file photo by Boyd Loving
November 29,2017
the staff of the Ridgewood blog
Ridgewood NJ, according to the Bergen Record ,Democratic Gov.-elect Phil Murphy said Tuesday that he is “confident” his proposal to increase taxes on New Jersey’s millionaires will go through, even as Democratic leaders in the Legislature have cooled on the idea in light of GOP tax plans being considered in Congress.
Murphy and his Democratic allies say that the bill would increase taxes on income over $1 million from a top rate of 8.97 percent to 10.75 percent. The Fantasy is that the new tax could generate up to $600 million for the state, which Murphy claims the state will use to increase funding for New Jersey’s public schools.
The are going to need it ,again according to the Bergen Record there will be $1.2 billion less revenue available next fiscal year than the current year. Specifically: $700 million in one-time revenues are in the current budget . The two largest being $300 million in legal settlements principally related to environmental claims and $321 million for sale of public broadcasting assets. And, the continued phase out of the estate tax, a decrease in the sales tax rate and exclusions/deductions in the income tax will result in $520 million less revenue from these sources.
The remaining tax base will yield $1 billion at best and that ‘s not sufficient to cover the lost revenue and address normal program growth. How to address this “squeeze” will be a challenge.
The current year or 2018 looks equally disturbing, the current budget has only a $409 million surplus that’s barely 1 percent of spending. There is no money in the Rainy Day Fund.
An none of this is taking into account greater outmigration according to Jordan Amin, a tax partner at EisnerAmper, “I think where some of these provisions that are affecting New Jersey harder than some other states — like the repeal of the state and local tax deductions — the incoming governor wants to increase the highest income tax rate in the state, currently 9 percent, to 10.75 percent, and I think that that may meet some opposition, now that some of the state taxes are not going to be deductible at the federal level. And we have all read about people supposedly fleeing New Jersey for other low-tax or no-tax jurisdictions, such as Florida. I think that there is some concern (the tax) … could cause a greater migration outward.”
