Economic Justice Archives - Page 3 of 25 - New Jersey Policy Perspective

Senior Tax Credit Proposal Falls Short of Helping Seniors With the Lowest Incomes

Posted on May 26, 2023May 26, 2023 by Peter Chen

On Friday, new details of Assembly Speaker Craig Coughlin’s senior tax credit program were released to the public. The proposal would create a new program, StayNJ, that would provide a tax credit worth 50 percent of a senior’s property tax bill, with credits capped at $10,000. Because the proposal would provide maximum benefits to those with property tax bills of $20,000 and up, and does not include an income limit on eligibility, the program would disproportionately benefit the wealthiest seniors in the state who own the highest-valued homes. In response to the newly released bill text, New Jersey Policy Perspective (NJPP) released the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“Lawmakers should be doing everything they can to help seniors keep up with rising costs, but this proposal would fall short by directing the biggest tax cuts to the wealthiest households while many low-income seniors would get nothing. With no income cap on eligibility, higher tax credits for more expensive homes, and no assistance for renters, it’s clear who this program would benefit and who it would leave behind. The program also comes at an enormous cost to the state, just as revenue collections are coming in lower than expected, putting funding for existing public programs and services that seniors rely on at risk.

“Making New Jersey more affordable for seniors is a noble goal, but we’re not going to get there by giving the likes of Bruce Springsteen and Phil Murphy a $10,000 check. There are more effective and efficient ways to target relief to the seniors who are struggling the most with high housing costs, grocery bills, and prescription drug prices.”

The StayNJ proposal would benefit wealthy homeowners the most, leave renters behind, and widen the racial wealth gap:

Homeowners with property tax bills in excess of $20,000 would receive the maximum StayNJ credit while lower-income residents would receive less due to their smaller homes and lower property tax bills.
Only thirteen municipalities in New Jersey — including Alpine, Millburn, Rumson, and Princeton — have an average property tax bill that would qualify for the full StayNJ credit. These towns have average property values of over $1 million and are home to celebrities, professional athletes, and business and finance executives.
One in four seniors aged 65 and over — roughly 230,000 New Jersey residents — rent their homes and would be left out of the proposal, including more than half of Black and Hispanic/Latinx seniors in the state.
Homeowners over age 65 in New Jersey are disproportionately white. More than 80 percent of white seniors are homeowners, compared to 41 percent of Hispanic/Latinx seniors and 49 percent of Black seniors.

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Rutgers Faculty Deserve to be Respected and Fairly Compensated

Posted on April 10, 2023 by Nicole Rodriguez

Earlier today, more than 9,000 Rutgers University faculty and graduate student workers went on strike across the university’s three campuses. Rutgers faculty have been without a contract for 284 days. In response to the strike, New Jersey Policy Perspective (NJPP) released the following statement.

Nicole Rodriguez, President, NJPP:

“We stand in solidarity with the Rutgers grads and faculty on strike across the state. These workers are the backbone of the university and have dedicated their lives to educating and inspiring the next generation of leaders. They deserve to be recognized, respected, and fairly compensated for their contributions to the university and the state. In New Jersey, there is no place for a higher education model that underpays faculty, reduces tenured positions, and does not guarantee job security.”

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Assemblywoman Reynolds-Jackson Introduces Child Tax Credit Expansion Bill

Posted on February 21, 2023February 21, 2023 by NJPP Staff

Today, Assemblywoman Verlina Reynolds-Jackson (D-Trenton) introduced legislation to expand and improve the New Jersey Child Tax Credit (CTC) to further reduce child poverty and support working families facing rising costs.

The proposal, A-5214, would increase the tax credit over two years for children under 6 years old — doubling the maximum credit from $500 to $1,000 — and expand eligibility for the program to include children age 6 through 11. The expansions would build on a policy with a proven track record of success at both the federal and state levels in directly assisting families.

“Our children are our future, and we must do everything we can to support them,” said Assemblywoman Verlina Reynolds-Jackson (D-Trenton), sponsor of the Child Tax Credit expansion bill. “The Child Tax Credit recognizes the high costs of raising kids, especially now as families face rising prices for groceries, housing, clothing, and other basic needs. This bill would provide much-needed relief for families by expanding the Child Tax Credit with larger benefits and so more children qualify. When families have the resources they need, it sets their kids up for success now and later in life.”

The expansion is similar to one proposed in a recent report by New Jersey Policy Perspective (NJPP), which found that an estimated 441,000 families across New Jersey would benefit from the expanded tax credit, including 713,000 children in households receiving the tax credit.

“Expanding the Child Tax Credit is a smart investment in the state’s future,” said Louis Di Paolo, Communications Director at New Jersey Policy Perspective (NJPP). “This proposal helps kids, targets relief to families who need it most, and will have both immediate and long-term benefits for the families who receive it and the broader economy. Policies like this are how we make New Jersey affordable for families struggling to keep up with rising costs.”

The expanded tax credit would be available to New Jersey families with annual incomes up to $80,000. After two years, the tax credit would break down as follows:

Households with an income of $30,000 or less will receive a tax credit of $1,000 for each child under 6, and $600 for each child age 6 through 11.
Households with an income of $30,000 to $40,000 will receive a tax credit of $800 for each child under 6, and $500 for each child age 6 through 11.
Households with an income of $40,000 to $50,000 will receive a tax credit of $600 for each child under 6, and $400 for each child age 6 through 11.
Households with an income of $50,000 to $60,000 will receive a tax credit of $500 for each child under 6, and $300 for each child age 6 through 11.
Households with an income of $60,000 to $80,000 will receive a tax credit of $300 for each child under 6, and $200 for each child age 6 through 11.

The original New Jersey CTC, also sponsored by Asw. Reynolds-Jackson, passed in June 2022 by a 31-6 vote in the Senate and 72-2 vote in the Assembly. Families with children under six years old started receiving their CTC payments earlier this year at the start of tax season.

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How an Expanded Child Tax Credit Would Help More Hard-Working New Jersey Families

Posted on January 31, 2023January 31, 2023 by Peter Chen

In 2022, New Jersey became the seventh state to enact a refundable state-level Child Tax Credit to help families meet the high costs of raising kids.^[i] Under the new program, eligible families will receive up to $500 for every child under six years old as early as January 2023.^[ii]

The success of the Child Tax Credit lies in its simplicity: It directs cash relief to families with kids who need it most. It is a straightforward, commonsense program with long-lasting benefits. When families can pay for basic expenses — like groceries, housing, and child care — and save for their children’s futures, it improves child wellbeing immediately and makes it more likely for children to reach their full potential later in life.

Recognizing the power of direct cash relief for families, the Legislature passed the Child Tax Credit with substantial bipartisan support in both houses.^[iii] Indeed it was Republican lawmaker Aura Dunn who urged her colleagues on the Assembly floor to “go bold” and expand the tax credit when it was first created, saying that more children and families should qualify as bigger kids come with bigger costs.^[iv]

To build on the success of the Child Tax Credit, state lawmakers can and should expand the program with a higher maximum credit and so more families qualify for financial support. This report lays out the logical next steps for the Child Tax Credit and would make New Jersey a more affordable place to start and raise a family.

NJPP proposes a two-fold expansion to the existing law: expanding the Child Tax Credit to $1,000 for young kids under six years old, and opening eligibility to children ages 6-11.

This expansion targets two important limitations of the original credit:

Its higher dollar amount reflects the needs of New Jersey families and the higher costs that they face with rising inflation.
It recognizes that children have costs that do not end when they turn six and assists families whose children have aged out of the original credit.

The expanded credit would help 441,000 more families, including 713,000 children, across the state. On average, families receiving the credit would get $567.^[v]

A History of Expanding Tax Credits Proven to Work

New Jersey created its Child Tax Credit just last session. Why expand it again so soon?

There’s certainly precedent. State lawmakers expanded New Jersey’s Earned Income Tax Credit (EITC) for working families in three straight years after it was created in 2000.^[vi] In recent years, lawmakers have continued expanding the credit, reaching 40 percent of the federal credit amount in 2020.^[vii]

Like the Earned Income Tax Credit, an expanded Child Tax Credit has a strong track record at the federal level for reducing child poverty and increasing household budgets for food, housing, and basic expenses.^[viii] These programs also have a “multiplier effect” as the tax credits are often spent immediately and locally, stimulating the broader economy.^[ix] But with the federal Child Tax Credit back to its pre-pandemic levels, families in New Jersey will see their benefits decline at a time when high costs cut deeply into working-class family budgets and financial security.^[x]

In short, the Child Tax Credit is a highly effective anti-poverty and pro-family policy that should be expanded similar to other working families tax credits.

Measuring the Benefits of an Expanded Child Tax Credit

NJPP’s proposed expansion to the existing Child Tax Credit has two key components: a higher age limit so children up to 11 years old can be claimed, and a higher credit amount to better support families.

Increased Age Range

The age limit would be lifted from children under age 6 to children under age 12. Children do not stop having costs as time goes on.^[xi] Expanding the age range will also cover a wider range of families and boost the credit amount for already-eligible families who also have children in the older age range.

Increased Credit Amount

The proposed credit would continue to honor the much-needed public investment in young children by providing a credit up to $1,000 for the current age range of children under age 6. A higher benefit for young children recognizes that young children are more likely to live in poverty than their older counterparts.^[xii] For children ages 6-11, the maximum credit amount would be $500.

This expansion would reach roughly 441,000 families and provide benefits for 713,000 additional children. On average, a family receiving the credit would get $567, helping defray the daily costs of raising children.

These changes would provide meaningful relief to families who are experiencing the effects of high post-pandemic inflation, especially working-class and middle-class families, who reap the lion’s share of the benefits.

These higher dollar amounts also push the credit towards more poverty reduction. Recent estimates by the Institute on Tax and Economic Policy show that to achieve a 25% reduction in child poverty, maximum credit amounts would have to be upwards of $2,000, but a $1,000 maximum credit pushes the state in the right direction.^[xiii]

Making New Jersey the Best Place to Raise a Family

The New Jersey Child Tax Credit is an effective, popular, and bipartisan program that gives working families the cash relief they need to make child-rearing more affordable. New Jersey should build on its successful program to expand the eligible age range and increase the benefit amount, especially for young children.

As Assemblywoman Dunn argued on the Assembly floor, it’s time for New Jersey lawmakers to go big and go bold when it comes to making the state the best place in the country to raise a family.

End Notes

^[i] California, New York, Massachusetts, Colorado, New Mexico, and Vermont also have refundable state child tax credits. Other states have non-refundable or temporary credits. See Sophie Collier et al., State Child Tax Credits and Child Poverty: A 50-State Analysis (2022) at p. 9, https://itep.sfo2.digitaloceanspaces.com/Report-State-Child-Tax-Credits-and-Child-Poverty-A-50-State-Analysis-2022.pdf.

^[ii] P.L. 2022, c. 115.

^[iii] The final votes were 76-2 in the Assembly and 31-6 in the Senate. See New Jersey Legislature, Bill S2523 Sca (1R), Session 2022-2023, https://www.njleg.state.nj.us/bill-search/2022/S2523.

^[iv] New Jersey Assembly GOP, Democrats reject Dunn’s “big and bold” child tax credit (June 30, 2022), https://www.youtube.com/watch?v=DtfMHBanHoM at 1:40.

^[v] Analysis of New Jersey taxpayer data by Institute on Taxation and Economic Policy, on file with author.

^[vi] New Jersey Division of Taxation, New in 2001 (2002), https://www.nj.gov/treasury/taxation/pdf/new2001.pdf at p. 1.

^[vii] N.J. Stat. § 54A:4-7(2). The credit amount started at 10% in 2000, increasing to 15% in 2001, 18% in 2002, and 20% in 2003.

^[viii] See Bradley L. Hardy, Center on Budget and Policy Priorities, Child Tax Credit Has a Critical Role in Helping Families Maintain Economic Stability (April 14, 2022). https://www.cbpp.org/research/federal-tax/child-tax-credit-has-a-critical-role-in-helping-families-maintain-economic

^[ix] Natalie Holmes and Alan Berube, Brookings Institute, The Earned Income Tax Credit and Community Economic Benefits (November 20, 2015).

The Earned Income Tax Credit and Community Economic Stability

^[x] See Chuck Marr et al., Center on Budget and Policy Priorities, Year-End Tax Policy Priority: Expand the Child Tax Credit for the 19 Million Children Who Receive Less Than the Full Credit (December 7, 2022), https://www.cbpp.org/research/federal-tax/year-end-tax-policy-priority-expand-the-child-tax-credit-for-the-19-million; Joshua Klick & Anya Stockburger, Bureau of Labor Statistics, Inflation Experiences for Lower and Higher Income Households (December 2022), https://www.bls.gov/spotlight/2022/inflation-experiences-for-lower-and-higher-income-households/home.htm.

^[xi] See Mark Lino et al., U.S. Dep’t of Agriculture, Expenditures on Children by Families, 2015 (March 2017), https://fns-prod.azureedge.us/sites/default/files/resource-files/crc2015-march2017.pdf at 24, tbl. 1.

^[xii] See Areeba Haider, The Basic Facts about Children in Poverty, January 12, 2021 at fig. 4, https://www.americanprogress.org/issues/poverty/reports/2021/01/12/494506/basic-facts-children-poverty/

^[xiii] Institute on Taxation and Economic Policy, Columbia Center on Poverty and Social Policy, Child Tax Credit Options for Reducing Child Poverty: New Jersey (2022), https://itep.sfo2.digitaloceanspaces.com/Child-Tax-Credit-Options-New-Jersey-2022.pdf at p. 3

Unions, Advocates, and Policy Experts Urge Lawmakers to Say No to Corporate Tax Cuts

Posted on January 23, 2023 by NJPP Staff

On Friday, members of For The Many NJ sent an open letter to Governor Murphy, Senate President Scutari, Assembly Speaker Coughlin, and members of the Senate and Assembly Budget Committees calling for the extension of the Corporate Business Tax surcharge.

“This is exactly the wrong time to be giving the most profitable corporations a $600 million tax cut. Such a gift for corporations and their shareholders takes away resources from our schools and infrastructure and undermines funding for areas that promote opportunity for all,” the letter states.

The Corporate Business Tax surcharge is a 2.5 percent tax on corporate profits exceeding $1 million. The surcharge is paid by the top 2 percent of the wealthiest corporations operating in the state, including multi-state corporations like Amazon and Walmart that make profits in New Jersey but are not headquartered here. The tax cut is estimated to cost the state at least $600 million annually.

“The wealthiest 2 percent of businesses should be paying more, not getting a tax cut when everyday New Jerseyans are struggling,” the letter continues. “We keep hearing about kitchen-table issues and middle-class New Jerseyans. How will corporate tax cuts help them?”

The letter was signed by 28 organizations and labor unions, including: New Jersey Policy Perspective, New Jersey Institute for Social Justice, ACLU of New Jersey, Latino Action Network, 32BJ SEIU, CWA, and the New Jersey Education Association.

The letter calls for lawmakers to extend the Corporate Business Tax surcharge so the state can continue investing in the programs that make New Jersey an engine of economic growth and opportunity.

A copy of the letter can be read here.

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For The Many is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically marginalized.

Social Equity Excise Fee Revenue Distribution Must Center Racial Justice

Posted on November 16, 2022January 26, 2023 by Marleina Ubel

Good evening, Chairwoman Houenou, Vice-Chairman Delgado, and Commissioners of the Cannabis Regulatory Commission. Thank you for this opportunity to share my testimony.

My name is Marleina Ubel and I am a policy analyst at New Jersey Policy Perspective (NJPP), a nonpartisan think tank focused on advancing economic, social, and racial justice for New Jersey residents.

I want to start by thanking you for your recommendations from last year. It is clear that you heard the call to make sure that the money from the Social Equity Excise Fee be distributed back not just into municipalities, but into communities harmed by the War on Drugs and not spent on law enforcement.

The language surrounding the use of this revenue is vague, allowing the state to exercise tremendous discretion in how it’s spent. Therefore, there must be clear parameters on what is acceptable and what is not, along with the expectation that a participatory budgeting process must be followed. This is of utmost importance because the communities and the individuals who have been directly impacted by the drug war must have meaningful input on how the money is used.

Meaningful input also requires transparency. The public should have access to how much revenue is raised and where that revenue is going. This should not be a slush fund, nor should it be spent on coercive treatment, school resource officers, or otherwise invested in punitive measures connected to the criminal legal system, which is the very entity that caused the most harm enforcing cannabis prohibition.

As you outlined in your prior recommendations, revenue from the Social Equity Excise Fee should go directly toward promoting stronger, safer, and more resilient communities, as well as services that recognize substance use as a matter of public health. Examples of such investments include: recreation and community programming, harm reduction services, neighborhood restoration, after-school programming, and vouchers or direct payments for individual needs, such as utilities, rent, or medical costs.

New Jersey has an obligation to equitably invest this revenue, meaning they must center racial justice and reparations for people harmed by the War on Drugs. Anything less would fail the very communities and residents that the Social Equity Excise Fee is intended to support.

Thank you.

Biden Student Debt Proposal Will Help New Jersey Families But Needs to Go Farther for Maximum Relief

Posted on August 24, 2022August 26, 2022 by Nicole Rodriguez

Today, President Biden announced that borrowers earning up to $125,000 in income will be eligible for student loan debt relief of up to $10,000, or up to $20,000 for Pell Grant recipients. For a state with over 1.3 million student loan borrowers with an average balance of $37,000, this will be life-changing debt relief. New Jersey ranks 6th in the nation in the percentage of undergraduate students receiving Pell Grants – almost 39 percent of undergraduates. In response to today’s announcement, New Jersey Policy Perspective (NJPP) releases the following statement.

Nicole Rodriguez, President, NJPP:

“The President’s plan to forgive student loan debt will provide hundreds of thousands of New Jerseyans relief, allowing them to invest in their futures and families while bolstering the state’s economy. Canceling student loan debt is a critical step to building wealth and economic prosperity in New Jersey while narrowing the racial wealth gap. Higher education is held up as a ladder of opportunity to success, but the explosive growth in student debt holds back borrowers from achieving their full potential.

“While this plan will provide transformative relief to some borrowers, it does not go far enough. Capping income levels will not only leave many borrowers behind but require an entire apparatus of applications and red tape when the federal government could have canceled this debt with the push of a button. And the $10,000 does not come close to covering the average balance of nearly $40,000 for the average New Jersey borrower. Beyond the debt relief itself, more must be done to ensure adequate public funding for higher education: No student should have to take on crushing debt to pursue higher education.”

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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 advocacy.

Common Sense Changes to the Tax Code Will Narrow Wealth Inequities

Posted on August 18, 2022September 27, 2022 by Sheila Reynertson

New Jersey Policy Perspective (NJPP) is committed to closing the racial wealth gap through statewide policies that build and share wealth equitably. As a nonpartisan think tank that drives policy change to advance economic, social, and racial justice, NJPP has identified key policies that will begin to repair the harms of centuries of discrimination and exploitation.

1. Fair and Just Taxation

The most effective tool in equalizing wealth disparities is taxation aimed at the very wealthiest individuals and corporations. Fair and just taxation of existing wealth serves two critical goals: It ensures that people who have extracted the most value from the state’s economic system pay what they owe, and it ensures that the government has the resources it needs to support programs that advance wealth-building and human capital.

NJPP recommends three immediate commonsense changes to the tax code that will narrow wealth disparities:

Extend the Corporate Business Tax (CBT) surcharge on profits over $1 million. Corporate earnings over $1 million in New Jersey have been subject to a surtax since 2018. Because it only applies to very wealthy corporations, the surtax ensures that a portion of record-breaking profits benefits everyone. Scheduled to expire at the end of 2023, the surtax should instead be made permanent, turning huge corporate profits into publicly shared support and services.
Reform the inheritance tax to make it progressive. Lightly-tax and tax-free transfers of wealth at death widen the racial wealth gap. For example, in 2019, 30 percent of white households received an average inheritance of about $200,000, while only 10 percent of Black households received one which, on average, was half the amount. Worse, New Jersey’s mostly flat tax on inheritances over a certain amount leads to these smaller inheritances being taxed at roughly the same rate as multimillion dollar transfers. To reduce the transfer of concentrated wealth, NJPP proposes expanding the tax to direct heirs and, to make it more progressive, lifting the exemption for smaller inheritances up to $1 million.
Close corporate loopholes to treat all businesses fairly. New Jersey’s combined-reporting law has a big loophole that allows wealthy multistate corporations to transfer their profits out of New Jersey to other states or countries with low or no corporate taxes. Fixing this and other remaining flaws will stop corporations with deep pockets, like Amazon and Walmart, from taking advantage of tax avoidance schemes that reduce what they owe and rob the state of resources needed to strengthen everyone’s ability to build wealth.

These tax policies are only the start. NJPP has other progressive proposals that end preferential tax breaks and target wealth held by the most affluent members of society, like the restoration of the estate tax and strengthening how New Jersey taxes capital gains income, among others.

At its root, taxation is the single most powerful tool to equalize wealth disparities. No doubt these hearings will include many proposals for outstanding and innovative programs: baby bonds, home buying assistance, guaranteed income. But to fund these programs at the level needed to meaningfully close the state’s substantial wealth disparities, New Jersey will need to simultaneously pursue fair taxation of the state’s wealthiest individuals and corporations.

2. Affordable for All: Putting Money in Families’ Pockets

A perpetual obstacle to wealth-building among low- and middle-income households are the day-in, day-out expenses and surprise costs, such as medical emergencies or a car repair. Accumulating wealth is nearly impossible for families who must dip into savings or take additional debt simply to make ends meet.

NJPP supports any policy that puts cash back in the pockets of low- and middle-income households to help ease the pain of these expenses and begin to build savings:

Expand the Child Tax Credit. New Jersey has created its first state-level Child Tax Credit, but at $500 per child under age 6 for households earning less than $30,000 annually, this does not come close to meeting the high cost of child-rearing. Raising the credit from $500 to at least $1,000 would defray these costs, as would expanding the credit to families with children age 6 and older.
Expand the Earned Income Tax Credit (EITC). The EITC is a powerful anti-poverty tool, but many New Jerseyans who pay into the tax system don’t get the benefit of the EITC because they lack a Social Security number. Including ITIN-holders would advance equity among all New Jersey families living paycheck to paycheck.
Reform WorkFirst NJ. New Jersey’s assistance program for very low-income residents is in immediate need of reform to keep households stable and move them out of poverty. Increasing the benefit amount and ending policies that trap households in a cycle of poverty will change lives, especially the lives of children.

Cash in families’ pockets acts as an income support first and foremost. But absent sufficient financial resources to make ends meet, no household can effectively begin building wealth in the first place.

3. Innovative Wealth-Building Programs

Existing asset-building programs have thus far failed to build the base of wealth necessary to begin closing the wealth gap. Indeed, many programs and tax structures have instead widened the gap, by providing disproportionate benefits to the already-wealthy.

NJPP proposes these creative solutions to explicitly build wealth in households that have been left behind for far too long:

Pay reparations for tangible harms of slavery and racial discrimination. Direct payments to Black communities harmed by the American slave trade, as well as discriminatory practices such as redlining, segregation and employment discrimination, would directly close the racial wealth gap. NJPP supports legislation to create a task force on reparations to Black residents.
Fund robust baby bonds programs. Connecticut and Washington, DC have passed baby bonds legislation, which funds savings accounts for all births covered by their Medicaid programs. These accounts receive additional contributions from the state before the bonds and children reach maturity. Such a program would help close the wealth gap for children and young adults by giving families an opportunity to build assets without dipping into savings or going into debt.

NJPP supports a broad array of proposals to reduce wealth inequality in New Jersey, but real change comes down to appropriately taxing the obscene accumulation of wealth by the top one percent of individuals and corporations, while building assets and reducing deprivation for working-class families.

Thank you.

Reevaluation of Fines and Fees in the Criminal Legal System is Essential to Reducing Wealth Inequality

Posted on August 18, 2022 by Marleina Ubel

Good evening. Thank you for the opportunity to testify. My name is Marleina Ubel and I am a policy analyst at New Jersey Policy Perspective (NJPP), a nonpartisan think tank focused on advancing economic, racial, and social justice for New Jersey residents.

The criminal justice system creates and exacerbates racial wealth gaps. Mass incarceration and its disparate application to Black and Hispanic/Latinx communities has reduced their earnings potential, employment opportunities, and wealth accumulation. However, my focus today will be on monetary fines and fees, which can turn minor offenses into massive and long-lasting disparities, especially for people already in dire economic circumstances.

A brief overview of the terminology: fines and fees, or monetary sanctions, are costs imposed by the courts. Fines are meant to serve as a punishment, such as a ticket for jaywalking, while fees are meant to pay for the day-to-day operations of the criminal justice system. Often, when one is charged with a fine, they also are charged with a fee. However, for a person with outstanding fines or fees, the effect is the same — an amount owed that they likely cannot pay, which can balloon into substantial economic hardship down the road. A recent study showed that Black and Hispanic/Latinx defendants spent more time in the court system before disposition and owed more fines and fees 90 days after disposition than white defendants with similar charges.^[i]

Let me illustrate how broken the system of fines and fees is with a fairly commonplace criminal justice system interaction: When a person is accused of a crime but can’t afford their own attorney, they are entitled to representation by a public defender. But in New Jersey, this is not free — despite the defendant having to demonstrate financial indigence to qualify for the service. State law requires that the public defender’s office bill defendants a minimum of $150.^[ii] Within six months of disposition of the case, the defendant must pay the bill or be in debt to the State of New Jersey.^[iii]

This applies to municipal public defenders for municipal offenses, meaning that even low-level municipal offenses can result in liens placed on low-income defendants, yet another drag on ability to build wealth, even if the charges are dismissed or other fines and fees are successfully paid.^[iv]

And, while these costs do not appear enormous, roughly one-third of American adults cannot cover a $400 expense without going into debt or selling assets.^[v]

Although steps have been taken by the Legislature, judiciary, and the Attorney General to reduce the impact of these fines and fees on individuals, the reality is that even cursory interaction with criminal courts can result in charges that hamper wealth accumulation. Getting a lawyer, obtaining court documents pertaining to one’s own case, and applying for expungement of one’s record all come with costs that low-income individuals are unlikely to afford.

NJPP recommends eliminating all public defender fees and funding residents’ constitutional right to an attorney through sustainable public funding. Neighboring states like New York and Pennsylvania do not charge for legal representation and neither should we.^[vi]

However, beyond these fees, NJPP recommends a wholesale reevaluation of fines and fees across the criminal legal system, in line with recent legislation that heavily reduces or eliminates juvenile-justice-related fees.^[vii] The vicious cycle of fines and fees, inability to pay, and subsequent increased interaction with police and courts — leading to lost work time, drained savings, and of course, additional fines and fees — must be broken to reduce wealth inequality in New Jersey.

End Notes

^[i] Lindsay Bing et al., Incomparable Punishments: How Economic Inequality Contributes to the Disparate Impact of Legal Fines and Fees, RSF: The Russell Sage Foundation Journal of the Social Sciences January 2022, 8 (2) 118-136. https://www.rsfjournal.org/content/8/2/118

^[ii] N.J. Admin. Code Sec. 17:39-3.1

^[iii] N.J. Stat. Sec. 2A:158A-17

^[iv] N.J. Stat. Sec. 2B:24-13

^[v] See Board of Governors of the Federal Reserve System, Economic Well-Being of U.S. Households in 2021 (May 2022), p. 35-36.

^[vi] Marea Beeman et al., National Legal Aid and Defender Association, At What Cost? Findings from an Examination into the Imposition of Public Defense System Fees (July 2022), tbl. 2 at p. 15, https://www.nlada.org/sites/default/files/NLADA_At_What_Cost.pdf?v=2.0

^[vii] P.L. 2021, c.342.

It’s Time for New Jersey to Fix WorkFirst NJ to Better Support Low-Income Families

Posted on August 8, 2022August 8, 2022 by Brittany Holom-Trundy

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.

NJPP strongly supports the changes proposed in S1642. We believe that the comprehensive reforms proposed in this bill are a good step toward a WFNJ that more effectively tackles childhood poverty, helps support low-income families, and builds a stronger, more equitable future for the state.

New Jerseyans need these changes now, as the program’s structure falls short of effectively addressing poverty. As of February 2022, fewer than 10,000 — only 9,976 — families were participating in TANF. This means that TANF is supporting fewer than one in six New Jersey families in poverty. And this number has only fallen over the past two and a half decades since the last major reform at the federal level.

WFNJ falls short not only in the number of residents it serves, but in how it serves them. Administrative barriers arbitrarily limit assistance, and even those who receive that assistance do not get enough to make ends meet. Monthly cash benefits in the program remain at less than ⅓ of the Federal Poverty Level, meaning that cash assistance now has only a quarter of the strength relative to federal poverty levels than the cash assistance that was provided in the 1970s. Benefit cliffs and inadequate off-ramps for the program leave families hanging, facing the reality that working full time in a minimum wage job in New Jersey today will still leave a parent with two children below the federal poverty level…And this does not even take into account that the federal poverty level is tens of thousands of dollars below estimates of what it takes to pay monthly food, utility, housing, and other necessary bills in New Jersey. All of these problematic limitations of the program leave families with an inability to save, to prepare for unexpected expenses, and to ultimately break free from the cycle of poverty.

This bill advances comprehensive reforms to address many of these shortcomings. By increasing the monthly grant (benefit) amount to at least 50% FPL with automatic cost of living adjustments, improving off-ramps, modifying work requirements to better meet realities for working parents, and making other important changes to rules that bring the program into the 21st century, we can make the WFNJ program truly work for New Jerseyans.

We hope that the committee will advance these reforms today. Now more than ever New Jersey’s parents and children need commitments from our state leaders to support their well-being and a brighter future.

Thank you for your time.

Topic Category: Economic Justice