Public Spending, ECONOMIC OPPORTUNITY FOR ALL
Regina Egea Budget Testimony: Taxpayers are Speaking Clearly on Affordability, Taxes
On Tuesday, March 28th, GSI’s president, Regina M. Egea, offered the following testimony before the Senate Budget and Appropriations Committee:
Good Afternoon Chairman Sarlo and Committee Members.
Unlike many others appearing before the legislature, I do not represent any special interest seeking additional spending. In fact, I come before you to request you spend less, not more.
My testimony is on behalf of the taxpayers who spoke clearly in last week’s the Rutgers-Eagleton Poll expressing record dissatisfaction on affordability and taxes. That’s really no wonder since, as the Governor states matter-of-factly in his own budget documents, “tax revenues have soared above trend.”
Returning to the Governor a budget that is lower by at least $2 billion can convince your constituents that you will lead our state to a more affordable and prosperous future. Based on the Garden State Initiative’s work that I lead, we recommend:
…..3 ways to reduce revenues
Pass pending bills to index state income-tax brackets to the annual inflation rate (OLS estimate $150 to $400M)
Lower Corporate Tax Rate from the highest in the nation 11.5% to 6.82% which is the average of the top rates in the US and will generate revenues similar to before the “temporary surcharge” you enacted in 2018.
Phase out NJ Inheritance Tax (FY budget $392M). We are 1 of only 4 states left with this tax and it’s a competitive disadvantage for anyone deciding where to live.
….to reduce spending
Match Massachusetts K-12 education cost per pupil since we all know Massachusetts has the same high performance as NJ. Moving from NJ’s $22K per student to MA of $17.5K will save NJ taxpayers annually $6.3 billion. Phased-in over 3 years, this reform will save $2.1B each year.
Reduce Municipal Aid by 1% (by $200M) by enacting an enforceable, 1% hard Cap on Property Tax Growth (saves another $100M across all NJ)
Align public employee health coverage consistent with private sector plans can save $1 billion phased in over 3 years by 1% ($370M per year)
Do not fill any non-customer-facing vacancies in any department (2% of workforce = $140M full loaded) and pass legislation to eliminate all benefit accruals for sick & vacation time saving $330M annually over 3 years (total liability $1B so will reduce local property taxes $330M per year)
Lastly, there are opportunities during Hearings to make New Jersey more affordable today and tomorrow which is consistent Mr. Chairman, with your stated desire to view the budget over multiple years:
On energy, the BPU President has publicly admitted that the actions they are taking are “very expensive”. Our residents already pay 16% more to light and heat our homes; only you have the opportunity to require public disclosure of how much our utility rates will escalate before any more contractual commitments are made.
Suspending half of the NJ Gas Tax up to 6 months ($480M in FY 23 budget), will save NJ drivers $100 per month. Billions from the federal Infrastructure Bill and the (over $600M) available bonding capacity in TTFA can backstop short term infrastructure demands.
In closing, taxpayers are relying on you to rein in government spending so they can keep their homes lit and warm, their cars filled with gas, and able to feed their families during this crushing inflationary environment that’s been created in our country.