Category: Testimony

Gov. Murphy’s EDA Reforms Are Necessary to Correct Flaws in EDA Programs

Posted on by Brandon McKoy
Governor Murphy announcing a corporate subsidy reform package in Cherry Hill on June 5, 2019.

Earlier today, Governor Phil Murphy unveiled a package of reforms to New Jersey’s corporate tax incentive programs. The proposals follow months of independent reports and task force hearings highlighting fraud and waste at the state Economic Development Authority. In response to the proposed reforms, New Jersey Policy Perspective releases the following statement.

BRANDON McKOY, NEW JERSEY POLICY PERSPECTIVE PRESIDENT:

“The tax subsidy reforms proposed by Governor Murphy are necessary to correct the serious flaws in New Jersey’s economic development programs. Since the passage of the Economic Opportunity Act in 2013, New Jersey has been a national outlier in how it operates its tax incentive programs, with the state spending five times the national average on corporate subsidies. With the programs guiding the Economic Development Authority set to expire at the end of the month, there has never been a more opportune time for meaningful reform.

“This package of reforms is forward thinking and, more importantly, follows best practices from across the nation. Hard caps on awards and stronger oversight will protect taxpayers and the state’s budget, while better targeting of awards and improved labor protections will ensure the benefits of corporate subsidies are shared broadly among business owners, their workers, and local communities alike.

“We look forward to working with Governor Murphy and members of the Legislature in the pursuit of economic development policies that are fiscally responsible and prioritize the best interests of everyday New Jerseyans.”

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic justice and prosperity for all New Jerseyans through evidence-based, independent research, analysis and advocacy. NJPP has long-advocated for reforming New Jersey’s corporate subsidy programs.

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Pension and Benefit Cuts Are Bad Public Policy and Even Worse Optics

Posted on by Brandon McKoy

Earlier today Senate President Steve Sweeney unveiled a package of 27 bills from his Path to Progress working group. In response to proposals to reduce working class pensions and health benefits, NJPP President Brandon McKoy released the following statement.

NEW JERSEY POLICY PERSPECTIVE PRESIDENT BRANDON McKOY

“Trickle down economic policies got New Jersey into its current fiscal mess and more of the same will not lift the state out of it. It is bad public policy — and even worse optics — to ask more than 350,000 working families to make further sacrifices while protecting 17,000 millionaires from a modest tax increase. In this era of historic inequality and wage stagnation, the choice before lawmakers is clear. They can continue to balance budgets on the backs of middle class families or ensure the wealthiest among us pay their fair share.”

“Lawmakers must not forget history. Under the Christie administration, the state cut taxes time and time again for the wealthiest individuals and largest corporations. As a result, middle class families now pay a higher share of their income in state and local taxes than millionaires do.

“Last year, lawmakers challenged Governor Murphy to find significant savings before they would consider a millionaires tax, and he did just that. It’s time for lawmakers to fulfill their promise and ask the wealthiest among us to pay a little bit more.”

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Treasurer’s Testimony Highlights Need for Sustainable Revenue

Posted on by Sheila Reynertson

Earlier today the Office of Legislative Services and State Treasurer Muoio testified at the Senate Budget Committee hearing and delivered updated revenue collection figures for FY 2019. In response to today’s testimony, NJPP releases the following statement.

NEW JERSEY POLICY PERSPECTIVE SENIOR POLICY ANALYST SHEILA REYNERTSON

“Today’s budget testimony delivered good news that revenue collections are above projections for the remainder of the fiscal year. But just as the non-partisan Office of Legislative Services warned, this is good news that should be taken with caution. This year’s budget relies on over $1 billion in one-shot revenue sources that are set to disappear. Lawmakers must pursue reliable and sustainable sources of revenue, like the proposed millionaires tax, to make up for these lost funds and continue investing in assets proven to grow the economy. A millionaires tax would also promote tax fairness, as the current tax code results in middle class families paying a higher share of their income in state and local taxes than the state’s top earners.

“The $317 million deposit into New Jersey’s rainy day fund — the first in eleven years — is a noteworthy accomplishment and a good budgeting practice that will reflect well in credit agency evaluations. However, more can and must be done to help prepare the state for the next recession or natural disaster. The state must build on last year’s successes and commit to new, renewable sources of revenue, robust surpluses, and continued deposits into the rainy day fund.”

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Lobbyists Drafting EOA is Privatization of the Legislative Process

Posted on by Brandon McKoy

Earlier today New Jersey Policy Perspective (NJPP) President Brandon McKoy testified at the Economic Incentive Task Force hearing on the NJ Economic Development Authority and crafting of the Economic Opportunity Act of 2013. In response to the hearing and yesterday’s exposés by WNYC and the New York Times, NJPP releases the following statement:

NEW JERSEY POLICY PERSPECTIVE PRESIDENT BRANDON McKOY

“The fraud and abuse at the Economic Development Authority extend far beyond lax oversight and personnel — they are a direct result of the legislation guiding the state’s tax subsidy programs. Quietly drafted by corporate lobbyists who had a financial interest in the bill, the Economic Opportunity Act of 2013 is riddled with narrowly tailored loopholes ripe for exploitation. There is no question that this law was written to benefit already wealthy and well-connected individuals and corporations, not ordinary New Jerseyans. This represents a privatization of the legislative process and corporate cronyism at its worst. New Jersey taxpayers deserve better.

“Nothing about the laws guiding New Jersey’s economic subsidy programs is normal. New Jersey is an outlier in how much it spends on incentives and how little it gets back in return. Taxpayers cannot afford for the Economic Development Authority to continue doing business as usual. New Jersey must follow best practices utilized by other states and reform its subsidy programs so they are targeted, properly monitored, and capped. These common-sense reforms will ensure the EDA promotes developments that benefit all New Jerseyans, not just a select few.”

Watch Brandon McKoy’s testimony to the Tax Incentive Task Force here:

https://youtu.be/U-GG3tP7chA?t=22410

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EDA Task Force Exposed Culture of Corruption

Posted on by Sheila Reynertson

In response to today’s task force hearing on New Jersey’s economic subsidy programs, NJPP releases the following statement calling for a moratorium on Christie-era subsidies and meaningful reforms to prevent future abuse: 

SHEILA REYNERTSON, SENIOR POLICY ANALYST, NJPP: 
“New Jersey Policy Perspective commends Gulsen Kama for shining a light on the fraudulent tactics that have flourished under New Jersey’s tax subsidy programs. Kama’s testimony exposed a culture of corruption that has robbed the state of critical taxpayer dollars. This first hand account detailed just how easy it is to cheat the system and lie on applications for tax credits. Today’s hearing should give lawmakers pause about the integrity of existing corporate subsidy programs. The need for reform has never been more pertinent.
“The hearing also exposed the cottage industry of relocation firms and consultants that help corporations cheat on their EDA applications. In her testimony, Ms. Kama described how a consulting firm produced a detailed, yet bogus portfolio of out-of-state relocation options even though her employer was finalizing plans to move to a new office in Jersey City. This calls into question the value of offering tax subsidies for job retention and further highlights the need for a moratorium on tax credits given out under the Christie administration.”
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EDA Whistleblower Suit Describes Corruption, Plain and Simple

Posted on by Brandon McKoy

In response to a report by WNYC suggesting the Christie administration pressured officials at the New Jersey Economic Development Authority (EDA) to give out fraudulent awards, NJPP releases the following statement calling for a moratorium on EDA awards and a full investigation by the Attorney General:  

BRANDON McKOY, PRESIDENT, NJPP:

“These allegations describe corruption, plain and simple, and taxpayers should be furious. For years, NJPP and advocates for good governance have questioned the overly generous tax subsidies awarded by the Economic Development Authority, but the allegations in this whistleblower lawsuit extend far beyond lax oversight and into fraudulent, and possibly criminal, conduct.

“New Jersey taxpayers deserve to know that decisions are made with their best interests in mind, not what’s best for a few select corporations. We call for a full moratorium on EDA subsidies awarded under the Christie administration and a full investigation of these claims by the New Jersey Attorney General.

“Further, as lawmakers consider renewing the state’s tax subsidy programs, they must pursue broad reforms that have been proposed by NJPP and Governor Murphy, including hard caps on annual and per-job awards, tighter reporting requirements, and targeting awards to emerging industries and home grown businesses.

“Only a full and complete investigation, combined with robust reforms that follow best practices, will enable the state to regain the trust of the public.”

NJPP has long-advocated for reforming the EDA. A full list of possible reforms is included in this 2017 report: It’s Time for New Jersey to Rebalance the Economic-Development Scales

New Jersey Budget Should Include Millionaires Tax

Posted on by Sheila Reynertson

This testimony on the FY2020 New Jersey budget was delivered to the Assembly Budget Committee on Monday, March 20, 2019.

Good morning, Chairwoman Pintor Marin and members of the committee. Thank you for this opportunity to speak before you today. My name is Sheila Reynertson and I am a senior policy analyst at New Jersey Policy Perspective.

A decade after the Great Recession, New Jersey continues to struggle to bounce back. Revenue streams have chronically fallen short of spending needs leading to gimmicky fixes and funding raids. The Rainy Day Fund has been empty since 2009, a risky situation should New Jersey be slammed by another recession. Massive tax cuts for the wealthy and corporations have harmed the lives of everyday families and small businesses in many important ways, including higher college tuition costs and more expensive NJ Transit commutes.  

We approach the 2020 budget with two clear objectives in mind. First, raise sufficient revenue to meet the state’s necessary obligations, invest in the critical public assets that make New Jersey an attractive place to live and do business, and provide support for the most vulnerable members of our communities. Second, bring responsible budgeting practices back in vogue.

The centerpiece of Governor Murphy’s budget calls for applying the highest tax rate of 10.75 percent to annual earnings over $1 million, raising much needed new, sustainable revenue. We support this proposal and legislative leaders who have repeatedly passed it in the past should have no problem doing so today.

New, sustainable sources of revenue like the millionaire’s tax allows property tax relief programs to keep up with the cost of living, offering meaningful support to seniors and those living on a fixed income. That in turn frees up resources to help New Jersey’s neediest families by increasing the Work First NJ grant for basic assistance again this year. Renewable sources of revenue help lawmakers wean themselves off risky budgetary practices — like using the state surplus as a slush fund — that have contributed to 11 credit downgrades. It frees up resources for universal representation to help keep New Jersey families together in this age of extreme xenophobia. It helps fund the Earned Income Tax Credit increase, one of the most effective anti-poverty tools and recently found to be even more cost effective than originally thought. And, of course, sustainable revenue allows New Jersey to continue making critically important investments in state assets that all families rely upon every day like NJ Transit and institutions of higher education.

Concern that voters oppose taxing millionaires should be calmed by a diverse array of state-level polls consistently demonstrating strong support for a true millionaire’s tax among likely voters.

Any worry that wealthy taxpayers will flee New Jersey should be dismissed by peer-reviewed research findings, the vast majority of which show that raising the state income tax has a negligible effect on relocation decisions. The number of New Jersey taxpayers with incomes over $500,000 has consistently grown even as income tax rates on wealthy households have been increased twice. The share of these taxpayers grew an astonishing 450 percent, between 1994 and 2016, the most recent year for which data is publicly available. Millionaire tax flight is a myth, and that fact doesn’t go away when lawmakers hear anecdotal stories from estate planners.

What should worry representatives is that the top 1 percent of earners in the Garden State, who earn an average $1,582,000 a year, make 24.3 times more than what the bottom 99 percent makes. This level of inequality ranks New Jersey as 9th worst in the nation.

These high earners take home one fifth of all income made in the state. This is not far off from the state’s historical high, which peaked just before the Great Depression during the last Gilded Age. Yet today’s wealthy households in New Jersey pay a smaller share of their income in state and local taxes – 9.8 percent – than those in the middle 20 percent who, on average, earn $66,000 a year – 10.1 percent.

The millionaire’s tax, coupled with a strong commitment to phasing out gimmicky revenue raisers, ending raids of dedicated funds, and replenishing New Jersey’s surplus is the definition of a disciplined approach to this year’s budget. We also encourage the legislature to further this work by enacting consensus budget forecasting as a first step toward creating a comprehensive roadmap for sound long-term budget planning. Long-term planning that includes multi-year revenue and spending projections and more transparency might raise questions and issues that one-year budgeting intentionally avoids and, optimistically, break the cycle of accounting games and gimmicks that have dug New Jersey into this deep financial hole.

I’d like to close my testimony by addressing one last concern that some committee members may have. There is an assumption that a millionaire’s tax will somehow be unfair because New Jersey’s highest earners are already paying more in federal taxes with the loss of SALT deductions. However, nothing could be further from the truth. According to modeling conducted by the Institute on Taxation and Economic Policy, the top 1 percent of New Jersey taxpayers would still receive a sizable tax cut – from $2,500 to $3,200 – even with the SALT cap and Governor  Murphy’s proposed millionaire’s tax because other changes in the federal tax law are so disproportionately generous to wealthy households, like the corporate tax cut and the higher estate tax threshold.

Thank you for your time and attention.

Exorbitant EDA Subsidies Ignore Fiscal Realities

Posted on by Sheila Reynertson

This testimony on the New Jersey Economic Development Authority subsidy programs was delivered to the Senate Economic Growth and Assembly Commerce and Economic Development Committees on Monday, February 11, 2019.

My name is Sheila Reynertson and I am a senior policy analyst at New Jersey Policy Perspective (NJPP), a nonpartisan research organization focused on state budget, tax and economic issues. Since NJPP’s inception in 1997, we have consistently raised concerns about the overreliance on business tax subsidies and have repeatedly called for stricter oversight of this economic development strategy.

As the latest iteration of corporate tax subsidy programs winds down and in light of the comptroller’s audit of the Economic Development Authority (EDA), NJPP’s position remains the same.

Based on our long-term analysis of both corporate tax subsidies and the precarious status of the state budget, the ends simply don’t justify the means. New Jersey was already in the midst of a financial crisis when the volume of awarded tax breaks was allowed to skyrocket. Once spending caps were lifted in 2013 under the Economic Opportunity Act, the EDA approved close to $6 billion in corporate tax breaks. Last year, McKinsey & Co. report stated that New Jersey’s tax subsidy programs pay more than five times as much as peer states for every dollar it attracts and every job created or retained.

That’s the kind of short-sighted game New Jersey simply can’t afford to play; especially not at the level it has, providing overly generous and exorbitant subsidies that are significantly out of step with what we see across the country and by comparable states.

Further, putting that kind of stock in tax subsidies to spur economic growth blatantly ignores the state’s precarious financial reality. In official documents submitted by the EDA during budget committee hearings in recent years, the authority projects that this over reliance on tax subsidies may result in a loss of over $1 billion a year in revenue starting in 2020 – at precisely the same time that the state’s biggest obligations are set to cripple the state budget.

None of this was hard to predict as anyone involved in these issues understood that New Jersey would be facing these tough situations relatively soon. And yet, the choice was made to gamble away future taxpayer dollars without getting a sufficient return on the investment. This has only made it more difficult to fund vital public services and invest in our state’s most important assets.

Some changes made in 2013 were positive – like more stringent standards for subsidies given to corporations shifting jobs around the state. But on the whole, the Economic Opportunity Act greatly expanded the size and scope of these offerings while eliminating several key financial protections for taxpayers and the State of New Jersey. Since then, the EDA took some measures as a partial course correction. Now, it’s the responsibility of the executive office and the legislature to implement real reform and get these tax breaks under control again.

Here are the most important ways to bring back accountability and oversight to business tax subsidy programs on behalf of New Jersey’s taxpayers.

First, restore spending caps on the total amount New Jersey can give in subsidies per year to ensure accountability and increase the legislature’s oversight role. Strict spending caps both ensure that New Jersey has a handle on its ability to track and assess awarded projects and that the overall program is again in line with comparable states. The caps put forth by the governor’s proposal is a great starting point, though we would argue they could and should be even lower.

New Jersey must get serious about reporting requirements. This should be done in a number of ways including a legislative fix to allow the Treasury to finally release the Unified Economic Development Budget which would provide annual data on large awarded subsidies – like the number and quality of jobs created. Design and implement a robust, independent evaluation process to determine on an ongoing basis if these tax breaks are having the desired effect. Require the EDA to post a more regular and longer-term analysis, say 15-year-forecasts, of the budget impact of already-approved subsidies. Lawmakers should also eliminate tax subsidies to retain existing jobs or at the very least limit such subsides for a large number of jobs that are supposedly at risk of moving to another state as proposed by the governor.

Finally, New Jersey must restrict corporations’ ability to sell their tax credits. The very idea of a secondary market for tax credits should give the legislature pause. New Jersey’s tax subsidy program is so overly generous that it enables the sellers to receive far more money in subsidies than they actually owe in taxes. New Jersey may regard these tax breaks as an effective way to entice large employers to relocate, but for those corporations – it’s just icing on the cake. Allowing them to not only sell their tax credits but to exempt that transaction from taxation is especially egregious. That’s like taking the time to research and find the perfect wedding present for a friend only to discover they sold it at a yard sale the following year. It’s time to end this practice.

There is no shortcut or silver bullet to improving our economy. It takes a long, sustained approach of targeted investments to produce balanced growth that spreads opportunity to all corners of the state. Tax subsidies can be a tool in this strategy, but for far too long New Jersey made them the strategy while critical assets suffered from disinvestment.

The state must reverse course now by adopting strong and sufficient reforms for its subsidy programs, adopting a long view on job creation and investing in the kinds of opportunities that have been proven over and over again to grow and sustain economies: high-quality K-12 education, higher education that is accessible to all, public-private partnerships centered on research institutions, as well as clean, safe communities and affordable, efficient transportation systems. These are the things that will continue to make New Jersey a magnet for research and enterprise and an attractive place to locate a business.

Thank you for your time and consideration. I’m happy to answer any questions you may have.

 

It’s Time for a $15 Minimum Wage

Posted on by Brandon McKoy

This testimony, on A15, was delivered to the Assembly Labor Committee on Thursday, January 24, 2019.

Good morning Mr. Chairman and members of the committee. Thank you for the opportunity to speak here today. My name is Brandon McKoy and I am the Director of Government and Public Affairs at New Jersey Policy Perspective.

NJPP has long been a strong supporter of raising the minimum wage to $15. The economic benefits for workers, their families, the business community and our state’s economy at large are significant and desperately needed. This proposal — bill A15 — will help approximately one million workers, almost one quarter of the state’s entire workforce, to better afford their needs and take care of the families.

Furthermore, these workers will now be able to more fully participate in our economy, meaning that the businesses of this state will benefit from a sizable increase in their customer base. When people can actually purchase their needs instead of putting them off due to poverty-level wages, businesses experience significant increases in revenue, helping grow and strengthen our economy.

It is no secret that New Jersey has been one of the slowest states to emerge from the Great Recession. When nearly a quarter of your workforce is earning poverty-level wages, it isn’t difficult to see why this is the case. This bill will help rectify this problem. It isn’t a silver bullet, and it won’t end poverty on its own, but it is a critical piece of the puzzle to tackling income inequality in this state.

That’s not to say there aren’t some shortfalls in this piece of legislation. The scenario for farm workers is far from certain as they may or may not see their wages rise to $15 by 2027. And the situation for tipped workers is not ideal either. While this bill increases their wages to $5.13 by 2022, it also increases the gap between the tipped wage and the general minimum wage by about 50 percent. New Jersey already has one of the largest gaps between the tipped and general minimum wage. To make it larger is not sound policy and invites increased instances of wage theft and workplace harassment for employees, especially women. As such, we also support bill A2903 which improves the state’s anti-wage theft laws in important ways, and we will continue to report on and advocate for improvements in these areas.

Poverty and income inequality tangibly harm millions of New Jerseyans. These two phenomena limit the freedom and liberty of our residents, weaken and destabilize our economy, and arrest our ability to deal with the many problems that we face as a state. Many people who testify today will try to convince you that this bill artificially inflates the minimum wage. They will say it goes too far too fast, and they will use terms like “wage mandates” to convince you that such a proposal is an encroachment on the freedoms of employers to determine what is best for them.

The fact of the matter is that had the federal minimum wage kept up with worker productivity over the past half century, it would be well above $20 by now – if anything, the minimum wage has been artificially deflated for decades. And when we look around and see so much poverty and struggle, and when we read analyses such as the ALICE report from the United Way of Northern New Jersey which shows us that 4 in 10 Garden State households are effectively working poor, we ought not be surprised at what we find.

This bill will be one of the most important, beneficial, and consequential pieces of legislation in this state’s history. It will help one million workers, make New Jersey a real competitor for workers in our region again, and inject nearly $4 billion into our economy – much of which will be spent in our local communities, helping to boost the fortunes of businesses on main street from Avondale to Waretown. This will be one of the best bills you could ever support in your career as a legislator.

As such, we urge you to support A15 and pass it through committee. Thank you for your time and consideration.

State of the State 2019: Rapid Reaction

Posted on by Louis DiPaolo

Welcome to NJPP’s State of the State 2019: Rapid Reaction, your source for commentary and data analysis on Governor Murphy’s address. The transcript below was taken from a conversation in NJPP’s conference room and has been lightly edited.

Lou (Louis Di Paolo, Communications Director): In his first State of the State address, Governor Phil Murphy highlighted major initiatives signed into law over the last year and doubled down on his vision for a “stronger and fairer” New Jersey. From implementing paid sick days for over a million workers to providing equal access to financial aid for undocumented students, the governor outlined major policy victories in what he called a “productive year” with the Legislature.

He also spent a big portion of his speech on New Jersey’s economic subsidy programs. He opened by saying he was delivering a totally different speech from the one he planned on giving after reading the State Comptroller’s audit of the EDA. Did either of you expect the EDA audit to dominate the beginning of the governor’s speech?

Sheila (Sheila Reynertson, Senior Policy Analyst): No, but the timing was perfect. He took full advantage of the EDA audit to call out the state’s out of control tax subsidy programs.  This line stood out to me:

I see no lies here. New Jersey’s tax incentive programs operated without stringent oversight and left NJ taxpayers on the hook for $11 billion at a time they are constantly being told that there is not enough revenue to invest in higher education, mass transit and clean energy. I love that he put taxpayers front and center and called for putting caps on the amount of money the EDA gives out every year.

Brandon (Brandon McKoy, Director of Government Affairs): I definitely wasn’t expecting him to start out so strong on this issue out of the gate, but I’m glad he did. Getting right on subsidies is central to improving the state’s fiscal health, and it’s definitely something that the ratings agencies would like to see. For too many years New Jersey has been really irresponsible with these programs, and like Sheila says, voters are tired of hearing that we have tons of money available for already-wealthy and well-connected corporations but not enough to improve our schools or make major investments in NJ Transit. So thumbs up from me on the Gov talking about this issue so much today, it’s really important and he made that abundantly clear.

Lou: Fortunately, the state’s subsidy programs sunset at the end of the current fiscal year. Given the governor’s remarks, what do you think the future holds for the EDA? And what reforms have to happen to prevent another $11 billion from going out the door without proper oversight?

Sheila: Spending caps! This alone will be a great victory for accountability and oversight. I appreciated that the Governor’s remark about how there is a place for tax incentives to encourage businesses to invest in New Jersey, but in no way should they be the only strategy. I would have loved for him to connect more dots between the over-reliance on the tax incentives and the deep disinvestments to the proven tools that can help build a stronger economy: education, infrastructure and workforce development. Regardless, the reforms he highlighted are exactly the kind of fixes needed to rein in the program.

Brandon: I have nothing to add here. She covered it.

via GIPHY

Lou: That’s why Sheila makes the big bucks. But let’s focus on those who aren’t. This is the first time I can remember a sitting governor mention poverty in their State of the State address. What are your thoughts, Brandon? And where do we go from here?

Brandon: Looks like someone read my twitter feed! Yeah, after the speech ended I just thought for a moment about how many times the governor actually *said* the word “poverty” and was kind of taken aback by it, but in a good way.

It might sound silly, but I can’t tell you how many economic outlook presentation or fiscal analysis meetings I’ve been in where poverty isn’t mentioned even once. Considering how central poverty is to our economic fortunes and opportunities, it really is a huge oversight. So it was honestly refreshing to see the governor not only mention poverty as a challenge, but highlight it as something he wants to aggressively tackle and mitigate. There’s a lot of people who suffer from poverty in New Jersey — a lot more than most realize — so having the top elected official of the state understand that is a great thing to see.

Sheila: I agree! He also lifted up those who work full time or who work at multiple jobs just to make ends meet in New Jersey. “The working poor of New Jersey are no longer invisible. We see them.” That’s a game changer in a state that ignored TANF recipients for 31 years, in a state in need of a more realistic path toward a $15 minimum wage.

Lou: I’m not sure if you two caught this, but the Governor’s line on passing a $15 minimum wage bill received the biggest applause. I’m not sure if that’s because everyone in the room was clapping (I doubt that) or the advocates sitting in the gallery were making a lot of noise. Either way, there were reports that the Governor and legislative leaders were close to a deal on the minimum wage last month, but things have simmered since. NJPP has said many times that raising the minimum wage will boost the take home pay of over one million workers, but that assumes everyone is included. How bad are the carve outs proposed in Speaker Coughlin’s bill? And do you think the governor’s address got him any closer to a clean bill, without exemptions?

Brandon: I honestly don’t know if the remarks in this speech have helped improve the odds of a clean bill, but the fortunes of a clean bill really shouldn’t rely on the governor’s remarks in his State of the State, especially considering the legislature passed a clean bill on its own just a few years back. The carve outs in the Speaker’s bill are bad enough that most advocates, when they saw it, dismissed the proposal out of hand. The general wage gets to $15 by 2024, which is okay, but the carve outs are too broad and too slow. The bill carves out youth workers, seasonal workers, farm workers and small business workers at firms with 10 employees or less — and it doesn’t bring them to $15 until 2029, which is 10 years from now. That’s just way too long. It creates a permanent subclass of workers, doubling down on some of worst mistakes in US labor history, and fails to take the goal of tackling poverty seriously.

There’s also the problem of what it does for tipped workers. It increases the tipped wage from $2.13 to $5.13, but the gap between the tipped wage grows from $6.72 to $9.87. One of the things we’ve urged lawmakers to do is, at the very least, not increase the gap between the tipped wage and minimum wage. It creates all sorts of problems, invites greater instances of wage theft, and exacerbates income inequality. So the tipped wage piece of this bill is something we’re really going to have to improve. And, again, this could all be avoided if the legislature just introduced and passed the same clean bill that it did in 2016, the one that Governor Christie vetoed. Governor Murphy has said he would sign that bill, so it is really frustrating to see such good legislation get watered down so drastically. It’s really hurting our workers, businesses and the broader economy.

Sheila: What Brandon said. But wasn’t the biggest applause line the restored funding from Planned Parenthood and New Jersey having the nation’s strongest equal-pay law, Lou? Hooray for treating women like people!! Lol.

Lou: Treating women like people — what a radical concept! But let’s pivot to what wasn’t included in the speech. Rapid response: were you surprised by any policy areas that weren’t included in the governor’s remarks?

Brandon: Didn’t hear a *whole* lot about reforms to the tax code or implementation of progressive tax policies like a true millionaire’s tax or the estate tax, but I guess those things are mostly saved for the budget address so it’s ultimately not too surprising.

Sheila: Codifying Roe v Wade and removing remaining barriers to contraception and abortion for uninsured and underinsured in the Trump/Kavanaugh era, expanding health care coverage for children regardless of immigration status, innovative ways to help low- to middle-income families with child care costs. Real talk about New Jersey’s empty rainy day fund putting the state in a precarious position should we be hit by another recession or superstorm.  

Brandon: Sheila is better at rapid response than I am. Didn’t hear much about working family tax credits either.

Lou: I’ll answer my own question. I was a little surprised we didn’t hear anything about a public bank. But we all knew that would be a heavy lift. But to wrap this up, I have two closing questions. 1) What policies are you most excited for in 2019? And 2) I had fun with this, so can we do another rapid reaction blog post for the budget address?

Brandon: I’m excited for getting some really good policies implemented, especially minimum wage. There’s a lot of energy out there right now for strong, progressive policies and I think a lot of New Jerseyans want and expect to see their elected officials working towards these goals on their behalf. I hope 2019 will be a good year for getting some things in place that we’ve been working on for a long time.

And progressive taxes. Definitely progressive taxes. Bring back the estate tax, reform the inheritance tax, restore the sales tax to 7 percent, and put in a *real* millionaire’s tax!

Lou: That’s an ambitious tax agenda. But a true millionaires tax is really, really popular among likely voters, so who knows? 

Either way, my fingers are crossed. Sheila?

Sheila: Getting paid family leave reforms across the finish line will be a huge moment. The program is underused by workers and many of the fixes will hopefully make an impact. And yes(!!!) to progressive taxation — it’s time to course correct previous mistakes and create a tax code that reflects reality. Take a true millionaire’s tax — it is long overdue in a state where the top earners have made the most income gains since the end of the last recession. Finally, I would love to see New Jersey take the lead on expanding health care regardless of immigration status. I could keep going….but it’s time to clock out.

Brandon: The next time we do this I expect to see more gifs.

Sheila: And Gritty memes.

Lou: Good point, Sheila. I bet more people will read this if we can tease that there’s a Gritty meme buried in here. BOOM!

via GIPHY

 

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