gap_through_matched_savings_accounts

[19] Data shared with NJPP by Institute on Taxation and Economic Policy, May 2019.

[20] Institute on Taxation and Economic Policy, TCJA by the Numbers: 2020, August 2019. https://itep.org/tcja-2020/

[21] New Jersey Policy Perspective, A Grain of ‘SALT’: New Jersey Needs More Than Workarounds to Respond to GOP Tax Plan, January 2018. https://www.njpp.org/budget/a-grain-of-salt-new-jersey-needs-more-than-workarounds-to-respond-to-gop-tax-plan

[22] New Jersey Department of the Treasury, Treasury Issues Preliminary Update on Projected Revenue Shortfall through Fiscal Year 2021, May 2020. https://www.nj.gov/treasury/news/2020/05132020b.shtml

New Jersey’s Shrinking Pool of Teacher Candidates

Posted on by Mark Weber

To read a PDF version of the full report, click here.

Executive Summary

Maintaining a high-quality teaching workforce is critically important for the future of public education in New Jersey. Federal data, however, show cause for concern: New Jersey is producing far fewer teacher candidates than a decade ago. In fact, the number of candidates completing teacher preparation programs has dropped 49 percent between 2009 and 2018. These declines, which are part of national and regional trends, cut across both gender and race. The dwindling number of teacher candidates creates instability in the teaching profession and jeopardizes the ability of students to learn.[1]

While reasons for the decline in teacher candidates are complex, we know that New Jersey’s teachers are paid considerably less than other college-educated workers, even when controlling for age and time worked.[2] Of particular concern is that the evidence suggests fewer college graduates see teaching as a viable career option with adequate compensation. New Jersey must aggressively address these problems if it wishes to retain its status as having one of the best education systems in the nation.

To stem the decline in teacher candidates, New Jersey should work to make the teaching profession more attractive by raising teacher pay, shoring up benefits, and increasing the respect and appreciation shown to New Jersey’s educators.

This report explores enrollment and completion data in teacher preparation programs, gives context around state policy changes affecting education professionals, reviews the level of teacher demand in the state, and examines the change in demographics within the profession over the past ten years.

Background

This past September, NJPP published an analysis of the New Jersey teaching corps entitled, New Jersey’s Teacher Workforce, 2019.[3] Among its findings:

  • While factors outside of school are the strongest influences on student achievement, teacher quality is the most significant in-school influence.
  • The research on teacher quality suggests that qualified people become teachers based, in part, on how well teaching pays compared to other jobs.
  • Despite the importance of teachers, there is a significant gap in wages between New Jersey teachers and other college-educated workers in the state, even when accounting for differences in time worked.
  • Pensions and health benefits do not fully close the pay gap between teachers and college-educated workers in other professions.
  • New Jersey’s teaching workforce is mostly white and female; there is little evidence of a trend toward a more diverse teaching workforce.
  • New Jersey’s teacher workforce is aging, suggesting a new wave of retirements in the next several years.


These findings are similar to other analyses, which show a significant pay gap for teachers compared to other college-educated workers.[4] Critics suggest, however, that these studies are flawed in that they don’t fully account for differences in benefits and other non-pecuniary compensation, unmeasured differences in talent between workers, and other factors. Teachers, they argue, are actually well-compensated, even in today’s tightening labor market.

To test these criticisms, this report examines whether more or fewer workers are becoming teachers. If teacher pay and benefits have kept pace with compensation in other sectors, we would expect to see workers respond in kind, and continue to enter the profession at previous rates. Because compensation levels influence workers’ decisions to go into teaching those workers would judge the benefits that teachers receive as adequate to close the teacher pay gap and continue to enroll in programs to prepare to become educators.[5]

The data, however, tell a different story. Fewer workers in New Jersey are electing to enter teacher preparation programs, a clear indication that teaching is not as attractive a career option as it once was.

Findings

Teacher Preparation Programs: Enrollment & Completion

Teacher preparation programs across the United States can be either traditional or alternative. Traditional programs are generally run by institutions of higher education and lead to degrees or credentials that fulfill the requirements for a teaching certification. Alternative programs enroll candidates who have previous subject-matter knowledge; these candidates often are already the teachers of record in a classroom while they participate in their preparation program.[6]

At its peak in the 2009-10 academic year, the state enrolled 21,410 teacher candidates in various preparation programs. By 2017-18, however, the number of enrollees had declined to 7,950, a 63 percent drop.

Graph: Enrollment in New Jersey teacher preparation programs has dropped 63 percent since the 2009-2010 school year.
Figure 1

The decline in enrollment led to a decline in the number of people who completed teacher preparation programs (henceforth referred to as “completers”), from 6,373 in the 2009-10 academic year to just 3,366 in 2017-2018, representing a 47 percent decrease.

Graph: Completers of New Jersey teacher preparation programs have dropped 47 percent since the 2009-2010 school year.
Figure 2

To contextualize these data, it is instructive to consider the changes in the state’s policies regarding teachers over the same period of time[7]:

  • Chapter 78, enacted in June of 2011, was a law that forced teachers to pay substantially higher pension contributions, removed cost of living increases from pensions, and required teachers to pay substantially more for health care benefits.
  • TEACHNJ was enacted in August of 2012; it weakened teacher tenure protections, expanded teacher evaluation requirements, and led to the increased use of standardized test scores in teacher rating systems.
  • AchieveNJ was implemented by the state for the 2013-14 school year; the new regulations required the use of approved teacher observation systems, as well as the use of Student Growth Percentiles (SGPs) based on test scores, and Student Growth Objectives (SGOs) which require additional work for all teachers.
  • The state moved from the New Jersey Assessment of Skills and Knowledge (NJASK) to the Partnership for Assessment of Readiness for College and Careers (PARCC) exams in the 2014-15 school year. PARCC expanded the grade levels subject to testing, increased the amount of time spent administering exams, and required a substantial expansion of technology infrastructure.

It is worth noting that the number of work hours per week reported by teachers increased during this same period. [8] It is likely this is, at least in part, a result of the policy changes listed above.

While reasons for the decline in teacher candidates are complex, these policies likely contribute to working conditions that make it difficult for teachers to thrive. New Jersey’s teachers have been increasingly underpaid relative to similarly educated workers and have seen an erosion of their benefits while the demands of their jobs have grown.[9]

The Demand for Teachers

To sustain a strong teacher workforce, it is critical that New Jersey has a large pool of highly qualified candidates for school districts from which to hire. Over the last decade, the number of new teachers entering New Jersey’s workforce has varied sharply. The Great Recession of 2008-09 severely stifled the hiring of novice teachers (certified teachers with less than one year of experience) in New Jersey’s schools. 2009 saw the beginning of a sharp drop off in novice teachers, reaching a low point in 2011. The economic recovery, however, led to a substantial rise in teacher hiring; by 2014, nearly 10,000 novices were in the state’s teacher workforce.

Graph: Demand for New Jersey teachers has returned to pre-Great Recession levels.
Figure 3

The latest data indicate that New Jersey’s demand for novice teachers is back where it was before the Great Recession. However, the number of teacher candidates has not rebounded – even as the student population has remained relatively stable at around 1.37 million K-12 students from 2009 to 2017. The consequence is that the number of teacher candidates per 1,000 students has dropped significantly.

Graph: Fewer teacher prepation enrollees and completers, but the same number of students.
Figure 4

In 2009, there were about 13 enrollees in teacher preparation programs for every 1,000 students; in 2018, there were only about six enrollees per 1,000 students. Likewise, in 2009 there were nearly five program completers for every 1,000 students; in 2017, there were less than three completers per 1,000 students.

Overall, there are fewer New Jersey workers entering the teaching workforce than a decade ago while the student population has not declined significantly. Each year, school administrators have had to draw from a shallower pool of teacher candidates to fill the positions needed to maintain the quality of New Jersey’s schools. If this trend continues, there will not be enough well-qualified teacher candidates available to maintain the state’s teacher workforce.

“Alternate Route” Teacher Preparation

Between the 2012-13 and 2013-14 school years, there was a large drop in teacher prep program completers. This decline is a direct result of the shuttering of the New Jersey Department of Education’s (NJDOE) Alternate Route program. This program, which was administered directly by the state, allowed candidates with previous subject-matter knowledge to acquire a Certificate of Eligibility (CE) and begin employment as a teacher of record in a classroom. Candidates could eventually become a fully credentialed teacher without enrolling in a traditional program at an institution of higher education (IHE).[10] The state still issues CE’s; however, the Alternate Route program is no longer directly administered by the NJDOE, but by a variety of institutions that also offer traditional preparation programs.

The closing of the NJDOE Alternate Route program brought on a significant decline in the total number of teacher program completers. Further, the number of completers in all other programs also decreased during this time, from a high of 5,243 in 2010-11 to 3,366 in 2017-18, a decline of 36 percent.

Graph: Shutting down New Jersey's "Alternate Route" program has caused a large drop in teacher candidates.
Figure 5

When such a large and sudden drop in program completers appears in the data, it is reasonable to ask whether there may be data errors, or some other reporting issue. Conversations with NJDOE staff, however, confirm that the large declines due to the end of the old Alternate Route program were actual declines.[11] Further analysis reveals that New Jersey is not alone; the decline in enrollees and completers of teacher prep programs of all types is a national problem.

Comparing New Jersey to Neighboring States

The number of teacher candidates is declining across the United States: 31 percent fewer people completed a teacher prep program in the 2017-18 academic year than in 2008-09. New Jersey’s decline of 49 percent is high compared to the rest of the nation, but not when compared to most of its regional neighbors. Pennsylvania had slightly greater losses in teacher candidates during this same period; New York’s and Delaware’s losses were somewhat smaller. Losses in Connecticut, in contrast, were closer to the national average.

Graph: Fewer teachers candidates are completing teacher preparation programs all across the nation.
Figure 6

Demographics

Past research shows students of color benefit from having teachers of color in their schools, reporting that students demonstrate small but significant increases in academic outcomes.[12] Unfortunately, New Jersey’s teacher workforce looks nothing like its student population. While only 22 percent of the state’s students are white females, 66 percent of the state’s teachers are white women.[13]

If the state is to have a more diverse teacher workforce, it must recruit a more diverse population of teacher candidates. However, the declines in enrollees in teacher prep programs cut across gender and racial lines.

With regard to gender, between academic years 2008-09 and 2017-18, the number of men enrolled in teacher prep programs declined by 55 percent. During the same period of time, the number of women declined by 56 percent.

Graph: Enrollment in New Jersey teacher preparation programs by gender.
Figure 7

While enrollees of different races and ethnicities have all seen declines, there is some variation. Between academic years 2008-09 and 2017-18, Hispanic/Latinx enrollees of any race declined by 33 percent and Asian enrollees declined 36 percent. Even more striking is that Black or African American enrollees declined by 58 percent.

Students of color already face significant challenges in completing college, due to systemic barriers that they are uniquely forced to grapple with. These challenges are compounded when students consider entering a teacher preparation program.[14] Teacher licensure exams, for example, often have higher rates of failure for prospective teachers of color, even as studies find the exams do not consistently or accurately predict teacher effectiveness. There is a disturbing history of deliberate bias in these exams, whose results were often used to justify racially disparate hiring practices in schools.[15]

Graph: Enrollment in New Jersey teacher preparation programs by race.
Figure 8

New Jersey has recently made efforts to recruit more men of color into teaching, but such efforts are likely to have minimal effect if college-educated workers are increasingly turning away from the profession.[16] New Jersey will only recruit a diverse teacher workforce if it both makes teaching more attractive and dismantles the systemic barriers to entry for teacher candidates of color.

Production of Teaching Degrees

While all certificated teachers in New Jersey must meet specific academic credit requirements, it is not necessary for a teacher to have a degree in education. That said, it is useful to look at the changes in the numbers of New Jersey college students who are granted education degrees by the state’s universities. If teaching has become less attractive to college students, we would expect the number of teaching degrees to decline. The degree production data here comes from a different source than the data above; therefore, any trends here that mirror the trends above bolster the validity of this analysis.

At their peak in 2011, the state’s colleges and universities awarded 5,328 education degrees specific to teaching. By 2017, the number of teaching degrees dropped to 3,911, a decline of 26 percent. Overall, fewer students are pursuing degrees and certificates in teaching than a decade ago.

Graph: New Jersey college students are earning fewer teaching degrees.
Figure 9

Completers by Institution of Higher Education

While not all teacher candidates pursue degrees in education, institutions of higher education (IHEs) are the primary providers of teacher preparation programs. Federal Title II data break down completers by IHE, allowing us to evaluate program trends and assess which colleges are producing the most teachers.

While there is substantial variation from year-to-year in the number of enrollees and completers, the simplified data here shows the number of teacher prep program completers in 2008-09 and 2017-18. This comparison allows us to look across a substantial number of years at the changes in completion for each IHE.

Graph: Most New Jersey colleges see decline in teacher candidates.
Figure 10

Montclair State University, the state’s largest teacher program provider, has had a modest increase in completers over this time. Rutgers-New Brunswick has had a substantial increase, although much of this occurred within the last year of the available data. In contrast, the largest decline in teacher prep program completers has been at Kean University, which had almost half the completers in 2017-18 than it did in 2008-09. The College of New Jersey (TCNJ), Rowan University, and William Paterson University have also had notable declines.

New Jersey’s private colleges and universities produce far fewer teacher program completers than its public postsecondary institutions. The most notable decline has been at Georgian Court University, which had 319 completers in 2008-09, but only 56 in 2017-18.

These changes occurred at a time when the NJDOE Alternate Route program, which produced 1,819 program completers in 2011-12, was disbanded. Clearly, New Jersey’s colleges and universities were unable to produce an additional equivalent number of teacher candidates to fill the gap left by the “Alternate Route” program.

Conclusions and Recommendations

The data show that fewer people are entering and completing teacher programs. Working conditions and other factors such as the decline in pay (as compared to other professions), eroding benefits, and punitive policies are likely contributing to the shortage. Given the importance of teachers, the decline in teacher candidates should be a serious concern for New Jersey’s education policymakers. The demand for new teachers has returned to pre-recession levels, but the number of available candidates per 1,000 students has decreased significantly, threatening the state’s quality of education in the long-term.

If New Jersey is to retain its rank as one of the best performing statewide school systems in the United States, it must do a better job of attracting teaching candidates – particularly candidates of color.[17] Toward that end, the following changes are recommended:

  1. Teacher compensation must rise to attract the best possible candidates into the profession. If we want to attract high-quality candidates into teaching, we must offer teachers competitive wages. Given the rising costs of earning a degree, college-educated workers have more incentive than ever to seek out careers that will maximize the return on their investment in college tuition.[18] Consequently, if we want great teachers, we must offer them a compensation package that reflects the value of their work. Other sectors face the same challenges when determining how to attract and maintain a high-quality workforce — teaching is no different.
  2. New Jersey must shore up its teacher pension system and stop degrading teacher health care benefits. There is an indisputable wage gap between teachers and other college-educated employees. Good benefits can help close this gap, but New Jersey has, over the past decade, degraded the value of teacher pensions and health care benefits.[19] The decline in enrollees in teacher preparation programs suggests that these policies have had detrimental consequences. The state must take steps to reverse the eroding value of retirement and health care benefits for teachers.
  3. The state should streamline the process of obtaining a teacher certification as much as possible without sacrificing rigor. Whether the state was previously overproducing teacher candidates is an open question. There is little doubt, however, that the number of teacher candidates has decreased while the number of students has stayed the same. New Jersey should review its certification and preparation programs for teachers to determine whether their requirements impede entry into teaching without adding value to a teacher’s training.[20]
  4. All of the state’s teacher preparation providers should continue to work together to attract teacher candidates of color. As previous research shows, there are many benefits to having a diverse teacher workforce.[21] New Jersey has recently made commendable efforts to recruit men of color into the profession. These efforts should be evaluated as quickly as possible and, if found successful, expanded.
  5. New Jersey’s leaders should commit to improving the state’s level of appreciation and regard for its educators. The surest, easiest – and cheapest – way to boost teacher morale is for elected officials to show respect for teachers by acknowledging the importance of their work, giving them a seat at the table when decisions are made about education policy, and refraining from unfairly blaming them for New Jersey’s fiscal troubles.


In a 2018 national poll, 61 percent of superintendents strongly agreed that recruiting and retaining talented teachers would be a challenge for their school district.[22] New Jersey must implement policies to help school district leaders develop and retain the best possible teaching staffs.

Overall, New Jersey’s decline in teacher candidates is a call to action. The state should act immediately to make the teaching profession more attractive, including raising pay, shoring up benefits, and increasing the respect and appreciation shown to New Jersey’s educators.

Technical Appendix

The primary data source for this report is “2019 Title II Reports: National Teacher Preparation Data” from the U.S. Department of Education. https://title2.ed.gov/Public/Home.aspx

Data on teaching degrees is from the Integrated Postsecondary Education Data System (IPEDS), administered by the National Center for Education Statistics. https://nces.ed.gov/ipeds/ To determine the production of teaching-related degrees, I employed this methodology:

  • Include only institutions designated as offering teacher certification.
  • Include only bachelors and masters degrees, and post baccalaureate certificates.
  • Count all degrees awarded in education (cipcode “13”).
  • Count all degrees in curriculum and instruction; educational administration and supervision; educational/instructional media design; educational assessment, evaluation, and research; social and philosophical foundations of education; teaching assistants/aides; and education, other.
  • Subtract this count from the total count of education degrees.

Student counts to determine teacher candidates per 1,000 students are from the New Jersey Department of Education’s fall enrollment files. https://www.nj.gov/education/data/enr/

Staffing counts of novice teachers come from New Jersey Department of Education staffing files, which were obtained through Open Public Records Act (OPRA) requests.

Citations for New Jersey teacher policy changes in Figure 2 are as follows:

About the Author

Mark Weber is the Special Analyst for Education Policy at the New Jersey Policy Perspective. He is also a full-time public-school teacher in Warren Township (where he won the Governor’s Award for Excellence in Education in 2018), and a lecturer at Rutgers University in public school finance. Weber is the author of numerous academic papers on education policy, as well as many policy briefs published by the National Education Policy Center, the Albert Shanker Institute, the Education Law Center, the New Jersey Education Policy Forum, and others. Weber holds a Ph.D. from Rutgers University in Education Theory, Organization, and Policy.

 

End Notes

[1] García, E., & Weiss, E. (2019). U.S. schools struggle to hire and retain teachers. Economic Policy Institute. https://www.epi.org/publication/u-s-schools-struggle-to-hire-and-retain-teachers-the-second-report-in-the-perfect-storm-in-the-teacher-labor-market-series/

[2] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[3] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[4] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, p. 38. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[5] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, pp. 7-8. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[6] Preparing and Credentialing the Nation’s Teachers; The Secretary’s 10th Report on Teacher Quality. (2016) U.S. Department of Education, Office of Postsecondary Education. https://title2.ed.gov/Public/TitleIIReport16.pdf

[7] See the Technical Appendix for citations in this section.

[8] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, p. 36-37. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[9] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, p. 23-25. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[10] State of New Jersey, Department of Education, “New Teacher Guidance.” https://nj.gov/education/newteacher/

[11] Conversation with NJDOE staff, November 25, 2019; thanks to all the staff members who generously gave their time for this conversation.

[12] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, pp. 5-6. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[13] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, pp. 15-19. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[14] Carver-Thomas, D. (2018). Diversifying the Teaching Profession: How to Recruit and Retain Teachers of Color. Learning Policy Institute. https://learningpolicyinstitute.org/sites/default/files/product-files/Diversifying_Teaching_Profession_REPORT_0.pdf

[15] As Carver-Thomas (2018) notes: “An analysis of teacher test design later indicated that cultural bias contributed to disparate test score outcomes. Researchers found that when a version of the NTE general knowledge test replaced traditional questions with test items based on Black culture, Black women scored higher than White women. The reverse was true when questions were drawn exclusively from non-Black culture.” (p.13)

[16] O’Dea, C. (May 13, 2019). “NJ Makes Move to Recruit More Men of Color as Teachers.” NJ Spotlight. https://www.njspotlight.com/2019/05/19-05-12-nj-makes-move-to-recruit-more-men-of-color-as-teachers/

[17] Lloyd, S.C. and Harwin, A. (September 3, 2019). “In National Ranking of School Systems, a New State Is On Top.” Education Week.  https://www.edweek.org/ew/articles/2019/09/04/new-jersey-tops-national-ranking-of-schools.html

[18] U.S. Department of Education, National Center for Education Statistics. (2019). Digest of Education Statistics, 2017 (NCES 2018-070), Chapter 3. https://nces.ed.gov/fastfacts/display.asp?id=76

[19] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, pp. 26-28. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists. See also: Jeffrey H Keefe, “New Jersey Public School Teachers Are Underpaid, Not Overpaid” (Economic Policy Institute, February 15, 2017), https://www.epi.org/publication/new-jersey-public-school-teachers-are- underpaid-not-overpaid/

[20] As an example: in 2015, the state began requiring that teacher candidates participate in edTPA, an evaluation system for teacher candidates that requires the submission of video recordings of teaching as part of a portfolio. Yet a recent evaluation of edTPA calls into question the reliability of its assessments; see: Gitomer, D. H., Martínez, J. F., Battey, D., & Hyland, N. E. (2019). Assessing the Assessment: Evidence of Reliability and Validity in the edTPA. American Educational Research Journal. https://doi.org/10.3102/0002831219890608

[21] Weber, M. (2019) New Jersey’s Teacher Workforce, 2019: Diversity Lags, Wage Gap Persists, pp. 5-6. https://www.njpp.org/reports/in-brief-new-jerseys-teacher-workforce-2019-diversity-lags-and-wage-gap-persists

[22] “Gallup 2018 Survey of K-12 School District Superintendents” https://www.gallup.com/education/241151/gallup-k-12-superintendent-report-2018.aspx

Years of Disinvestment Hamper New Jersey’s Pandemic Response

Posted on by Sheila Reynertson

To read a PDF version of this policy brief, click here.

The COVID-19 pandemic hit New Jersey with a ferocious punch, leaving the state scrambling to contain the spread of the virus, save lives, and provide financial relief to the families and businesses who need it most. Depending on how quickly the state economy gets back on track and how much aid the federal government provides to offset New Jersey’s budget shortfall, many state programs and services are in serious danger of cuts or, worse, elimination. The economic fallout from COVID-19 is a stark reversal of the healthy state economy of the past two years that allowed New Jersey to expand investments in areas like pre-K education, free community college, transit infrastructure, the state’s reserves, and much more. Unfortunately, New Jersey’s recent deposits in its Rainy Day Fund will not be enough to weather this downturn; the state ran out of time, and now the departments tasked with running state government and responding to the COVID-19 crisis are facing an uncertain future, much like the rest of the economy. 

Without proper funding, state government cannot fully serve the needs of the public, especially during a time of crisis when the demand for services is at an all-time high. Unfortunately, New Jersey lacks the reserves to help shore up these departments, as outlined in NJPP’s latest report. Making matters worse, tax revenue from income, sales, and corporate business taxes is collapsing at an unprecedented pace. Federal aid to help state budget shortfalls is essential to contain the damage, but it has yet to be considered in a serious way by Congress. If anything, the crisis has put a glaring spotlight on the damage done by a decade of government disinvestment. To ensure a strong and immediate recovery from the COVID-19 crisis, New Jersey cannot afford to repeat the mistakes of the past.

In response to the Great Recession, New Jersey lawmakers and Governor Christie made brutal cuts to state agencies and public programs, ultimately slowing the state’s recovery. Even before the COVID-19 pandemic hit, these cuts continued to hamper New Jersey’s ability to provide critical services that New Jersey families, communities, and the broader economy rely upon. Taken as a whole, staffing levels across all departments dropped by over 20 percent since the Great Recession in 2008. Today, funding for departments has yet to reach pre-recession levels and, for many, staffing is at a record-low for the past two decades.

Departments of Health and Human Services

During normal times, and especially now in the middle of a global pandemic, the state departments of Health and Human Services ensure the safety and well-being of New Jersey’s most vulnerable populations, including the elderly, the disabled, those in addiction recovery, and children living in deep poverty. Taken together, the Department of Health (DOH) and the Department of Human Services (DHS) now function with less funding (6 percent) and about a third less staffing (30 percent) than they had at the onset of the Great Recession in 2008. 

Without the necessary financial resources and workforce, it is near-impossible for the departments to promote public health. For example, the state is unable to ensure that community hospitals are in compliance with safety standards like adequate nursing staff levels, putting patients and their communities at risk. The lack of adequate resources and proper oversight has also plagued DOH’s medical examiner system, which The Star-Ledger described as a “national disgrace” in their 2017 Death and Dysfunction report. Despite a larger workload in recent years due to the overdose epidemic, the state medical examiner offices have 20 percent fewer employees than 10 years ago. Similarly, local health departments — the frontline of the state’s COVID-19 response — have been underfunded for decades, leaving them ill-equipped to handle the workload in response to the viral outbreak. Compared to other states, New Jersey fell to the bottom quarter for spending per person on local health departments at less than $30 per person. For reference, states like New York and Maryland invest at least $70 per person in local health departments.

Department of Labor and Workforce Development

Once shelter in place became the new norm, much of New Jersey’s economy ground to a halt, with record numbers of residents losing their jobs and closing their businesses. Since the COVID-19 pandemic hit, more than 718,000 New Jersey workers — representing more than 15 percent of the state’s workforce — have filed for unemployment benefits to make ends meet. 

However, many of these workers are unable to file their claims, as the department lacks the necessary staff and resources to handle all of the applications. Inadequate staffing and out-of-date software have paralyzed the department to the point where Governor Murphy has called on retired employees to return to work and help with the backlog. While the state Department of Labor and Workforce Development’s funding has remained stable since the Great Recession, it is operating with far fewer employees now than it did over a decade ago; since 2008, the department has experienced a 25 percent cut in staffing levels. This significant drop flew largely under the radar until now as residents go weeks without receiving their unemployment benefits. 

Department of Community Affairs

Far too many jobs in our economy do not pay enough or provide enough hours for families to meet their basic needs. As a result, thousands of New Jersey families struggle to afford necessities and rely on state assistance to help pay for their utilities and rent. The demand for these services was acute before the COVID-19 pandemic and even more so now as residents lose their jobs and struggle to pay their bills. But an inflation-adjusted 42 percent drop in funding since just before the Great Recession means less resources for the Department of Community Affairs to do its job and help those hit hardest by this crisis. 

By providing low-income households much-needed energy assistance or affordable housing opportunities now, the state could play a vital role in helping the state economy recover more quickly — but only if it has adequate funding to do so. Even the Treasury Department has had to make do with almost half the funding it used to receive, undermining its ability to develop and enforce the tax laws that secure financial resources for all of these departments.

When in a Hole, Stop Digging it Deeper

When state government finds itself in a hole, as it does now in the COVID-19 crisis, cuts will only dig the hole deeper. Scaling back essential government services should not be an option, as the safety net programs administered by New Jersey’s departments and agencies will act as the foundation for the state’s ultimate recovery. To fund these investments and prevent cuts that would be devastating to families in every corner of the state, New Jersey must find new revenue as part of its response to COVID-19 and the resulting economic fallout. We suggest starting with targeted changes to the tax code, like making the income tax more progressive and extending the corporate business tax surcharge, to help fund New Jersey’s recovery.

 

Methodology

State funding figures are from the New Jersey Office of Legislative Services Summary of Appropriations Act and are inflation-adjusted to 2020 U.S. Dollars. Staffing level figures are for full-time employees, according to the New Jersey Department of the Treasury, Office of Management and Budget, Comprehensive Annual Financial Report (CAFR) for FY 2008 to FY 2019, and the Governor’s Budget Message for FY 2009 and FY 2021 . The staffing levels represent total staffing, including positions funded by the state and federal government. State funding and staffing level figures are combined for the Department of Health and Department of Human Services to account for offices and responsibilities that have been transferred from one department to the other over the time period reviewed in this analysis.

Departments of Health and Human Services

In FY 2008, combined state funding for the Department of Health and the Department of Human Services was $8.1 billion; in FY 2020, state funding was $7.6 billion. In FY 2008, total full-time staffing was 17,634; in FY 2019, total full-time staffing was 12,279. In FY 2008, 66 percent of full-time staff were funded by the state and 34 percent were funded by the federal government. In FY 2019, 32 percent of full-time staff were funded by the state and 68 percent were funded by the federal government.

Department of Labor

In FY 2008, state funding for the Department of Labor was $167 million; in FY 2020, state funding was $172 million. In FY 2008, total full-time staffing was 3,418; in FY 2019, total full-time staffing was 2,547. In FY 2008, 6 percent of full-time staff were funded by the state and 94 percent were funded by the federal government. In FY 2019, 6 percent of full-time staff were funded by the state and 94 percent were funded by the federal government.

Department of Community Affairs

In FY 2008, state funding for the Department of Community Affairs was $1.6 billion; in FY 2020, state funding was $923 million. In FY 2008, total full-time staffing was 1,129; in FY 2019, total full-time staffing was 849. In FY 2008, 15 percent of full-time staff were funded by the state and 85 percent were funded by the federal government. In FY 2019, 10 percent of full-time staff were funded by the state and 90 percent were funded by the federal government.

Promoting Equal Opportunities for Children Living in Poverty

Posted on by Raymond Castro

To read a PDF version of the full report, click here.

Temporary Assistance for Needy Families (TANF) is New Jersey’s only program designed to protect low-income families with children during their times of greatest need, acting as a critical bridge to stability and a shield against the harms of deep poverty. Programs like TANF that help stabilize the take home pay of low-income families have long-lasting effects on a child’s ability to succeed in school, get a high school or college degree, and find work as an adult. By increasing the state’s inadequate TANF grant levels, lawmakers could improve maternal and child health, which will have major short- and long-term benefits for families in every corner of the state. 

TANF does not provide the full supports that parents need to obtain the jobs that will permanently lift their families out of poverty. In fact, the ability to protect families in deep poverty has been undercut by many state and federal policies. This can be traced back to 1996 when Congress replaced the New Deal-era Aid to Families with Dependent Children (AFDC) program with TANF block grants. Intended to drastically limit basic assistance to struggling families, the federal TANF law set fixed federal funding, placed a five-year lifetime limit on TANF benefits, implemented punitive and ineffective work requirements, and included other harmful policies that further impoverish children and place enormous stress on families.

Making matters worse, New Jersey established its own enabling legislation in 1997 (P.L.1997, c.13) with harsher restrictions than required under federal law, resulting in an incredible 91 percent drop in enrollment from 102,000 families in 1996 to 13,000 in 2018. Prior to TANF, New Jersey assisted 93 out of 100 families below the federal poverty level compared to the national average of 72 families out of 100. In 2017-2018, the state was only assisting 15 out of 100 families living below the federal poverty level, which was below the national average of 22 families out of 100. In other words, New Jersey fell from one of the top performers in helping low-income families to one of the worst. The table in the appendix shows the incredible harm that TANF has caused in eliminating basic assistance to 180,000 children by county through 2019.

Despite recent increases in TANF benefits, they remain woefully inadequate for families living in poverty, especially since New Jersey has one of the highest costs of living in the nation. In fact, New Jersey ranks only 32nd in TANF benefits as compared with all states when housing costs are considered.[1] While this is a significant improvement as compared to the rank of 43rd in 2017 before the most recent increases in TANF benefits, New Jersey still has far to go.[2]

By reinvesting in TANF, state lawmakers choose healthier kids, safer families, and stronger communities where everyone has what they need to contribute and thrive. This report describes commonsense changes that would correct some of the flaws in the state TANF program and extend the reach of TANF to help many more families in New Jersey climb out of
poverty. 

The good news is that TANF allows states considerable flexibility to make changes in the program. The Legislature and governor have recently started to make improvements in TANF by increasing the assistance levels by 32 percent over the last year through 2020. This is the first increase in three decades and progress that can be built upon. The current administration, under Governor Murphy, is also emphasizing more education and training (E&T) in TANF instead of placing parents in dead-end work activities that lack opportunities to secure employment and long-term economic success. However, much more than that will be needed to turn around a program that was neglected for decades and made worse at the federal level.

The Importance of Reducing Child Poverty

Surprisingly, there is no state statutory goal in TANF to lift families out of poverty. Historically, the practice has been to get families off TANF as soon possible, which often forces enrollees to take any job, even if the pay is inadequate to support a family. Because of this narrow goal, the state has viewed a reduction in the TANF caseload as a success even when child poverty was increasing. This means that families often remain in poverty or even cycle back onto TANF. Research shows that kids who spend most of their childhood in poverty are 45 percent more likely to live in poverty at age 35 than children who live in poverty for only one year.[3] In other words, the less time in poverty, the more likely the cycle of poverty can be broken.

Although New Jersey has increased TANF benefits over the last two years, the state’s historic TANF policy of discouraging full economic opportunity is cruel, shortsighted, and discriminatory. It also does not make any economic sense because the best investment a state can make is in its children. The following are some of the benefits of reducing child poverty:

Reduces public costs in the long run

Chronic poverty causes devastating and long-term harm to children that costs the nation an estimated $1 trillion in economic activity, health, and crime.[4] The National Academies of Science, Engineering, and Medicine’s 2019 report, “A Roadmap to Reducing Child Poverty,” provides the first consensus declaration by the scientific community on the causal connection between growing up with adequate family income and positive outcomes for children that lay the foundation for better health and higher earnings in adulthood.[5] We either invest in our children now or pay much more later on.

Improves maternal and child health

Extensive research has conclusively shown the strong link between family income and infant mortality and children’s health.[6] Children born to low-income mothers have the highest rate of low birth weight. Children in poor families are four times more likely to be in poor or fair health compared to higher income kids. By directly giving pregnant mothers cash assistance, they have the flexibility to spend more of their limited income on things that lead to better health such as transportation to doctor appointments, safer housing, over the counter medications, diapers, and better nutrition. Improving health for families is especially important in New Jersey given that the state has consistently scored poorly in maternal and child health, especially for Black families. As long as pregnant mothers and parents of newborns suffer the stress of extreme poverty, New Jersey’s efforts to reduce infant mortality will be limited.

Reduces racial and ethnic income disparities.

New Jersey is a wealthy state, but wealth is not shared equally or fairly. This is especially true for kids in poverty. Due to historic discrimination, such as in housing, employment, and education, Black and Hispanic kids do not have the same opportunities white kids do. In fact, about two-thirds of all New Jersey children in poverty are Black or Hispanic, as Black and Hispanic children are more than three times more likely to live in poverty than white kids.[7] As a result, 8 out of 10 children on TANF, the poorest of the poor, are either Black or Hispanic. Failure to improve TANF means continuing to discriminate against these kids of color and robbing them of their birthright to equal opportunity. Addressing this problem would also help to reduce major income inequality, where New Jersey is ranked the seventh worst in the nation.[8]

Improves the economy 

Child poverty is a drag on New Jersey’s economy and makes the state less competitive because parents are not working or do not have opportunities for good paying jobs. There are also employers who do not want to train their employees because they do not want to invest in them to only have them leave for other jobs, which is also problematic. This could be reduced by improving TANF so it better provides the E&T that parents need. In addition, increasing TANF benefits would stimulate local economies where it is needed the most. Research shows that providing direct assistance to low-income people is one of the most effective ways to stimulate the economy because the money is spent quickly and directly in local communities.[9] State expenditures have decreased by over $5 billion since TANF was established, which has not only harmed thousands of poor families but the economies of low-income communities as well.[10]

Common Sense Measures to Improve TANF

1. Ensure that no families on TANF remain in deep poverty

The current level of NJ TANF benefits ($559 a month for a family of three) is only one-third of the federal poverty level, guaranteeing that families continue to live in deep poverty, defined as below half of the federal poverty level. This remains true despite the state increasing TANF benefits by 32 percent over the last two years. The low benefit level also costs the state more for many families because they cannot afford any housing and end up receiving much more expensive emergency assistance in a shelter or other arrangements to avert homelessness.

Solution: Require a set annual increase in TANF benefits so it reaches 50 percent of the federal poverty level within three years for each household size. For every year after, automatically adjust the TANF benefit for inflation.

2. Get families off the caseload and out of poverty

Historically, the goal of TANF has been to get a family off TANF as soon as possible, regardless of the outcome. As a result, parents are pressured to take jobs that are so low paying or temporary that the family remains in poverty and may be forced to return to TANF. Previous governors, therefore, have measured the success of TANF not by how many families in poverty have been helped but rather how quickly the caseload can be reduced regardless of the number of families that need assistance. This goal has resulted in punitive policies and practices in TANF that can make it a bureaucratic nightmare. The state also does not follow employment or earnings outcomes for families who left TANF to determine if TANF was successful in promoting economic independence.

Solution: In addition to federal TANF goals, the state should add the goal of lifting families out of poverty. To measure that goal, the state should be required to monitor the employment rates and earnings of families that leave TANF, including identifying where TANF leavers fall with respect to various percentages of the federal poverty level.

3. Provide better supports for children 

Historically, TANF has focused on parents rather than the whole family. In fact, TANF often punishes children to get their parents to comply with the many TANF rules. For example, if a parent does not meet the rigid work requirements, the parent loses his or her assistance in the second month and the child loses assistance by the third month if the parent is still non-compliant or cannot find suitable employment. Further, if a parent is denied assistance because they have reached the five-year limit, the child is also denied assistance as long as the child lives with the parent. In 2017, benefits were taken away from 328 families who reached the arbitrary time limit.[11] This increases stress and homelessness, which threatens family stability. Continuing to provide benefits to children will increase costs, which could be from state or federal TANF funds, but it is one of the best investments the state can make.

Solutions:

  • Only end TANF benefits for the parent when the parent is not in compliance with work activity but continue to provide them to the child.
  • Restore parents’ reduced TANF benefits due to a sanction if the parent becomes in compliance within 60 days.
  • Allow children to continue to be eligible for TANF even when their parents have reached the five-year TANF limit, encouraging home and family stability. The state can use federal funds so long as no more than 20 percent of caseloads are over the five-year limit. The state can also use existing state funds for these kids.
  • Exclude parents from the five-year TANF limit if they have followed all the TANF rules and continue to do so.
  • Expand quality childcare and provide adequate information to parents to ensure they can identify such care.

4. Increase child support payments

Currently New Jersey and the federal government keep all the child support that is paid to a family on TANF except for the first $100 a month regardless of how many kids are in the family. In 2020, the state and federal government estimates that they will collect $24 million in child support whereas kids will only receive $2 million in New Jersey.[12] This not only shortchanges the kids who live in deep poverty, it also means that the non-custodial parent is less likely to pay the full support because they know most of it would not go to their child. Recent research shows that when children on TANF are allowed to receive their full child support payments, those payments increase.[13] Therefore, New Jersey should accept the federal government’s offer to waive its share of the child support collected for up to $200 a month (when there are two or more children) when the support is passed through to the family and disregarded as income. This waiver of the federal share of collected support makes increasing the amount of child support passed through to the family at essentially half-price to the state.

Solution: Increase this child support pass through to $200 for families with two or more children, which will benefit the children and encourage non-custodial parents to pay more in child support.

5. Provide the education and training parents need for better jobs

Historically, in order to meet TANF’s work requirements, more parents have been placed by the state, sometimes without pay, in job search activities or the Community Work Experience Program (CWEP) than in education and training programs. This policy too often results in “make work” placements that perpetuate poverty and creates enormous stress for the parents who in some cases have little or nothing to do in their CWEP placement. Unfortunately, because of the declining caseloads due to harsher requirements and greater reliance on CWEP, fewer parents are receiving E&T in TANF.

Solutions:

  • Prioritize education and training with the goal of getting parents to qualify for livable wage jobs that lift families out of poverty.
  • Expand existing options for E&T to provide parents with the skills that are needed for growing New Jersey industries, such as through apprenticeships, internships, work study programs and other opportunities as well as greater utilization of community colleges. A large body of research has shown that sectoral-based skills training programs can result in major gains in employment and wages for low-income adults who have the most difficulty finding jobs.[14]
  • Restrict the time period in CWEP placements to 6 months within any 12-month period.
  • Allow placements with for-profit entities to satisfy “alternative work experience,” provided that they are limited to 6 months and will likely lead to full-time employment with the employer.
  • Require businesses that receive state tax incentives to collaborate with local community organizations that provide support to TANF participants in the form of work-study, apprenticeships, internships, sector-based contextualized literacy training, skills-based training in growing New Jersey industries, and/or job-retention and advancement services.

6. Eliminating work requirement provisions that are much harsher than required by federal law

Federal rules require a parent to participate in a work activity for 30 hours a week, or 20 hours if their child is under six, but the state goes beyond that by requiring between 35 and 40 hours in unpaid work placements.[15] This higher hourly requirement is not always realistic for parents; for example, a parent who must also take their children on a bus to childcare then take another bus to participate in a work activity. Also, while federal policy allows a state to exempt parents of infants from work activities for up to 12 months, New Jersey only allows three months. The current state requirements often set up parents for failure and make it impossible for them to support and bond with their children, which is critical for their development. TANF sanctions historically have been the leading cause of case closures.[16]

Solution: Consistent with federal rules, allow parents with infants to be exempt from work requirements for up to 12 months, and reduce the current 35-hour week work requirement to 30 hours, and 20 hours if their child is below age 6.

7. Improving case management

Because of the five-year lifetime limit on TANF, it is critical that families receive supportive case management to ensure that the parents have all the resources they need to find good jobs before that limit is reached. Currently, participants who reach their 48th month of assistance must participate in the Supportive Assistance to Individuals and Families (SAIF) program. This program provides intensive case management for families who have been unable to become independent due to multiple barriers to employment.[17] While this has helped some families, it has been reported that it starts too late, and can sometimes mean parents have to meet even more requirements, which can cause them to just give up in frustration.

Solution: Offer additional case management and supportive services, based on an assessment of their barriers to securing employment, once a parent reaches a total of 36 months of enrollment.

8. Broadening TANF eligibility for lawfully present immigrant families

The New Jersey law sharply limits which immigrant children or parents that are lawfully present in this country are eligible for TANF. For example, immigrant children and parents who have been in the U.S. for five years or less are ineligible for TANF. People who were born outside the U.S. have the same needs as native-born people from New Jersey who live in poverty and should not be discriminated against. Excluding immigrants is also antithetical to the state’s public message that it welcomes them. Moreover, studies have shown that immigrants strongly contribute to the state’s economy.

Solution: Make all immigrant children and their parents who are lawfully present in this country eligible for TANF and who otherwise meet TANF eligibility standards.States can use state   funds but not federal TANF funds for those immigrants who were made ineligible or excluded for five years under the 1996 law.  

9. Improving the exit ramp off of public assistance to support work

It is important that a family’s TANF benefits be reduced gradually once the parent obtains a job to avoid a “cliff,” which is when a small increase in income from a job causes a disproportionate drop in TANF benefits, causing the family to be worse off financially. This cliff also becomes a disincentive to increasing hours or accepting potential raises. The current policy allows the parent to keep their full TANF benefits in the first month of employment, which is then phased down in subsequent months. The phase down rules differ for part-time and full-time workers, which is confusing for the parents and even the case workers. Simpler policies that also do not start grant reduction until after two months of earnings will allow TANF families time to stabilize their family budget after getting a new job.

Solutions:

  • Increase the current incentive for employment by allowing the employed family to receive their full TANF benefits for two months.
  • Remove some of the limits on how many times the earnings disregards can be applied.
  • No longer count the time receiving TANF due to earnings disregards towards the five-year time limit on TANF. While the federal TANF rules do not have a “stop the clock” provision, a state can choose when to run time or stop time clocks so long as not more than 20 percent of the caseload receive federal TANF funds beyond 60 months. Most working families do not stay on TANF for five years, but if the state chose, it also could simply use state funds to serve families whose clocks are stopped.

Conclusion

Collectively, these policies would provide a boost in basic assistance that gives families needed flexibility to use the income in the ways that best help their household live in a high cost of living state like New Jersey. This means diapers, medicine, clothing, bus fare, school supplies, rent and utility payments, car repairs, and more. Income matters: when Black, Brown, and white families struggling to meet their basic needs get more income, their children have a better chance of growing up healthy and with an opportunity to thrive.

TANF is the main income assistance program for families experiencing extreme financial hardship, and it can play a key role in ensuring that they are able to climb up and out of poverty. When we support the well-being of our neighbors, we make sure that everyone can reach their full potential and contribute to our communities.

Appendix

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End Notes

[1] Ashley Burnside, Ife Floyd, More States Raising TANF Benefits To Boost Families’ Economic Security, December 9, 2019, https://www.cbpp.org/research/family-income-support/more-states-raising-tanf-benefits-to-boost-families-economic-security

[2] Center on Budget and Policy Priorities, TANF Cash Benefits Have Fallen By More Than 20% In Most States And Continue To Erode, October 13,2017 https://www.publicnow.com/view/71F8C9CD6D0CC646ABAF4FF08EB28C609F63ABC9

[3] Department of workforce services, Inter-Generational Poverty In Utah 2012, Department of workforce services, Inter-Generational Poverty In Utah 2012, https://jobs.utah.gov/edo/intergenerational/igp12.pdf

[4] Michael McLaughlin, Marc Rank, Estimating The Economic Cost Of Childhood Poverty In the United States, March 30, 2018, https://academic.oup.com/swr/article-abstract/42/2/73/4956930?redirectedFrom=fulltext

[5] The National Association of Sciences, Engineering, Medicine; Consensus Study Report, A Roadmap To Reducing Child Poverty, 2019, https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-poverty

[6] Stephen Woolf, et al, How Are Income and Wealth Linked To Health And Longevity, April, 2015, wealth https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf

[7] The Annie E. Casey Foundation, Children In Poverty By Race And Ethnicity In New Jersey, 2018, Richard Barrington, Moneyrates, States with the Lowest And Highest Income Inequality, April 3, 2019,  https://datacenter.kidscount.org/data/tables/44-children-in-poverty-by-race-and-ethnicity?loc=32&loct=2#detailed/2/32/false/37,871,870,573,869,36,868,867,133,38/10,11,9,12,1,185,13/324,323

[8] Elizabeth McNichol, How State Tax Policies Can Stop Increasing Inequality and Start Reducing It, December 15, 2016, https://www.cbpp.org/research/state-budget-and-tax/how-state-tax-policies-can-stop-increasing-inequality-and-start

[9] Sarah Rinehart, SNAP Is A Boon To Urban And Rural Economies. Proposed Farm Bill Changes Could Cripple Them, July 5, 2018, https://civileats.com/2018/07/05/snap-is-a-boon-to-urban-and-rural-economies-proposed-farm-bill-changes-could-cripple-them/

[10]Raymond Castro, Lost Opportunities For New Jersey Children, February 11, 2016, https://www.njpp.org/reports/lost-opportunities-for-new-jerseys-children

[11] New Jersey Division of Family Development, WorkFirst NJ, Quarterly Progress Update, December 2017, https://www.state.nj.us/humanservices/dfd/news/wfnj_%20dec17.pdf,

Development, WorkFirst NJ, Quarterly Progress Update, September 2017, https://www.state.nj.us/humanservices/dfd/news/wfnj_sept17.pdf, https://www.state.nj.us/humanservices/dfd/news/wfnj_june17.pdf , New Jersey Division of Family Development, WorkFirst NJ, Quarterly Progress, June, 2017, https://www.state.nj.us/humanservices/dfd/news/wfnj_mar17.pdf

[12] Governor’s FY 2020 Budget.

[13] Colorado Office of Performance and Strategic Outcomes, Evaluating the Effect Of Colorado’s For Support Pass-Through Policy, 2019-2019, https://drive.google.com/file/d/1lh2NsnwZP27eoZEjOPpHtUKMs2qOUW65/view

[14] Tazra Mitchell, Research Note: Sectoral Skills Training Programs For Low Income Workers Can Yield Sustained Earnings and Employment Gains, New Evaluation Finds, June 20, 2017, https://www.cbpp.org/research/family-income-support/research-note-sectoral-skills-training-programs-for-low-income

[15] New Jersey Division of Family Development, New Jersey State Plan For Temporary Assistance For Needy Families, FFY 2015 To FFY 2017,  https://www.nj.gov/humanservices/dfd/programs/workfirstnj/tanf_state_plan_15-17.pdf, p. 14

[16] In the last quarter alone in 2017 1057 parents were sanctioned, New Jersey Division Of Family Development, WorkFirst NJ, Quarterly Progress Update, December 2017, sanctioned. https://www.state.nj.us/humanservices/dfd/news/wfnj_%20dec17.pdf

[17] New Jersey Division of Family Development, New Jersey State Plan For Temporary Assistance For Needy Families, FFY 2015 To FFY 2017, https://www.nj.gov/humanservices/dfd/programs/workfirstnj/tanf_state_plan_15-17.pdf, .p.21

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