The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
“It takes a certain kind of stupidity to find yourself ranked dead last” Reader
New Jersey’s high property and income taxes contribute to its standing as the nation’s least attractive tax climate for businesses, according to a Washington tax policy group’s annual ranking of the 50 states. Samantha Marcus, NJ.com Read more
what are Sweeney, Sarlo and Prieto trying to do to our gasoline taxes? What’s going to happen to our property taxes? State income tax increases on the top 1%, i.e. anyone who earns over $350,000? Higher sales taxes anyone? How about all of the above. And for what you ask? To feed the vampire squid sucking the lifeblood out of the state of NJ. All of the tax revenues raised will go to pay for past promises on wages & benefits for unionized labor, not to invest in the future of the state. These thugs in Trenton won’t ask any questions, they’ll just throw more hard earned money down the black hole of pension and healthcare corruption.
file photo by Boyd Loving
The Stakes For a Lame Duck Gas Tax Vote Following Assembly Victories
After Tuesday’s wins in the Assembly elections, Democrats will be entering Lame Duck with the weight of the proposed gas tax on their shoulders and a strategic choice to make: to help fund the Transportation Trust Fund, or wait for the newly elected Assembly members to arrive and for Christie to return to Trenton from the campaign trail. JT Aregood, PolitickerNJ Read more
TAX CREDITS: TOO HIGH A PRICE TO ATTRACT COMPANIES, KEEP THEM IN NEW JERSEY?
OCTOBER 26, 2015
JOHN REITMEYER
Companies and critics explore the pros and cons — and costs — of incentives used to convince corporations not to move out of state
When Panasonic was seeking a new location for its corporate headquarters after four decades in Secaucus, moving to downtown Newark was not the original plan, according to chief executive officer Joe Taylor.
Offices in San Diego, Chicago, and Atlanta were all under consideration, but after intense lobbying from politicians here — and the enticement of an $80 million state economic-development tax incentive — Taylor decided to keep the company and its 1,000 employees in New Jersey, choosing to relocate in downtown Newark.
Now, Taylor said 60 percent of the company’s employees are taking the train to work, meaning their cars are off New Jersey’s already choked and potholed highways. Panasonic also has an agreement with city government to give local residents a first crack at job openings.
“I’m a huge proponent of economic development,” Taylor said while participating in a panel discussion during NJ Spotlight on Cities, a daylong conference held earlier this month at the New Jersey Performing Arts Center in Newark that focused on the state of New Jersey’s cities.
“I think tax credits are critically important,” he said. “I think other kinds of credits are critically important.”
New Jersey Placed 8th Highest in the Country
October 22, 2015
By Jared Walczak
While corporate income taxes are often mistaken for the totality of business tax burdens, in reality they are just one of many taxes paid by businesses, and often a relatively small percentage of overall corporate tax burdens. Nationwide, corporate income taxes only account for 3.5 percent of state and local tax revenue. That figure will continue to decline as more businesses organize as pass-throughs (S corps, partnerships, sole proprietorships, etc.), which are liable under the individual income tax code, and as more C corporations receive incentives and abatements which erode the corporate income tax base.
Today’s map shows how much each state collects in corporate income taxes per capita. Unsurprisingly, states like New York ($539 per capita) collect a great deal, due to a heavy concentration of corporate payers. Alaska has the highest collections per capita ($912), the result of a large presence from extractive industries combined with relatively low population. A similar dynamic is at play in fourth-ranked North Dakota, while third-ranked New Hampshire leans more heavily on corporate taxes (and property taxes) due to the lack of an individual income tax (except on interest and dividends) or a sales tax.
At the other end of the spectrum, Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming do not levy corporate income taxes, though four of these states (Nevada, Ohio, Texas, and Washington) instead impose economically distortive gross receipts taxes, and some states that forego a traditional corporate income tax still show a small amount of corporate income tax due to taxes on the corporate net income of special kinds of corporations (e.g., financial institutions). As such, only Nevada, Texas, and Wyoming show no revenue whatsoever from corporate income taxes, though all three of these states levy other business taxes, including, inter alia, Nevada’s Commerce Tax (a gross receipts tax) and Modified Business Tax (a payroll tax) and Texas’s Margin Tax (a gross receipts tax).
There are several reasons why the corporate income tax share is so low on average:
The number of businesses organized as traditional C corporations has decreased over time. Between 1980 and 2010, the number of pass-through businesses nearly tripled, while the number of C corps actually declined.
States hand out generous corporate tax incentive packages to entice businesses to move into (or remain in) their states. Jobs credits, investment credits, and other targeted incentives lower tax liability for certain businesses and industries, but they are distortionary and non-neutral, picking winners and losers while carving away at the tax base.
States further reduce corporate tax bills by adjusting income apportionment formulas, reducing the in-state taxable income of corporations within their borders. Our Location Matters study helps explain the effect of apportionment in each state.
Beyond their limited capacity to raise revenue in most states, corporate income taxes are also highly volatile, as many corporations post losses during economic downturns and thus have no liability under the corporate income tax.
How much does your state collect in corporate income taxes per capita?
OCTOBER 23, 2015, 7:23 PM LAST UPDATED: FRIDAY, OCTOBER 23, 2015, 11:07 PM
BY DUSTIN RACIOPPI
STATE HOUSE BUREAU |
THE RECORD
Now that the Senate has voted to override Christie’s veto of that Madden bill on mental health records, sending it to the Assembly for consideration, the details of both proposals are at the center of a dispute between Democrats and Republicans over what is sound policy and what is political theatrics. The arguments show how powerful Christie’s pen stroke can be in Trenton, turning a bipartisan agreement into a pitched debate over mental illness and guns — plus all the other pressing matters facing the state.
Republicans in the Assembly now face the same choice as their colleagues in the Senate: Either switch their votes or defy Christie and hand him the first complete override of his tenure. Republican leader Jon Bramnick, a prime sponsor of the Assembly version of Madden’s bill, said his party expects Democrats to work toward solving New Jersey’s most vexing challenges first.
“If you’re willing to post and get passed in both houses serious tax reform and serious policy changes, I’m happy to talk about overriding the governor,” Bramnick said. “But my sense is that if you just want to override the governor for political purposes, I’m not with you.”
Sharing information
The bill at the heart of the dispute was sponsored by Bramnick, of Union County, and Madden, D-Gloucester, and was requested by the Administrative Office of the Courts. It would provide for local law enforcement to be notified when someone with a history of mental illness — like being committed to an institution or determined by the state to be a danger — applies to have a mental health record expunged for the purpose of obtaining a firearm.
While nothing stops judges from contacting law enforcement to get more details about an applicant that may weigh on their decision, the bill would automatically notify authorities to give them an opportunity to share information with the courts such as pending charges or “aberrant” behavior of the individuals.
The bill unanimously passed the Legislature in June. But Christie, who is running for the Republican nomination for president, conditionally vetoed the legislation in August because, he said, it didn’t comprehensively address mental health reform. Instead, he urged the Legislature to act on his recommendations found in the bill sponsored by Thompson, R-Middlesex.
Hybrid proposal
Christie’s reforms included a new standard for involuntary commitment for someone with mental illness; new training programs for first responders to identify and deal with people “in crisis”; and a requirement that someone who has been involuntarily committed for mental health treatment demonstrate “adequate medical evidence of suitability” in order to get a firearms purchaser card. None of his recommendations dealt with expunging mental health records.
By Mark Lagerkvist / October 19, 2015
With an election for New Jersey Assembly two weeks away, the numbers don’t look good for the fiscal reform urgently needed in Trenton.
The staggering $194 billion liability for public employee pension and health benefits is seldom debated in campaigns for the 80 Assembly seats up for grabs on Nov. 3.
The status quo is a 47-32 advantage for Democrats over Republicans with one seat vacant – a balance not likely to change much. The incumbents have outspent challengers $10 million to $2.2 million, according to a report by a New Jersey election commission.
Even more lopsided, incumbents enjoyed a 10-to-1 cash-on-hand advantage – $5.2 million to $496,000 – over their opponents, as of Oct. 2.
That big edge in campaign finances helps them run for re-election while running away from their failure to solve New Jersey’s fiscal dilemma. The Assembly has been in recess since June – a spell approaching four months.
“The situation is not only getting worse, but is fast approaching a point at which it will be beyond remedy,” warned Gov. Chris Christie’s bipartisan, blue-ribbon Pension and Health Benefit Study Commission in a report released in February.
Keeping benefits at their current level would require a 29 percent hike in state income taxes or increasing the sales tax to 10 percent, the study estimated.
“The already narrow window for a reasonable solution is closing fast. Only decisive action now can preserve a solid foundation of public employee benefits before the ever-growing hole the state has dug itself into becomes too deep for the state to dig itself out of without crushing tax increases and deep cuts to employee benefits and public services,” the commission stated.
That was eight months ago. Since then, Christie and lawmakers have failed to realign New Jersey’s costly benefits to a level comparable to what private-sector employers offer their workers.
Now the unfunded liabilities have reached a staggering $194.5 billion, according to aNew Jersey Watchdog analysis of State Treasury records. Here’s a breakdown of that debt:
New Jersey’s public pensions are underfunded by $113.1 billion. The state bears $80.5 billion of that burden. Local governments are responsible for the remaining $32.6 billion.
State and local governments are also on the hook for $81.4 billion in unfunded health benefits for retired and active workers. The state owes $65 billion; the local share is $16.4 billion.
The total shortfall is nearly six times higher than New Jersey’s total annual budget, currently $33.8 billion. To wipe the liability clean, each household in the state would need to write a check for more than $60,000 per household.
At the present pace, the shortfall for public employee pensions and health benefits will exceed $210 billion next year.
“That, in brief, is New Jersey’s future without meaningful public employee benefits reform – a future that is bleak, burdensome and unacceptable to everyone,” the commission concluded.
None of the New Jersey Senate’s 40 seats are on the Nov. 3 ballot. The next statewide election will be in 2017, when Christie’s second and final term expires.
FPANJ Women’s Group: Health Care Crisis is a Matter of Bureaucracy
Dr. Alieta Eck, founder of Zarephath Health Care Free Clinic and 2014 Congressional Candidate, tells FPANJ Women that taking government out of health care is key to lower costs
Upper Montclair, NJ – October 2015 – Financial Planning Association of New Jersey(FPANJ) has launched a Women’s Group and their inaugural event touched on a hot-button topic: health care costs and the Affordable Care Act.
The group invited Dr. Alieta Eck, M.D., to speak on “How Women Can Solve the Health Care Crisis” last week and her message was well-received among the financial professionals.
“Dr. Eck’s message of reducing costs resonated with our group, especially because we are always working with clients to manage their money, and recent changes in the health care system have proved challenging for many,” Trish Scott, Chairman of the Women’s Group said. “She shared a vision of positive change for the health care in the near future that was enthusiastically received.”
Dr. Alieta Eck pictured front row, second from left, with FPANJ Women’s Group Members and Nick Scheibner, FPANJ PR Chair.
Startling to most in attendance were the statistics comparing the rise in health administrators (more that 3500 percent) to doctors (approximately 100 percent) since 1970. It’s this addition to the health care bureaucracy that Dr. Eck points to for making affordable health care inaffordable for many patients.
“If you have a single mother who has to pay $268 per month for a premium, that’s a lot of money,” Dr. Eck explained. “But if you add a medical problem to that mix, most bronze plans require a $6000 deductible, which skyrockets those costs.”
She also explained that the measures of a good doctor between patients and bureaucracies are vastly different, much to the detriment of the patient-doctor relationship, saying, “Patients measure a doctor on their experience, how well they listen, how much they care. Bureaucracies focus on things like ‘clinical quality metrics,’ and maintenance of certification. In the end they view a good doctor as one who earns and spends less so the bureaucracy can earn more.”
Dr. Eck and husband Dr. John Eck founded the Zarephath Health Center, a free clinic for the poor and uninsured that currently cares for 300-400 patients per month utilizing the services of volunteer physicians and nurses. She explained they spend $13 per patient because of the volunteer staff, and is working with New Jersey lawmakers to pass theVolunteer Medical Professional Health Care Act in the Senate. The bill provides malpractice protection for doctors in their private practice if they volunteer four hours every week at a non-governmental free clinic such as Zarephath.
She contrasted these costs with the $13 billion Medicaid costs for New Jersey, which is approximately one-third of the state’s budget.
Dr. Eck explained the new law could also provide a way to “Help the poor without fleecing the public” with the cost of bureaucracy. The bill is co-sponsored by
Sen. Robert Singer, District 30; and Sen. Brian P. Stack, District 33.
More about Dr. Alieta Eck:
Dr. Eck’s topic “How Women Can Solve the Health Care Crisis,” stems from her interest in health care for the poor and her advocacy against the Affordable Health Care Act, testifying in opposition in 2011 at a U.S. Senate subcommittee hearing. She has campaigned twice for public office: first as a Republican nominee for U.S. Senate in 2013, and again in 2014 to fill the temporary seat in New Jersey’s 12th District. These bids were unsuccessful, but she continues to be active in advocacy.
By Mark Lagerkvist / February 24, 2015
New Jersey Watchdog
While New Jersey Gov. Chris Christie and state lawmakers consider a 25-cent a gallon gas tax hike to raise $2 billion a year to fund transportation projects, a war of words and statistics has erupted over the high cost of highways in the Garden State.
New Jersey pays in excess of $2 million a mile per year, more than 12 times higher than the national average, to maintain 3,338 miles of state-administered roads, according to aReason Foundation study.
Three days after a New Jersey Watchdog report, New Jersey Department of Transportation Commissioner Jamie Fox called the study “inaccurate and unfair” in acolumn published by NJ.com.
“Without the benefit of having the numbers the Reason Foundation used to base its calculations, there is no way to independently review its findings,” Fox wrote.
“That’s strange,” replied David Hartgen, the annual study’s senior author for 21 years. “Our annual highway report is based on data that New Jersey and other states provide themselves to the federal government. And we’ve readily shared the report’s data with state transportation departments and members of the media across the country.”
In his column, Fox argued the Reason study is flawed because it did not take into account increased costs associated with New Jersey’s multi-lane urban highways.
“It’s clear that the $2 million a mile statistic makes a nice headline but doesn’t hold up to scrutiny,” Fox said.
“If the spending per mile metric is punishing New Jersey for having highways that are six or eight lanes wide, as Mr. Fox alleges, then it would make sense that other states with wide highways would suffer too,” Hartgen responded. “But that is not the case.
“California, home to many of the busiest and widest highways in the country, spends $500,000 per mile,” Hartgen said. “New Jersey spends four times that — $2 million per mile. New Jersey spends three times as much as Massachusetts ($675,000 per mile), three-and-a-half times more than Florida ($572,000 per mile), four times as much as New York ($462,000 per mile), and 12 times more than Texas ($157,000 per mile), which is home to six of the 20 most populous cities in America.”
While Fox challenged the $2-million per mile figure from Reason Foundation, a nonpartisan libertarian think-tank, the transportation commissioner did not offer an alternate number.
“There’s no escaping the conclusion that New Jersey spends a lot of money on its state-administered highways and delivers poor performance in return,” Hartgen concluded. “The key question now is what will New Jersey do about it?”
That may be the biggest question of all. The state Transportation Trust Fund is out of cash and faces a $17 billion debt.
Christie is expected to address New Jersey’s highway dilemma Tuesday during the governor’s annual budget address to the State Legislature.
https://watchdog.org/201704/new-jersey-gas-tax-highways-cost/
by Carol Reif 09/28/201
SOMERSET, N.J. — Former state Assemblyman Robert Schroeder of Washington Township, who is accused of writing millions in bad checks, may go on trial in March 2016, according to a report in NJ Advance Media.
Schroeder, a Republican from Bergen County, appeared in court Friday, Sept. 25, for a status conference, NJ Advance Media reported. He is due back in court for another conference on Dec. 11, the report said.
The 55-year-old served in the 39th Legislative District for two terms. The district now includes parts of Bergen and Passaic counties, the media outlet reported.
According to NJ Advance Media, Schroeder has been charged with stealing close to $1.9 million from people who loaned him money for his private businesses and also with writing more than $3.4 million in bad checks. He also faces misconduct charges, the report said.
By Mark Lagerkvist / September 17, 2015
New Jersey ranks worst in the country for state debt, according to a new nationwide study.
Each state taxpayer would need to pay $52,300 to erase New Jersey’s existing bills — including public pensions and retiree health benefits — reports Truth in Accounting, a think tank in Chicago.
Among “sinkhole states,” New Jersey was followed by Connecticut, $48,600 debt burden per taxpayer; Illinois, $45,000; Kentucky, $32,600; and Massachusetts, $27,400.
In the past year, the debt per taxpayer in New Jersey increased by $16,300, or 45 percent, according to the nonprofit.
The findings are consistent with a New Jersey Watchdog analysis of State Treasury records that found the Garden State’s pension and health benefit deficit for public workers is nearing $200 billion.
Earlier this week, New Jersey Watchdog reported:
New Jersey’s public pensions are underfunded by $113.1 billion. The state bears $80.5 billion of that burden. Local governments are responsible for the remaining $32.6 billion.
State and local governments are also on the hook for $81.4 billion in unfunded health benefits for retired and active workers. The state owes $65 billion; the local share is $16.4 billion.
The total shortfall is $194.5 billion – more than $60,000 per household. The figure is nearly six times higher than New Jersey’s total annual budget, currently $33.8 billion.
At the present pace, those unfunded liabilities will exceed $210 billion next year.
In its report, Truth in Accounting reported states have a combined total of $1.3 trillion in debt despite balanced budget requirements in 49 states.
The lack of truthful, timely and transparent financial information is increasing cynicism and mistrust and it is a risk for our representative form of government,” said Shelia Weinberg, CEO of Truth in Accounting. “Citizens do not have the information need to hold their politician accountable, much less cast an informed vote.”
The full study is scheduled for release next week.
AUGUST 31, 2015 LAST UPDATED: MONDAY, AUGUST 31, 2015, 8:52 AM
BY KARA YORIO
STAFF WRITER | THE RECORD
North Jersey parents have always looked forward to a child’s first birthday. Not only is it a great milestone and cause for celebration, it was the point where the law allowed car seats to be flipped from rear-facing to forward-facing. As of Tuesday, that changes.
New Jersey law is falling in line with the American Academy of Pediatrics (AAP) recommendations, which have said that children should remain rear-facing until at least 2 years old or weighing more than 30 pounds.
“The science and studies are quite clear,” said Howard Mazin, an Englewood Hospital and Medical Center attending pediatrician, who has always urged his patients to keep their children rear-facing until age 2. “I know all parents want what’s safest for their kids.”
The other big change in the law is that kids should be in a booster seat until age 8 or 57 inches. Previously it was until 8 or 80 pounds. Children younger than 4 years old or under 40 pounds must be in a seat with a five-point harness (ideally rear-facing until hitting the limits set by the seat manufacturer) not a booster seat using the regular seat belt. The fines have also been raised from a minimum of $10 and maximum of $25 to a minimum of $50 and maximum of $75.
Faced with the difficulties of benefits reform, some stakeholders’ instincts have been to stand still and resist change. The state’s current position, however, is untenable: It faces an $82 billion pension deficit which, in the absence of funding increases beyond the realm of reason, will lead to state workers’ pensions beginning to run out of money within a decade. Credit ratings agencies this week again stressed the state’s need to reduce its employee benefits costs. Moody’s Investors Service concluded in assessing the state’s creditworthiness: “Without meaningful structural changes that improve the affordability of the state’s liabilities, the state’s structural imbalance will persist and/or pension liabilities will grow, and the state’s rating will continue to fall.” Samantha Marcus, NJ.com Read more
By Samantha Marcus | NJ Advance Media for NJ.com
on July 26, 2015 at 6:00 PM, updated July 27, 2015 at 8:24 AM
TRENTON — In the latest salvo in the battle between New Jersey and its public workers, the heads of the state’s largest pension funds are accusing the state of breaching its contract by underfunding government workers’ pensions.
The pension heads are seeking billions of dollars in damages.
The pension fund trustees’ newly amended complaint opens a new front in the fight for pension funding in which Gov. Chris Christie had already declared victory following a state Supreme Court ruling last month that the state couldn’t be forced to make the payments into the retirement system promised under a 2011 pension law.
That ruling has so far spared the state from having to scrape together billions of additional dollars in pension contributions.
JULY 9, 2015, 7:36 PM LAST UPDATED: FRIDAY, JULY 10, 2015, 12:55 PM
BY DUSTIN RACIOPPI
STATE HOUSE BUREAU |
THE RECORD
The Powerball lottery jackpots are about to get bigger – but so too will the odds against winning, a change that will likely mean fewer winners but more money for the states that run the game.
The changes come as multistate lottery sales have dropped by a third in New Jersey, cutting into one of the state’s biggest revenue sources. Slower sales could mean less for education programs and housing for veterans and the disabled.
And it comes as lottery officials here and in other states are blaming “jackpot fatigue,” the claim that sales drop because customers aren’t excited by smaller jackpots. Experts and lottery critics, however, said any change that makes bigger jackpots might either backfire — since there would be far fewer winners of big payouts, causing players to keep away — or have just a short-term effect on sales.
The change is set to take effect Oct. 4 and was made by the consortium that oversees the multistate lottery; states that offer the game must agree to the new rule.
Once the change is in place, the odds against winning the Powerball will grow by two-thirds – from a one-in-175,223,510 chance of winning to one in 292,201,338, according to the New Jersey Lottery.
Put another way, it’s 400 times more likely an individual will get struck by lightning than win the Powerball jackpot under the new rules. As it stands now, winning this lottery is only 250 times more likely than facing a lightning strike.
Players currently win by matching five numbers from a set of 59 white balls and a sixth – the Powerball — from a set of 35 red balls. Numbers are drawn twice a week. If no one matches all six numbers in a drawing, the jackpot increases by at least $10 million. In October, the number of white balls available will increase to 69, while the pool of red balls will decrease to 26.
