Category: Testimony

Access to Affordable, Quality Child Care Enables Families to Lead Full Lives

Posted on by Peter Chen

Good morning. I’m Peter Chen and am a Senior Policy Analyst at New Jersey Policy Perspective (NJPP). New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and strategic communication.

NJPP supports A4747, and encourages further work to increase child care availability for parents who need it.

New Jersey’s lack of supply for child care, especially for infants and toddlers is well-documented. Based on the most recent market-rate study, enrollment in licensed child-care centers is roughly 10,000 for infants and 17,500 for toddlers. Meanwhile, the population of children under 3 in the same time period was over 300,000.

The problem is widespread, with 46 percent of New Jersey residents living in a child care desert, where there are three times as many children as licensed child care slots, according to analysis by the Center for American Progress.

Although these deserts include urban, suburban, and rural areas, they disproportionately exist in lower-income neighborhoods.

New Jersey families and children can only achieve true freedom to live their lives to their full potential if they have accessible, affordable, quality child care. Improving access in these child-care deserts, whether through the use of incentive payments, contracted slots, expansion of Early Head Start, or other methods, will help ensure that child care is not a luxury, but a necessity.

Thank you for this opportunity to testify today.

New Jersey Should Prioritize the Health of Kids and Families in the FY 2023 Budget

Posted on by Brittany Holom-Trundy

Good morning, Acting Commissioner and DHS team. Thank you for this opportunity to provide my testimony on the FY2023 budget for the Department of Human Services. My name is Dr. Brittany Holom-Trundy, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

The Department of Human Services has led the way in providing security for New Jersey residents throughout the pandemic. The policies passed, expansions of coverage and outreach, and programs initiated have helped to increase food security, better protect maternal health, help families maintain access to child care, and improve home- and community-based services, just to name a few. Today, I am here to highlight three priorities for the department to consider when building on these advancements.

Cover All Kids Implementation
With the passage of the Cover All Kids legislation, the opportunity for achieving universal health coverage for New Jersey children is finally within reach. The Department’s support of this initiative has been key to its success. NJPP urges DHS to continue this commitment by investing at least $20 million in the expansion of coverage to undocumented children as planned for July 2022 and for the broader expansion of coverage options through NJ FamilyCare Advantage. Key to this process will be ensuring that all newly eligible children receive the same benefits at the same cost as those children who are eligible now, as well as finding new methods of outreach to ensure all families have access to information through reliable, trusted sources. A $20 million investment should provide sufficient support for estimated first-year enrollment for undocumented children, as well as provide an increase in funding for outreach for these harder-to-reach populations.

TANF
Beyond health insurance, providing support to escape deep poverty is key to children’s and family health. NJPP encourages the Department to consider how to improve the TANF program to better provide this support and move TANF beyond its racist history. By investing $27 million, the Department can help to gradually increase the monthly grant amount to at least 50 percent of the federal poverty level, reduce work hour requirements to better meet families’ realities, eliminate barriers for documented immigrants, and ensure that children and parents are lifted out of deep poverty.

Child Care
NJDHS has been at the forefront of ensuring support for the child care system during the public health emergency, with substantial financial support for child care providers and families. NJPP urges the department to continue or expand some of these successful program changes, including paying child care subsidy providers by enrollment, not by attendance. Child care providers need stability in subsidy payments, and a long-term solution to ensure pay-by-enrollment is critical to the health of the child care system.

The pandemic has highlighted long-standing issues in the child care system, including low staff salaries, lack of infant-toddler care access, and insufficient data systems. Each of these areas will require creative solutions and judicious usage of federal and state funds to support staff hiring and retention, encourage the development of infant-toddler care supply in “child care deserts” and build more robust DHS data infrastructure.

Food Security, Home- and Community-Based Services, Harm Reduction, and More
With the aforementioned priorities, as well as continued long-term investments and improvements in SNAP, Home- and Community-Based Services, harm reduction, and support for New Jersey’s immigrant communities, the Department can ensure that the Garden State continues to be a place where all families can live their best lives.

Harm Reduction Programs Provide Lifesaving, Critical Care to New Jersey Residents

Posted on by Marleina Ubel

Good morning, Chairman Conaway, Vice-Chairwoman Jimenez, and members of the committee. My name is Marleina Ubel and I am a Policy Analyst at New Jersey Policy Perspective (NJPP). Thank you for this opportunity to submit testimony on New Jersey’s expansion of harm reduction programs (A4847).

NJPP works to improve the lives of all New Jersey residents through research and advocacy; in line with this mission, we support A4847. This bill helps to ensure that every person has access to the lifesaving and evidence-based resources harm reduction services provide.

Even before the pandemic, New Jersey faced an alarming overdose crisis where far too many residents lost their lives. I imagine we all know of at least one person — whether it be a family member, friend, or community member — who did not get the care they needed before it was too late. Now, this crisis has been exacerbated by the pandemic, and New Jerseyans who use drugs are dying at greater rates than ever before. And while New Jersey is not alone in facing these concurrent crises, our state has one of the highest rates of fatal overdose since the start of the pandemic.

Harm reduction programs reduce the risk of overdose as those who have access to these programs are 5-times more likely to start drug treatment programs and 3-times more likely to stop chaotic substance use. Moreover, individuals with access to harm reduction programs are half as likely to acquire HIV or Hepatitis C as those who do not have access to harm reduction programs, increasing the overall health of our communities.

In a state with 9 million residents, there are only seven harm reduction programs. The Legislature can take steps to prevent unnecessary loss of life and reduce the spread of infectious disease by voting yes on A4847.  It is well past time to decriminalize public health and make harm reduction services available to those who are most in need.

Thank you for your time and the opportunity to testify.

Expanding the Child and Dependent Care Services Tax Credit Enables Children, Families, and the Economy to Succeed

Posted on by Peter Chen

Good morning. I’m Peter Chen and am a Senior Policy Analyst at New Jersey Policy Perspective (NJPP).

I am testifying today in support of A-6071, which expands the child and dependent care tax credit to a wider range of households, many of whom will now see more money back to assist with high child care costs. NJPP commends the Legislature for its commitment to helping families meet the high cost of child care, and for recognizing the critical role child care plays in enabling children, families, and New Jersey’s overall economy to succeed.

However, I would like to highlight a few areas where this legislation could be improved, either in this session or in revisions in a later session. These suggestions focus on four key areas: 1) focusing the credit’s benefits more heavily on low-income families, 2) permitting easier filing for those claiming informal care expenses, 3) ensuring permanent implementation (as opposed to the Senate version which was voted out of committee), and 4) do not sunset the credit after one year.

1. Focus on low-income families’ expenses

Although child-care expenses are high across all income ranges, there is a remarkably high floor for any child care that complies with basic health and safety standards.

The state’s most recent child-care market rate study (required by federal law to help establish appropriate child care subsidy payment rates) indicates that even in the lowest-cost “cluster” of communities, a median infant care provider cost $800 per month, or nearly $10,000 annually.[i]

It should come as no surprise, then, that low-income families pay a much higher percentage of their income towards child care.

Income relative to federal poverty level Average weekly child care expenditures Share of families’ income spent on child care

Less than 200% FPL

~$50k for family of four

 $188 35%
200-399% FPL

~$50-100k for family of four

 $197 14%

400-599% FPL

~$100-150k for family of four

 $224

10%

Source: Rasheed Malik, Center for American Progress, Working Families Are Spending Big Money on Child Care (2019).

The above table shows how low-income families spend a much higher percentage of income on child care, and spend only marginally less on child care than their moderate-income peers.

However, based on the proposed legislation, people in the lowest levels of poverty, earning less than $20,000 annually, would be eligible for the same percentage of the federal credit as they did the year before. Meanwhile, households in the upper-income ranges of eligibility, who would not previously have qualified, could receive substantial benefits, especially with the larger federal credit under the American Rescue Plan.

NJPP acknowledges that middle-income and upper-income families also need state investment in child care in order to manage their high costs, and that these families rarely qualify for other child care assistance. Nonetheless, the harshest impacts of child care costs largely fall on the lowest-income New Jerseyans, who benefit only slightly from this new legislation.

2. Expand coverage of informal care

Because New Jersey’s credit builds on the federal, we rely on the federal definition for child care expenses. Yet these definitions and administrative requirements may leave out home-based, relative, or informal providers, who low-income families disproportionately employ for cost, flexibility, or availability.

For example, in order to claim the federal credit, a household must identify the tax identification number of the child care provider. Failure to furnish a correct number may result in a penalty for the provider.[ii] Additionally, an informal provider is less likely to provide the kinds of receipts and paperwork that licensed centers provide.

A more equitable child and dependent care tax credit should more flexibly define what qualifies as a care-related expense.

3. Build in tax outreach for potentially eligible households

Given extensive provision of family and child benefits through the tax code, the importance of easy tax filing without red tape for low- and moderate-income families has never been higher. Estimates suggest that up to 40 percent of eligible New Jersey families may be missing out on Child Tax Credit benefits, blunting the anti-poverty effects and highlighting the lack of tax filing assistance capacity and outreach for these families.

Even under the current definition of child care expenses, many households may have expenses that they do not realize qualify them for substantial benefits, particularly families who are non-filers or who do not realize that informal care can still qualify for the credit as long as the household can document those expenses.

A robust outreach effort (along the lines of paid family leave, the state health insurance marketplace, and other state-run programs focused on maximum usage) through child care providers and other community-based organizations could increase the impact of the tax credit for low-income families.

4. Do not sunset the credit at one year

Family child care expenses will not end when tax year 2021 ends. Indeed, all signs indicate continued upwards growth in child care expenses. It was therefore disappointing to see the Senate version approve a one-year sunset on these changes. NJPP urges the committee to leave the credit for future years, as part of a broader set of tax credit reforms to help all families succeed.

Thank you for this opportunity to testify today.

[i] Jeounghee Kim & Myungkook Joo, 2017 New Jersey Child Care Market Rate Price Study, at p. 26, available at https://www.childcarenj.gov/getattachment/Resources/Reports-and-Statistics/2017-New-Jersey-Child-Care-Market-Price-Study-pdf.pdf.aspx?lang=en-US

[ii] See Internal Revenue Service, Form W-10, https://www.irs.gov/pub/irs-pdf/fw10.pdf

It’s Time to Decriminalize Syringes and Expunge Past Records

Posted on by Marleina Ubel

Good morning, Chairman Mukherji, Vice-Chairwoman Murphy, and members of the committee. My name is Marleina Ubel and I am a Policy Analyst at New Jersey Policy Perspective (NJPP). Thank you for this opportunity to submit testimony on New Jersey’s decriminalization of syringes and expungement of past records (A5458).

As I am sure you are aware, NJPP works to create a more equitable state for New Jersey residents through research and advocacy. In line with this mission, we support A5458. This bill is a step towards breaking the cycle of punishment, debt, and stigma for people living with a substance use disorder.

Syringes are also public health tools. Access to new syringes reduces the risk of skin infections and infectious diseases, such as, HIV/AIDS and Hepatitis C. Criminalizing syringes also puts first responders at greater risk for infections because people have to hide or improperly dispose of syringes due to fear of arrest.

Despite New Jersey law legalizing the purchase of syringes without a prescription, New Jerseyans continue to be charged for syringe possession, creating a system where people are arrested for possessing public health supplies that were legally purchased.

The Legislature can take steps to break the cycle of criminalization and reduce the spread of infectious disease by voting yes on A5458.

Thank you for your time and the opportunity to testify.

Pandemic Relief Funds Must Be Used to Dismantle Racial, Gender, and Economic Inequities

Posted on by Sheila Reynertson

The following testimony on American Rescue Plan funds was delivered before Governor Murphy’s American Rescue Plan virtual hearing on July 28, 2021. 

Good morning. I’m Sheila Reynertson and am a Senior Policy Analyst at New Jersey Policy Perspective (NJPP), a member of the For the Many NJ coalition. Thank you for the opportunity to testify on how best to administer the remaining $4 billion in Fiscal Recovery Funds (FRF) made available through the federal American Rescue Plan.

NJPP is fully aligned with the U.S. Treasury’s recommendation to use these flexible funds to “foster a strong, inclusive, and equitable recovery, especially with long-term benefits for health and economic outcomes.” The most effective way to achieve such a goal is to target aid to those most in need and begin dismantling racial, gender, and economic inequities exacerbated by the pandemic.

Here are a few essential ways to make the most of this opportunity. For more recommendations, please refer to the letter signed by organizations of the For the Many coalition.

Strengthen the Social Safety Net

New Jersey must be aggressive in reversing the pervasive barriers that keep the safety net out of reach for some families and allow poverty to remain widespread. Benefit programs are difficult, and sometimes impossible, to navigate for residents already under extreme stress. Unnecessary red tape for those struggling to find a job, feed their kids, or manage a health crisis is both punitive and regressive.

NJPP recommends using FRF dollars to spearhead a robust outreach campaign and application assistance for all social safety net and support services, targeting communities that face systemic barriers to learning about and accessing support programs, including immigrants and people of color with low-incomes as well as families in deep poverty who are less likely to owe and file taxes and, as result, may miss out on tax credits for low-paid workers and their families.

Provide Direct Cash Assistance to Residents Who Need It Most

Second, NJPP recommends using relief funds to stabilize residents facing hardship and keep their children safe from the long-term effects of deep poverty. The most straightforward way to boost household income of families who are living paycheck to paycheck is to provide direct cash payments with no strings attached — and regardless of immigration status. In fact, one targeted population that must be included is the nearly a half million undocumented immigrants who have been excluded from almost every form of state and federal relief for the past seventeen months. New Jersey can provide relief to these residents by fully funding the Excluded New Jerseyans Fund.

Support Low-Paid Essential Workers with Bonus Pay

It can’t be said enough: Those who worked outside of their home during the pandemic providing critical services like health care and food production were overwhelmingly women and people of color — and they often went without basic health and safety protections, paid leave, or hazard pay. These workers deserve recognition through fair compensation, yet they have been repeatedly overlooked in federal relief and recovery legislation. New Jersey can rectify this using FRF dollars to provide bonus pay to those with limited income and those who worked in difficult and often dangerous conditions so the rest of us could quarantine safely at home.

Advance Health Equity

Past policies and continuing racism in health care — the effects of which were on full display during the COVID-19 pandemic — have disproportionately burdened Black, Hispanic/Latinx, and indigenous populations. The physical and emotional toll of such disparity will be felt for years to come. NJPP recommends using FRF dollars to break down barriers and expand access to high-quality and affordable mental health care services for adults and children through provider recruitment efforts, insurance expansion, and improved Medicaid reimbursement. To reach chronically underserved low-income areas and Black and Hispanic/Latinx communities, fund mental health outreach efforts through community-based organizations. To reach pandemic-stressed students in high-poverty schools, provide enhanced payments for behavioral screenings and school counselors and mental health professionals.

Incorporate Racial Impact Analysis into Selection Process and Data Collection

Finally, even with the best of intentions, New Jersey’s distribution of these recovery funds is likely to exacerbate racial injustice without intentional strategies to do otherwise. To demonstrate a commitment to an equitable recovery, NJPP recommends that racial equity impact assessments be produced for FRF grants that have a potential racial impact. New Jersey can also foster a culture of advancing racial and gender equity by improving its data collection with data on gender, race, and ethnicity. By modernizing the IT infrastructure across departments, New Jersey can enhance the quality of administrative data to better evaluate existing programs and demonstrate transparency.

These recommendations would make the biggest difference in providing long-term benefits for communities most at risk of being left behind and laying the groundwork for a more prosperous future for all New Jersey families.

Thank you for this opportunity to testify today.

Structure of New Emerge Tax Credit Program Must Prioritize Equity and Transparency

Posted on by Sheila Reynertson

The following comments on the draft Emerge program rules were delivered to the Economic Development Authority on April 16, 2021.

New Jersey Policy Perspective (NJPP) has researched and analyzed the state’s economic development programs for over twenty years. We closely monitor the tax credits awarded by the state Economic Development Authority (EDA), how many jobs created and maintained the state gets in return, and regularly compare New Jersey’s corporate subsidy programs — and the laws that guide them — against those in other states across the nation.

These comments on draft rules implementing the new Emerge program under the New Jersey Economic Recovery Act are intended to ensure the job creation program is structured and administered in an equitable and transparent manner. The following feedback focuses on seven sections of the proposed rules including application requirements, review process, community benefit agreement, and evaluation transparency.

19.31-22.3(a)5 Eligibility criteria

“The award of tax credits, the capital investment resultant from the award of tax credits, and the resultant creation and retention of new and retained full-time jobs will yield a net positive economic benefit to the State…”

Given that the EDA’s “net benefit” methodology is hidden from public scrutiny, a debate about who is most qualified to analyze them or about the standards being used to estimate the efficiency of tax incentives is seemingly impossible. The result is that the public doesn’t know if the costs and benefits are calculated in a way that accurately captures the local economy and its unique needs. Does it estimate the employment benefits, particularly the proportion of new jobs likely to go to local, unemployed residents? What effect would the wage rate have on similar local jobs? Does the analysis look at wage gains across the income distribution and per capita income growth? Can the existing infrastructure accommodate the expected job growth, and can the local government absorb the added costs that come with new residents?

Public access to this methodology should be made available. Absent that, NJPP agrees with the recommendation made by Governor Murphy’s Task Force on EDA Tax Incentives (“the Task Force”) that “the EDA implement a recordkeeping requirement that permits [an auditor] to conduct effective examinations [of the analysis used for approval decisions]. This requirement would promote transparency and accountability in the EDA’s decision-making process and promote the effectiveness and efficiency of any future audits of the EDA.”[i]A paper trail of the net benefit analysis is also in the best interest of taxpayer resources.

19.31-22.4 Restrictions

(a)“The Authority shall not enter into an incentive agreement with a business that has previously received incentives administered by the Authority unless the capital investment incurred and new or retained full-time jobs pledged by the business in the new incentive agreement are separate and apart from any capital investment or jobs underlying the previous award of incentives.”

Given the recent history of bad actors forced to rescind their tax credits,[ii] this exception should be contingent upon a record of good standing with the EDA based on the previous tax incentives awards. In fact, any company whose tax credits were subject to early termination by the EDA for non-compliance should not be eligible for future tax credit award in perpetuity.

19.31-22.5 Application Submission Requirements 

(a)1“Each application to the Authority made by a business shall include the following information in an application format prescribed by the Authority…”

Among the listed business information requirements (1.i-xiv), NJPP recommends the inclusion of the New Jersey lobbying number of the authorized agent hired to assist the business with the application process.[iii]

We understand it is common for companies that apply to the EDA for tax incentives to engage the services of professional consultants to guide companies through the complex process of applying for incentives. However, without safeguards in place, these consultants can manipulate the process for financial gain. As described in the Task Force’s final report, “one consultant fabricated and altered documents before submitting them to the EDA on multiple occasions.”[iv]

The Task Force recommended the EDA hold consultants accountable for improper conduct by requiring they adhere to a code of ethical conduct — similar to how company executives are currently required by the EDA to execute certifications prior to the company’s award of tax credits.

However, given the blatant abuse of the past, this does not go far enough. Any site selection consultant or real estate broker should instead be required to register as a New Jersey lobbyist. Since accepting “success fees” is considered overt incentive for bribery under the law, this requirement removes consultants motivated by commissions out of the process entirely.

19.31-22.7 Review of Completed Application

During the review of an application, the proposed rules as currently written do not allow the public an opportunity to comment on the business applicant and/or the proposed location before the application is reviewed by the Board. To promote additional transparency of the Emerge program and shed light on an applicant’s standing among workers and in the community, the EDA should inform interested parties of pending applications and provide the opportunity to comment in advance of the final Board meeting.

NJPP recommends two ways to keep the public informed and engaged during the application process. The EDA should create and maintain a public web-based application tracker, which is updated on a rolling basis as new applications are submitted for review.  Such a tracker should include the applicant business name, the municipality and county in which the business seeks to relocate or expand, and the date the application was submitted. The tracker should also include application status and advance notification. A public tracker for business tax incentives maintained by Louisiana’s economic development authority is an exemplary model.[v] The EDA should also provide 30 days in advance a public notice of Board meetings at which an application will be reviewed, which would trigger a comment period leading up to the final Board meeting. An example of public notices can be found at NYC Industrial Development Agencies.[vi]

19.31-22.9 Approval Letter and Commitment Agreement

(c)19 A provision requiring a community benefits agreement if the total project cost equals or exceeds $10 million.

Communities are rarely at the table of a statewide economic development strategy. A community benefit agreement (CBA) can address this, but too often the corporation receiving the tax break dictates the terms, downplaying community participation and crucial benefits that would meet their needs. Given the level of fraud that was allowed to prosper under the previous economic development legislation, the EDA must play a stronger role to ensure community voices are heard and that compliance with this type of agreement is enforced.

(d)1 “The business shall enter into a community benefits agreement with the Authority and the chief executive of the municipality or, if requested by the chief executive of the municipality, the chief executive of the county, in which the qualified business facility is located.”

New Jersey Economic Recovery Act states that “[p]rior to entering a community benefits agreement, the governing body of the county or municipality in which the qualified business facility is located shall hold at least one public hearing.” However, in the proposed rule above, the EDA interprets the term “governing body” to mean the chief executive of the municipality or county. NJPP takes issue with this interpretation as it carves out multiple perspectives found on a multi-person governing body and leaves decisions that affect the entire community to a singular mayor or county executive. NJPP recommends the rule be amended to define the governing body to mean a municipality council or board of commissioners to ensure adequate community input.

“At least one” public hearing before the establishment of a CBA has all the characteristics of a token gesture. The process of creating and monitoring a CBA needs to encourage meaningful community engagement and input. In fact, recipients of tax credits should first be put on mandatory probation for year one, and if compliance of a CBA is not established, the EDA should have the authority to rescind and recapture the tax credits.

In distressed municipalities, job training should be a non-optional main component of the CBA given its proven long-term economic impact, even if the subsidized jobs no longer exist. The EDA should also require that the advisory committee accurately reflect the demographics of the community.

Finally, the various components of the CBA should be made publicly available to community residents on the municipality website and the EDA website. These include the final terms of the CBA, the annual reports produced by the community advisory committee, notice of non-compliance and resulting forfeit of tax credits, and certifications that the CBA has been satisfied.

(d)8 “An eligible business shall not be required to enter into a community benefits agreement pursuant to this subsection if the eligible business submits to the Authority a copy of the eligible business’s redevelopment agreement and approval letter that is certified by the chief executive of the municipality in which the project is located.”

A good community benefits agreement ensures that new development serves the needs of local residents and their communities, not just developers. And the role of local elected officials can ensure community voices are heard and that economic development delivers meaningful benefits. However, this exemption allows one local elected official to sign away the CBA agreement without adequate input from community members. NJPP recommends that this exemption be certified by the municipality’s council or the county’s board of commissioners, not the mayor or county executive, in which the project is located.

19.31-22.14 Reduction and Forfeiture of Tax Credits

(f) “The Authority may recapture all or part of a tax credit awarded if an eligible business does not remain in compliance with the requirements of a project agreement for the duration of the commitment period.”

NJPP again strongly recommends that companies subject to the recapture of all or part of a tax credit due to non-compliance be banned from all EDA tax incentive programs in perpetuity.

19.31-22.19 Reports on Implementation of Program

NJPP supports a regular, independent evaluation process to effectively analyze the design, administration, and effectiveness of the Emerge program. The biennial, independently produced report with a detailed analysis of the program’s effect on a business’ relocation decision, the return on investment for the award, the impact on the state’s economy, and other metrics based on national best practices is an important tool of accountability.

NJPP recommends that the implementation reports and EDA responses to those reports be posted publicly on the EDA website to allow public scrutiny of the overall effectiveness of individual programs.

Finally, NJPP recommends the creation and maintenance of a publicly available and exportable database of projects in the Emerge program as they are approved. The most relevant information should include the name of the company, sector, city, county, award amount, eligibility period, commitment period, number of retained jobs, number of new jobs, number of construction jobs, and status of the CBA agreement, if applicable. For an example of such a database, please refer to the Travis County Financial Transparency Portal.[vii]

End Notes

[i] Governor Murphy’s Task Force on EDA Tax Incentives Third and Final Published Report, July 2020. https://www.njleg.state.nj.us/OPI/Reports_to_the_Legislature/eda_task_force_07092020.pdf

[ii] Ibid at 1

[iii] The Wall Street Journal, Meet the Fixers Pitting States Against Each Other to Win Tax Breaks for New Factories, May 2019.

[iv] Ibid at 1

[v] Louisiana Economic Development, Business Incentives, last visited April 16, 2021. https://fastlaneng.louisianaeconomicdevelopment.com/public/search/bi

[vi] NYC Industrial Development Agencies, last accessed April 16, 2021. https://edc.nyc/nycida-board-meetings-public-hearings

[vii] Travis County Economic Development, Travis County Financial Transparency Portal, last accessed April 16, 2021. https://financialtransparency.traviscountytx.gov/StarsEcoDev

The State Budget Must Support Those Harmed Most by the Pandemic

Posted on by Sheila Reynertson

The following testimony on the FY 2022 state budget was delivered to the Assembly Budget Committee on March 10, 2021.

Good morning, Chairwoman Pintor Marin and members of the Budget Committee. My name is Sheila Reynertson and I am here today representing New Jersey Policy Perspective (NJPP) and the For The Many budget coalition.

The most important priority for the FY2022 budget must be supporting those who were disproportionately harmed by both the public health crisis itself and the economic fallout that continues to this day. Black women, Hispanic/Latinx women, essential workers, immigrant workers, low-income households — these are the residents who were immediately at higher risk of contracting the deadly virus, the most likely to lose their jobs, and typically the last to recover from an economic downturn.

It may have been convenient to avoid these glaring disparities before, but the ferocious nature of the pandemic exposed all of it. We cannot turn away from the challenge and opportunities to advance racial and gender equity through the tax code and through sustainable programs that are proven building blocks of a strong state economy.

The FY2022 budget as proposed by Governor Murphy goes a long way to address the uneven impact of this past year in several commendable ways that will make an immediate difference in the lives of children, students, struggling families and seniors. Again, we strongly agree with this approach. Invest in the people and the economy will recover. Invest in the most vulnerable people and the economy will grow stronger than ever.

We support the health care investments focused on low-income families like subsidies for health insurance, a full year of Medicaid coverage after childbirth, funding for reproductive health care services for those without a path toward health insurance, and securing health insurance for every last child in the state.

We support the EITC expansion proposal to include 70,000 low-income, senior workers without kids and making the Child and Dependent Child Care Tax Credit fully refundable so those who need it the most can access it. We also support the state’s role in keeping families together with the increase in funding for legal representation for immigrants facing detention or deportation.

However, it is unfathomable that financial assistance for immigrants has been excluded from pandemic relief. A solution must be found to protect these vulnerable households from becoming impoverished. New Jersey can’t simply turn a blind eye to one its greatest assets: our immigrant communities. The EITC should also be increased and expanded to include immigrants as ITIN filers, low-income workers without children, and to those between the ages of 18 and 21.

Of course, we support the full pension payment a year ahead of schedule, a bigger allocation into the school funding formula and the expansion of pre-K education to another 1,800 children in 25 districts. The $100 million in new funding for higher education is exactly the type of building blocks of a state economy that we have long advocated for.

But to ensure adequate funding for years to come we remind the Assembly budget members to keep an eye on the not-too-distant future. Once the borrowed dollars have been spent and the federal aid is gone, New Jersey can’t expect economic growth alone to make up the difference. And certainly not with corporations looking to cash in their tax subsidies.

The topic may be getting a pass this year, but new sustainable revenue must be on the table before so we can both fund these increased investments well into the future and pay off the billions of dollars that the state just borrowed. New Jersey has a decision to make and we can’t afford making the wrong one: We can either turn a blind eye to the looming shortfalls in future budgets that will put millions of residents at risk of falling further behind or we can recommit to creating a modernized and equitable tax code to ensure a strong state recovery for everyone, especially those hit hardest by the events of the past year. Thank you.

Reforming WorkFirst NJ Will Help Reduce Child Poverty

Posted on by Brittany Holom-Trundy

The following testimony, on S2956, was delivered to the Senate Health, Human Services, and Senior Citizens Committee on January 14, 2021.

Good afternoon Chairman Vitale and members of the Committee. Thank you for this opportunity to provide my testimony on the proposed Work First New Jersey (WFNJ) reforms. My name is Dr. Brittany Holom-Trundy, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

Though these reforms are not the full set of improvements that we would like to see, NJPP strongly supports the changes proposed in S2956 as a response to the Governor’s conditional veto on last year’s legislation. These reforms include needed changes to work requirements for parents, increases in child support pass-throughs to better help families, elimination of graduation requirements for 18-year-olds, and positive language changes. We believe this is a good first step toward a WFNJ that more effectively tackles childhood poverty, helps support low-income families, and builds a stronger future for the state.

As my predecessor Ray Castro’s work has shown, WFNJ provides a key channel of support for parents and children living in poverty. This is particularly true for Black and Latinx families, who are overrepresented amongst low-income families. Year-over-year changes reported throughout the pandemic have continued to emphasize how essential this lifeline is, especially for single-parent families. As people have lost employment, income stability, and family members in record numbers, these safety nets couldn’t be more important.

We hope that the committee will advance these reforms. We also encourage all legislators to consider further improvements, including increases in cash assistance and expanded eligibility for immigrant families in desperate need of support. Now more than ever New Jersey’s parents and children need solid commitments from our state leaders to their well-being and a brighter future.

Thank you for your time.

Legislators Should Vote No on $11.5 Billion Corporate Tax Subsidy Program

Posted on by Sheila Reynertson

The following testimony, on A4, was delivered to the Assembly Appropriations Committee on December 18, 2020.

Good morning, Chairman Burzichelli and members of the Assembly Appropriations Committee. My name is Sheila Reynertson and I am a senior policy analyst at New Jersey Policy Perspective. Thank you for the opportunity to testify on A4.

First, we applaud the important improvements in this legislation regarding oversight and accountability: a robust Community Benefit Agreement requirement, scaled down tax credit cap on each newly created job, tighter reporting requirements, and newly appointed compliance officer and an Inspector General to protect public dollars.

But the scale of this proposal is simply too large. Up until 2010, New Jersey averaged less than $100 million per year on programs authorized by the Economic Development Authority. Only during the Christie administration did the size of the programs balloon to over $1 billion year after year. This proposal takes what should be viewed as unnecessarily exorbitant and attempts to give it a sense of credibility it doesn’t deserve.

Comparable states like Maryland and Massachusetts spend an average of $100.4 million and $193.5 million a year, respectively, on economic development subsidies annually. The idea that New Jersey must have a program of this scale — over $1.5 billion per year — is irresponsible and threatens the state’s short- and long-term fiscal health.

Let’s step back a moment. The original proposal from 2019 topped off at $3 billion. As of last week, negotiations for this bill more than doubled to $7 billion total. And now, here we are looking down the barrel of a $11.5 billion proposal.

What happened? The two biggest programs — the same ones that were out of control under the Christie administration — have ballooned from a combined $300 million limit per year to $1.1 billion a year. At the same time, the minimum job and affordable housing requirements have both been watered down. How does that serve New Jersey taxpayers?

And the spending caps on these fabled “mega-projects” that may or may not transpire have ballooned as well. Originally, up to three redevelopment deals in the transformative program could each receive up to $100 million in tax credits. Now, 10 such large projects could be approved, and each could receive up to $250 million in tax credits each. The annual cap for the other mega-project concept — the institution-anchored redevelopment program — doubled from $100 million to $200 million.

Meanwhile, as we witness the biggest crisis to hit small businesses in our lifetime, this legislation throws them a bone with a loan program that may or may not allocate $50 million per year.

Two years. This legislature had two years of expert testimony from the state Comptroller and national experts at organizations like Pew Charitable Trusts and the Conference of State Legislatures who described the downsides of massive subsidies and limited upside. Best practices and sound research were tossed aside to “get this done before the year ends.” And nobody had the courage to say, “We’ve gone too far.”

Just yesterday, Forbes published an article on the utility of corporate tax subsidies. The jury decision is final, according to economists of all political stripes.

“Conservative scholars at George Mason University’s Mercatus Center find ‘sub­sidies have little to no effect on where companies choose to invest.’  And progressive economists Alan Peters and Peter Fisher conclude that subsidies work at best 10 percent of the time, ‘and are simply a waste of money the other 90 percent.’”

Ultimately, this bill represents a doubling down on the failed strategy of the 2013 Economic Opportunity Act and will weaken our ability as a state to afford our existing obligations and emerging needs — especially as we recover from the COVID pandemic and recession. The proposal is not sufficiently targeted to the areas of New Jersey’s economy that will need the greatest support and will weaken our ability to bolster proven economic drivers and pay down our oversized obligations.

A vote in favor of this legislation says you have confidence that the state will have enough resources in 10 years to simultaneously pay down the recently borrowed $4.5 billion and dole out tax subsidies by the billions. It’s the height of irresponsible stewardship of the public’s money.

We are not implying that the state completely forgoes tax subsidies — we are stating unequivocally that a program of this size is irresponsible and needs to be scaled back, specifically in the job growth and redevelopment programs.

We respectfully request legislators to vote NO on A4 and allow for time to rightsize this tool of economic development so it can fit back into the toolbox.

I am happy to answer any questions you may have. Thank you.

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