Bill Would Allow Deduction of All Property Taxes Paid from State Income Tax
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would provide relief for New Jersey’s over-burdened property taxpayers.
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would eliminate the current $15,000 cap and allow taxpayers to deduct the entire amount of property taxes paid on their income tax.
The bill, S-2279, would allow taxpayers to deduct from state income tax the entire amount of property taxes paid on their principal residence, eliminating the current $15,000 cap.
“When New Jersey residents complain about the state being too expensive, they are often referring to our exorbitant property taxes,” said Senator O’Scanlon (R-13). “There are plenty of other taxes adding to the burden on taxpayers, but it is property taxes, the No. 1 highest property taxes in the nation, that pack the strongest punch. There’s absolutely no justification for stopping families from deducting every last cent from their income taxes.
“There has been a rallying cry in Washington to reinstate the federal cap on the SALT (state and local tax) deduction, yet New Jersey continues to cap what homeowners can deduct on an unfair and burdensome tax,” O’Scanlon added.
A national study conducted by WalletHub last year revealed that the property taxes on a median value home in New Jersey were $2,500 more than the next highest state.
In 20 years, the average property tax bill in the state has almost doubled, from $4,972 in 2002to $9,284 in 2021.
“For property owners who pay in excess of $15,000 each year, the cap has the effect of a taxon a tax,” said Senator Pennacchio, who sponsored legislation signed into law in 2018 raising the cap from $10,000 to its current level. “They pay their property taxes, then they have to turnaround and pay income tax on the same money. Enough already.
“People need a break. In this state, especially under this Governor, residents are constantly being bombarded with new taxes or new ways for the government to grab their hard-earned money,” Pennacchio continued. “Eliminating the cap will provide some rare relief come tax time each spring.”
Under the O’Scanlon/Pennacchio bill, the cap for renters, who can deduct “rent constituting property tax” of 18 percent of rent paid, would also be uncapped.
Today, Senate Republican Leader Anthony M. Bucco (R-25) and Senate Republican Budget Officer Declan O’Scanlon (R-13) sent a letter to Governor Murphy calling on him to propose a restoration of the $150 million in funding known as “Municipal Relief Fund Aid” in his final budget proposal in February 2025.
In an excerpt from the letter, Sens. Bucco and O’Scanlon said:
“A $150 million municipal aid cut in the State’s current budget adopted in June will be reflected for the first time in municipal budgets adopted this coming Spring. The impact of the cut will be property tax increases and/or local service cuts across the State unless you propose a restoration in your final budget proposal in February. We strongly urge you to do so.”
The full letter is available below or click here to view a copy.
Dear Governor Murphy:
A $150 million municipal aid cut in the State’s current budget adopted in June will be reflected for the first time in municipal budgets adopted this coming Spring. The impact of the cut will be property tax increases and/or local service cuts across the State unless you propose a restoration in your final budget proposal in February. We strongly urge you to do so.
The aid cut in question is attributable to the total elimination of $150 million in funding known as “Municipal Relief Fund Aid.” That funding was in the State’s two prior budgets. It had been included as part of a bipartisan initiative to phase in a restoration of Energy Tax Receipts and other municipal aid over several years.
In our own legislative districts, Morristown’s budget will lose $300,000 and Middletown will lose $630,000. Losses will exceed $10 million throughout our respective counties. But impacts are statewide. Elizabeth and Woodbridge -- respectively in the Senate President’s and Speaker’s legislative districts -- will lose $3 million each in upcoming budgets. Camden will lose $10.5 million.
There are a few municipalities whose current budgets already reflect the aid cuts. They are canaries in the coal mine. Newark’s $11 million cut resulted in a budget crisis, and your Administration then gave the city an emergency “loan” to prevent insolvency.
The aid cut will hit municipalities after years of high inflation. And it will hit those municipalities remaining in the State Health Benefits Plan just as their taxpayers and employees start paying 16% higher health insurance premiums being charged by the State.
We have proposed billions of dollars in State budget savings, program reforms, and non-tax revenue ideas over the past several years that have gone ignored. Embracing just some of our ideas would allow restoration of the cut and prevent property tax spikes and/or reductions in local services that could potentially include law enforcement and sanitation.
Thank you for considering our request as you develop your final budget proposal.
Sincerely,
Senator Anthony M. Bucco, Republican Leader
Senator Declan J. O’Scanlon, Jr., Republican Budget Officer
c Members Board of Directors, League of Municipalities
Mike Cerra, Executive Director, League of Municipalities
Senator Declan O'Scanlon (R-Monmouth) a member of the Senate Budget and Appropriations Committee, released the following statement on today's announcement by Governor Murphy:
Sen. Declan O'Scanlon, a member of the Budget Committee, said Gov. Murphy's millionaire's tax is bad policy - calling it a relentless, rabid desire to appease the progressive base that will end up hurting everyone, including the people he is trying to help.
"Governor Murphy's relentless, rabid desire to appease his progressive base will end up hurting everyone, including the people he is trying to help," Senator O'Scanlon said.
"The top 1.4 percent of earners in New Jersey generate 41 percent of our total income tax revenue. Virtually all of those taxpayers can change their taxable residence – they don’t need to physically move. These people are also our job creators, capital investors, and charitable donors. When they take their income and investments out of state, who will be left to tax? What will happen to our economy?
"In the end, everyone, regardless of their means, will suffer because Governor Murphy would rather shut down the government than take his head out of the sand and acknowledge the dire need for real fiscal reform.
"We know what we need to do, and now we have the will to do it in the Legislature. The only thing standing in the way is a lack of executive leadership.
"Increasing taxes on anyone in New Jersey, including millionaires, is just bad policy. It's also completely unnecessary. If the governor would work with us to advocate for Path to Progress solutions, such as pension and health benefit reform, we wouldn't need any new taxes at all. Platinum-to-gold alone could save hundreds of millions of dollars a year - and even more overtime.
"I am glad to hear Governor Murphy acknowledge the property tax crisis, but we can lower property taxes without asking families to pay more. It is time for the Governor to stop leaving voicemails and get in the room, so we can hammer out a compromise and finally get real fiscal reforms signed into law."
Senate Budget Committee member Senator Declan O’Scanlon (R-Monmouth) released the following statement on the newly finalized teacher contract in Jersey City, and the lawsuit filed by the Jersey City School Board demanding more state aid.
In his statement, O’Scanlon calls the contract a shameful plan to skirt around critically-needed benefit reforms, at the expense of innocent kids and taxpayers in Jersey City, and across the state:
“It takes a lot of guts to sue the State for more school funding, and then finalize a teacher contract that amounts to a shameful give-away that could negatively impact kids statewide. The audacity of such hypocrisy is astounding. Every family and taxpayer in New Jersey should be appalled.
“This contract diverts precious financial resources that should be going to kids in Jersey City classrooms. It’s also shameful ploy to get around our responsibility to enact the benefit reforms we have to pass to save the public pension system from going bankrupt.
“At some point, school board officials and local leaders in Jersey City are going to have to acknowledge their culpability in New Jersey’s fiscal crisis. They have received far more than their fair share for years.
“Bad contracts and PILOT programs have starved the local school district of resources, and led them to this point. The rest of New Jersey’s taxpayers should not have to pay to remedy these self-inflicted wounds. It’s not their responsibility.
“This contract and the lawsuit need to be tossed out, and rampant PILOT policies need to be reigned in and accounted for. Then, education advocates and officials from Jersey City and across the state need to come to the table and work with us to enact the school funding and fiscal reforms necessary to get New Jersey back on track – or else kids and taxpayers everywhere will pay the price.”
Senator Declan O’Scanlon (R-Monmouth) issued a statement today following news that the Governor has proposed taking $33 million from the State Firefighters Relief Fund designed to pay for burials of fallen firefighters and financial assistance for firefighters in need:
“It is beyond confusing, and frankly shocking, that the Administration was not more proactive in reaching out to stakeholders after the comptroller’s report on the status of the relief fund was released. Although the fund appears to be flush, it could quickly and easily be depleted if we were to mismanage any reallocation of funds and completely destroy the initial intent of the fund: to aid needy firefighters.
“Talking to all stakeholders before committing to a funding or policy change is imperative to ensuring that you are not creating an even larger problem than the one you might be trying to solve. When I learned that the Governor had not engaged all entities in the firefighter community before he chose to take $33 million from the firefighters’ fund and move it into the budget I was baffled. I’ve had some frank, tough discussions with the firefighting community and other public workers about the critical fiscal issues we face. Those discussions are not always fun. But that makes it all the more imperative that the discussions are had, that the respect is shown, that input is genuinely sought and taken into account.
“Firefighters are a critical component of our public safety and first responder community. These funds should be used for the betterment of our firefighters and perhaps improvement of the state of the sector itself, not to plug up completely unrelated budget holes. Since the issuance of the Comptroller’s report we have been reaching out to stakeholders to discuss the best way to expand access to, and manage the fund to fortify the firefighting community without destroying the fund’s primary intent.”
Says not requiring full restitution in civil settlements is ‘ludicrous’
Senator Declan O’Scanlon (R-Monmouth) announced his plans to introduce legislation designed to eliminate loopholes in certain civil settlement deals. The legislation comes as a direct result of recent investigations into Medicaid fraud settlements in Lakewood.
Sen. Declan O’Scanlon announced his plans to introduce legislation designed to eliminate loopholes in certain civil settlement deals.
“When I heard about details of the civil settlement agreements in the Medicaid fraud cases I was concerned,” O’Scanlon stated “I immediately called my staff to get legislation started.”
O’Scanlon’s bill primarily eliminates the option for individuals to pay back anything less than full restitution under a civil settlement agreement with a State entity. Recent articles in the Asbury Park Press and others highlighted several individuals who only had to pay back half of the money they received.
“The notion that people who have knowingly received benefits they were not entitled to would only be required to pay back half of that amount of money is completely ludicrous. It’s basically like letting someone get away with stealing from taxpayers. That’s unacceptable.”
O’Scanlon’s legislation goes one step further when it comes to elected public officials and state employees with fiduciary duty--requiring them to forfeit their positions and be barred from public office or employment for ten years.
“No one should be allowed to steal from taxpayers, but I wanted to make it very clear that elected officials and government employees are held to an even higher standard. How could we allow an elected official to stay in office when they’ve broken the public trust? Furthermore, government employees with a fiduciary duty and/or responsibility to award contracts cannot be allowed to stay in such positions after admitting to making willful misrepresentations in order to obtain undeserved benefits.”
“This legislation sends a clear message that there is nothing to gain by gaming the system. There is a finite amount of funds in these benefit categories. We must make sure taxpayer dollars are going to folks truly in need.” O’Scanlon concluded.
Senate Republican Leader Anthony M. Bucco and Senate Republican Budget Officer Declan O’Scanlon slammed Governor Murphy for avoiding real issues like the affordability crisis in New Jersey after a new report ranked New Jersey as the worst state on the 2024 State Business Tax Climate Index.
“Governor Murphy’s failed progressive priorities have hampered New Jerseyans with some of the highest tax burdens in the country. It is indefensible that Governor Murphy and Trenton Democrats continue to avoid the real issues while everyday New Jerseyans suffer under the crushing weight of the cost-of-living increases created by those very progressive policies they support,” said Bucco (R-25). “Democrats in Trenton have moved in lockstep with Governor Murphy to approve his extreme progressive wish list while squandering billions of dollars that could have been used to lowered taxes. Now, only when it is politically convenient will Democrats beg Governor Murphy to stop toll tax increases after rejecting Republican budget proposals that would have stopped this.”
The 2024 State Business Tax Climate Index, prepared by the Tax Foundation, reported that New Jersey has one of the highest property tax burdens, the highest-rate corporate income taxes, and one of the highest-rate individual income taxes in the country. New Jersey also levies a progressive inheritance tax.
The New Jersey Turnpike Authority unanimously approved a 3% toll increase that will start January 1, 2024. This would be the fourth time since 2020 that tolls have been increased in New Jersey. Turnpike commuters will now be paying close to 50% more in tolls starting in 2024 than when Murphy first took office.
“If Republicans had been in charge, none of the toll increases that are draining more than $1 billion from road users every year would have happened. Our Republican budget proposal had enough budget revenue to allow for proper road improvements without piling on unnecessary taxes like this onto drivers,” said O’Scanlon (R-13). “Instead, Trenton Democrats enabled the Murphy administration to recklessly spend money on pet projects like a French Arts Museum in Jersey City, a private swimming pool in Deal, a Dominoes Club, and artificial turf cricket fields. While Governor Murphy avoids the real issues that impact New Jerseyans every single day, Republicans stand ready to address the affordability crisis in New Jersey.”
Senate Republican Budget Officer Declan O’Scanlon sent a letter to the New Jersey Local Finance Board calling on members to enforce laws against the unlawful waste of taxpayer dollars on boat checks with respect to an application from the Jersey City Municipal Utility Authority (MUA) to issue more than $150 million in debt. A recent report from a Jersey City councilman alleged that public employee contracts in both Jersey City and in the MUA were either not compliant with prohibitions and limitations on cash payments for unused sick or vacation time, or were ambiguous.
“The alleged misuse of State resources for sick and vacation leave in Hudson County is an unconscionable and unlawful waste of taxpayer dollars,” said O’Scanlon (R-13). “The New Jersey Local Finance board should refrain from taking any action on the MUA application until it is certain that Jersey City and the MUA are in compliance with State laws that regulate cash payments to employees for unused sick and vacation time.”
In the letter, Senator O’Scanlon suggested how the New Jersey Local Finance Board, the Division of Local Government Services, and the Division of Community Development could use broad discretion when considering various applications for approvals and/or grants.
Senator O’Scanlon also expressed support for a separate letter that was sent to the New Jersey Local Finance Board urging its members to reject Jersey City’s MUA application on the grounds that the City’s fiscal deficits would become larger and present a potential burden for taxpayers throughout the State in the future.
The New Jersey Local Finance Board is scheduled to meet the morning of October 25.
The full text of the letter is below (Click Here for PDF):
Dear Commissioner Suarez and Members of the Local Finance Board,
I respectfully request that you refrain from taking formal action at your meeting tomorrow on a proposed application submitted by the Jersey City Municipal Utility Authority (the JCMUA) to issue more than $150 million of debt until you are satisfied that Jersey City and all of its agencies, including the JCMUA, are in compliance with State laws that prohibit and/or limit, cash payments (commonly known as “boat checks”) to employees for unused sick and vacation time.
Councilman Solomon in Jersey City recently issued a report which can be found at Final Version: A Review of Sick and Vacation Leave Policies in Hudson County.pdf – Google Drive alleging that public employee contracts in both the City and the JCMUA are either not incompliance with prohibitions and limitations, or are ambiguous as to compliance in practice. The burden of Jersey City’s “boat checks” has been so severe that Jersey City’ is unable to pay them without financing them every year — with the latest Jersey City audit showing a new $10 million financing just last year. I am unaware of what additional financings may have been undertaken by the JCMUA or other authorities in the recent past.
Though it was Councilman Solomon’s report and the Authority’s application which prompted me to contact you, I would request that a similar approach be taken by the Board and the Division when considering various applications for approvals and/or grants pending before the Local Finance Board or the Division.
Using broad discretion that is already available to the Division of Local Government Services and/or the Board, you could help enforce statutory limits on boat checks in two easy steps. First, require licensed labor attorneys and CFOs to certify as part of any application for discretionary approvals or grants that employee contracts and policies are in compliance.
Second, routinely check State comptroller reports, local government audits, and reports by other public officials (including Councilman Solomon’s report) and require applicants to address any negative findings prior acting on applications.
As indicated, it’s not just the Local Finance Board that could be taking this approach. The Division of Local Government Services and the Division of Community Development administer probably close to 100 discretionary “legislative grants” and other grants to local governments. For example, the Division of Local Government Services has been charged with administering a special $2 million grant to Jersey City in this year’s state budget, and the Division could use its discretion to condition disbursement upon the simple steps to ensure enforcement.
If for whatever reason, you believe your office lacks either the authority or resources to take these simple discretionary steps to prevent the unconscionable and unlawful waste of taxpayer and ratepayer resources on boat checks that fleece taxpayers, please advise and I will be happy to draft legislation or funding as may be needed.
As a final matter, please do not interpret this letter as otherwise supporting the JCMUA’s application. To the contrary, I strongly support concerns expressed by Senator Testa in a recent letter to the Board. Those portions of the application that amount to the JCMUA issuing debt to help paper over city deficits through expensive gimmicks ought to be rejected.
I look forward to working with you as Acting Commissioner and Chair of the Local Finance Board to finally get compliance with the laws we have, and to broaden them to go farther.
Sincerely,
Declan O’Scanlon
Senator Declan O’Scanlon (R-13) and Senator Michael Testa (R-1) announced a plan to provide $4.32 billion of “Give It Back” property tax relief to New Jersey’s towns and counties.
"The Murphy administration is sitting on billions of dollars of unallocated debt relief funds while towns and counties with substantial needs are being ignored," said O'Scanlon, the Senate Republican Budget Officer. "Instead of letting that money waste away and get devalued by inflation, we are proposing to 'Give It Back' to towns and counties on a per capita basis to help them pay down debt and meet their important capital needs. Our proposal is a fair and transparent way to provide every New Jerseyan, every county, and every town with real property tax relief. There’s no other tax relief plan offered by anyone that comes close to what Republicans are proposing."
The senators introduced S-3906, which would appropriate $4.32 billion from the New Jersey Debt Defeasance and Prevention Fund to towns and counties to retire and defease local debt or fund capital projects on a pay-as-you-go basis.
Under the bill, $3 billion would be allocated to each municipality on an equal per capita basis wherein each municipality receives the same dollar amount per resident. Similarly, the remaining $1.32 billion would be allocated to each county on an equal per capita basis.
The allocations to towns and counties would average more than $100 million per legislative district and is the equivalent of approximately $1,250 per New Jersey family.
Click here to view allocations for each municipality.
Click here to view allocations for each county.
The $4.32 billion includes $1.97 billion in currently unallocated balances in the State's debt defeasance fund along with another $2.35 billion that would be credited from the State's General Fund.
There is no fiscal impact on the overall budget or expected surplus since the $2.35 billion that would be transferred to the Debt Defeasance and Prevention Fund under the legislation matches the amount recommended by Governor Murphy in his FY 2024 budget proposal.
"Our fair and transparent 'Give It Back' proposal stands in stark contrast to the back-room dealings of Democrats who have doled out funds to a favored few while most towns and counties with legitimate needs have gotten nothing," said Testa, a member of the Senate Budget & Appropriations Committee. "Every town and county will get a fair share of funding under our proposal, and they will be able to use their portion to reduce their debt or pave roads, build parks, or advance other important capital projects that otherwise would have been funded with debt. Ultimately, this is $4.3 billion of new property tax relief that local governments sorely need as their health benefit premiums and pension costs have soared and inflation is at a40-year high.”
The legislation requires the $4.3 billion to be distributed to towns and counties within 30 days of its enactment.
The entire Senate Republican caucus has signed on as sponsors of the “Give It Back” property tax relief legislation.
The Republican members of the Senate Budget & Appropriations Committee called for a windfall of State tax revenues to be returned to New Jersey taxpayers after the State Treasury revealed billions in unexpected revenues that isn't needed to balance the budget or meet important priorities.
The Republican members of the Senate Budget Committee called for a windfall of State tax revenues to be returned to New Jersey taxpayers.
The following statement was released today by Senate Republican Budget Officer Steven Oroho (R-24), Senator Declan O’Scanlon (R-13), Senator Sam Thompson (R-12), and Senator Michael Testa (R-1):
“On Monday, Senate Republicans put out a comprehensive plan for the budget and for effectively utilizing the nearly $6.5 billion of new federal relief funds at New Jersey’s disposal.
“We identified important priorities that Governor Murphy had ignored in his proposal, including:
-stopping a destructive payroll tax increase on employers that would otherwise take effect in July;
-preventing school funding cuts to nearly 200 rural and suburban school districts proposed by Governor Murphy;
-funding an overhaul of the State broken IT computer systems to help unemployed workers get their claims approved faster and to prevent long lines at the MVC;
-continued funding for small business grants to aid in the recovery of our economy and the rehiring of workers, and
-repaying more than $4 billion of debt to offset the completely unnecessary borrowing that Governor Murphy misled the Supreme Court to approve.
"We want to be clear that we could fund all of these important priorities and others identified by our caucus in the comprehensive plan we proposed without dipping into the new money identified by OLS and the Treasurer over the last day or two.
"Our plan balances the budget, meets all of those important needs, and effectively utilizes the new ARP funds, for which the Murphy administration still has no plan.
"So the question is, what should do we do with the billions of dollars of extra funds that New Jersey doesn’t need?
"We believe that money should be returned directly to taxpayers, which has proven to be the most effective way to support our economic recovery.
"We also believe we can expand property tax relief, possibly through expansions of the Homestead Benefit and Senior Freeze programs, maybe even through direct property tax credits.
"We should discuss expanding the Earned Income Tax Credit to provide additional support to low-income, working families.
"We’re open to having conversations about the best way to return these funds back to taxpayers, and absolutely believe that’s the right thing to do for funds the State didn’t expect and doesn’t need.
"We also believe these discussions should happen in an open, transparent process that includes the public.
"We shouldn’t let the Democrats do what they do every year, which is drop a spending plan onus two minutes before they call a vote before anyone knows what’s in the bill.
"There are three weeks left until the next budget needs to be adopted. Let's start having these important talks today."
The Republican members of the Senate Budget & Appropriations Committee proposed more than $6 billion of new tax relief, $1 billion for debt reduction, and greater transparency and fairness in State spending in a detailed plan (click here for PDF) to amend Governor Murphy’s proposed FY 2024 State Budget. The proposal would grow the budget surplus to nearly $6.5billion.
"With a sizable budget surplus and billions more set aside in debt and pandemic relief funds, the State has unprecedented resources that the Murphy administration has failed to use effectively to meet New Jersey's needs," said Senator Declan O'Scanlon (R-13), the Republican Budget Officer. "We have proposed a comprehensive and responsible budget plan that would increase property tax relief by $4.3 billion, prevent toll hikes and payroll tax increases, repay more State debt, impose meaningful spending restraints, and restore transparency and fairness to government spending."
The Senate Republican budget plan provides a comprehensive framework for allocating $14billion of surplus, pandemic relief, and debt relief funds that is sitting idle in state accounts and being eroded by inflation. Additionally, it imposes spending restraints and addresses important needs ignored by the governor’s budget proposal in a balanced manner.
Senate Republicans proposed more than $6 billion of increased tax relief for New Jersey families and businesses, including:
-$4.3 billion of "Give It Back" property tax relief to towns and counties to repay taxpayer funded debt or to pay for capital projects that otherwise would be funded by new debt through Senate Bill No. 3906;
-$1.2 billion to prevent tax and toll increases, including $550 million to stop payroll tax increases on both employees and employers, $500 million to fight tax bracket creep, and $172 million halt planned toll increases on the New Jersey Turnpike, Garden State Parkway, and Atlantic City Expressway;
-$363 million of school and municipal aid increases, including the restoration of $165million of Energy Tax Receipt payments to towns that Governor Murphy cut, the restoration of $3.5 million of Municipal Open Space PILOT Aid, and $165 million to reverse the administration's school aid cuts, fully fund extraordinary special education, and increase funding for transportation services;
-$75 million to establish a state income tax deduction for charitable contributions to New Jersey-based nonprofit organizations; and
-$30 million to double the Veteran Property Tax Deduction from $250 to $500.
"Governor Murphy's original budget proposal calls for higher taxes and tolls even as the State is swimming in money," said Senate Republican Leader Steven Oroho (R-24). "Senate Republicans are offering a responsible budget plan that doesn't ask New Jersey families, businesses and drivers to pay more when the Murphy administration doesn't need the money. We want to do more than just stop tax and toll hikes, we're proposing to give back billions that are sitting idle in State accounts to our towns and counties for property tax relief."
The Republican budget plan also prepares the State for a possible recession through a balanced approach that includes:
-primarily allocating one-time revenues to one-time, nonrecurring purposes, including:$4.3 billion of local government debt reduction and pay-as-you-go capital infrastructure investments; restoring the health of the Unemployment Insurance Fund; and paying down existing State debt;
-advancing longer-term reforms that make our economy stronger;
-proposing increases in spending for various priorities that will strengthen the State, but funding them with 2:1 offsetting spending restraints – for a net reduction in State spending; and
-growing the surplus to a healthy, but not excessive, $6.445 billion (12% of budget).
"Our plan is a fiscally conservative roadmap to protect the State from the impact of a recession while ending many of the excesses and abuses that led to a 50% increase in spending under Governor Murphy," said Senator Michael Testa (R-1). "This is the best way to drive economic growth, put money back in the pockets of New Jersey taxpayers, and end the political favoritism that has dominated State appropriations in recent years."
The proposal also establishes greater transparency and fairness for debt and pandemic relief funds that have been used as slush funds by Governor Murphy and Trenton Democrats, including:
-a major proposal to share $4.3 billion from the New Jersey Debt Defeasance and Avoidance Fund with local governments for local debt reduction and avoidance and property tax relief;
-the timely allocation of federal COVID funds that have sat unallocated for two years, which is critically important given the pending claw back of unobligated pandemic relieffunds as part of the deal signed into law by President Biden to raise the federal debt limit; and
-preventing the creation of a third slush fund proposed by the Governor that would control $700 million of new taxes collected from Horizon premium payments.
"Never in New Jersey history have we seen so much taxpayer money spent with such little oversight as we have over the last three years under the Murphy administration," said Senator Doug Steinhardt (R-23). "Nothing good happens when billions can be spent behind closed doors with no public input and virtually no accountability. We've watched for three years as more than $10 billion of pandemic and debt relief funds have been divvied up by Democratic bosses for politically favored projects that provide little benefit to most New Jerseyans. It's waste and abuse that our budget plan puts to an end."
Republicans serving on the Senate Budget & Appropriations Committee proposed $8 billion of new tax relief, increasing the state surplus to $5 billion, more than doubling proposed debt repayments, and increasing legislative oversight of Murphy administration spending in a detailed budget plan (click here for PDF) to amend Governor Murphy's proposed FY 2023 State Budget.
Senate Republicans have proposed a comprehensive budget plan with $8 billion of new tax relief, including 'Give It Back' rebates totaling $1,500 for most New Jersey families.
"Senate Republicans have offered a detailed budget plan to make responsible use of an unprecedented $11 billion windfall of state and federal taxpayer funds to support struggling families, solve long-term problems, and ensure that New Jersey is well prepared for the next recession," said Senator Declan O'Scanlon (R-13), the Republican Budget Officer. "We're leading the way in showing Governor Murphy and the Democrat legislative majorities how to give back billions to taxpayers while building a responsible surplus and paying down substantial additional debt. It's no surprise that everyone else is suddenly rushing to find ways to 'Give It Back' as Senate Republicans have advocated for months."
The Senate Republican budget plan provides a comprehensive framework for utilizing $8 billion of previously unexpected revenues that recently have been forecast for the current and upcoming fiscal years and $3 billion that remains unallocated from the $6.2 billion block grant New Jersey received last year through the American Rescue Plan Act. Additionally, it imposes spending restraints and addresses important needs ignored by the governor’s budget proposal in a balanced manner.
Senate Republicans have proposed $8 billion of increased tax relief for New Jersey families and businesses, including:
-$4.5 billion through a pair of "Give It Back" tax rebates (S-2243 and S-2290) totaling$1,500 for millions of families;
-$1 billion of property tax relief by reversing Governor Murphy's proposed cuts to municipal aid and school aid, fully funding extraordinary special education, increasing the veterans property tax deduction, and more;
-$790 million in structural tax reductions, including raising the retiree income exclusion to$250,000, creating a deduction for charitable contributions, and eliminating the CBT surcharge early; and
-$2 billion to halt planned tax and toll increases by indexing state income tax brackets for inflation, replenishing the Unemployment Insurance Fund to prevent upcoming employer/employee payroll tax increases, stopping automatic toll increases on January1, and rescinding a major tax increase on the state's largest health insurer and its customers.
The Republican proposal would prepare New Jersey for the next recession through a balanced approach that includes:
-Growing the budget surplus to more than $5 billion, which is approximately 10% of the budget;
-Focusing one-time revenues on funding nonrecurring needs such as pay-as-you-go capital infrastructure investments (including MVC and unemployment computer system upgrades), restoring the health of the Unemployment Insurance Fund, and more than doubling proposed debt repayments to $3.1 billion;
-Advancing longer-term reforms that make our economy stronger, including repatriating income taxes unfairly collected by New York and pension and benefit reforms that end abuses and give employees more choices; and
-Establishing additional restraints in recurring spending in amounts that far outstrip proposed increases to address unfunded priorities.
"We recognize that much of the windfall at our disposal is likely nonrecurring, which would make it irresponsible for anyone to propose substantial permanent spending increases that we won't be able to support when the next recession comes, which may be sooner rather than later," said Senator Sam Thompson (R-12). "Our plan ensures that New Jersey is prepared for the next downturn by establishing a healthy $5 billion surplus that amounts to 10% of the budget, while making substantial investments in critical infrastructure, including to fix broken computer systems at unemployment and the MVC. Given the current financial challenges many families are facing due to high gas prices and inflation, we’ve proposed temporary school aid restorations to prevent property tax hikes in nearly 200 districts that could devastate household budgets. Further, we've proposed real reforms that would strengthen the state budget, lower costs, and provide additional relief to taxpayers in both good times and bad."
Finally, the Senate Republican budget plan imposes legislative oversight over billions of dollars that the Murphy administration wants the unilateral authority to spend in the upcoming fiscal year by:
-Providing for full legislative approval of $3 billion of unspent American Rescue Plan Act funding. Under the current fiscal year budget, the secretive Joint Budget Oversight Committee (JBOC) rubber-stamps proposed allocations after Democrat leaders make backroom deals to divvy up the funds. Governor Murphy has stripped all legislative oversight and approval of these funds in his proposed budget;
-Ending blank-check provisions in the budget that allow the governor to appropriate funds to settle litigation without legislative approval. This blank check allowed Governor Murphy to pay $53 million without oversight to settle lawsuits related to unnecessary deaths caused by his administration's pandemic policies at State-run veterans homes. These provisions also allowed the Murphy administration to pay a $21 million settlement without scrutiny for a string of administrative failings that led to serious abuses at the Edna Mahan women's prison;
-Denying Governor Murphy's requests to spend as much money as he wants to: expand the scandal plagued free-and-reduced-price school meals program; subsidize health insurance bought on the state exchange; and provide free insurance to the children of illegal immigrants, which could easily grow from the $11 million proposed by the administration to more than $200 million when fully phased-in; and
-Closing loopholes in the Debt Reduction and Avoidance funds that allows for new capital spending that is not authorized under both the constitution and existing statutory debt authorizations. We propose all funds for debt retirement and avoidance be appropriated by the full Legislature after a full and detailed proposal has been submitted by the governor. Otherwise, funds can be allocated by the governor and JBOC with little transparency for pork spending rather than actual debt reduction.
"If we don't impose strict legislative oversight and discipline to effectively utilize the state's $11billion windfall, the Murphy administration is sure to make last year's 'orgy of pork' look tame, "said Senator Michael Testa (R-1). "Governor Murphy will cut backroom deals to waste this money in unimaginable ways, all while New Jersey families and seniors suffer and their taxes and tolls continue to rise unnecessarily. In contrast, our Senate Republican plan is completely transparent and would increase public input significantly, while strengthening the state's finances and providing $1,500 of immediate tax relief directly to New Jersey families. There's absolutely nothing in our proposal that any leader of conscience should oppose."
Republican senators called for action on their plans to save New Jersey taxpayers from suffering state income tax increases next year due to inflation after the Treasury Department estimated the cost of "tax bracket creep" at $543 million in FY 2023.
Republican senators called for action on their plans to save New Jersey taxpayers from suffering state income tax increases due to inflation after the Treasury Department estimated the cost of 'tax bracket creep' at $543 million in FY 2023.
"I've been pushing Democrats and the Murphy administration to work with us to index New Jersey's income tax brackets for inflation, just like the federal government and dozens of other states," said Senator Anthony M. Bucco (R-25). "We now know that failure to act will cost New Jersey families more than half-a-billion dollars in income tax increases next year. On top of record-high gas prices and rising costs for groceries, it's yet another expense that people can't afford."
Bucco sponsors legislation, S-676, which would index New Jersey’s gross income tax brackets annually for inflation, as has been done by the federal government for over 40 years and by 37other states.
Under New Jersey's graduated income tax rates, a single worker pays a 3.5% income tax rate to the state on income earned between $35,000 and $40,000. The tax rate jumps to 5.525% for income between $40,000 and $75,000, and then to 6.37% for income above $75,000.
In an NJ.com editorial in December, Bucco explained how tax bracket creep resulting from New Jersey’s static tax rates can leave families poorer from one year to the next when cost-of-living allowances that are intended to cover inflation push workers into a higher tax bracket.
The Murphy administration estimated the cost of failing to address tax bracket creep at $543million in a written response to a question posed by Senator Michael Testa (R-1) during a budget hearing on May 16.
"I'm almost surprised that the Murphy administration admitted that this looming income tax increase on New Jersey families that could result from their inaction is so big," said Testa, a member of the Senate Budget & Appropriations Committee. "When the state has $9 billion in tax overcollections this year sitting in the bank, there's absolutely no reason for anyone to pay higher taxes next year. This is something we can and should fix."
The Republican members of the Senate Budget Committee submitted a comprehensive budget plan on behalf of Senate Republicans that includes indexing tax brackets for inflation as proposed by Senator Bucco.
"What's really shocking is the resistance of Democrats to our efforts to protect struggling families with lower incomes who are most likely to be pushed into higher tax brackets as a result of inflation," said Senator Declan O'Scanlon (R-13), the Republican Budget Officer. "If Governor Murphy wants to keep his no-tax-increase pledge, he needs to work with Republicans to fix this problem before the budget is adopted."
The budget plan proposed by Senate Republicans would provide $8 billion of total tax relief, including ending tax bracket creep and preventing impending toll increases and tax increases the Murphy administration has admitted will be collected this year on employer payrolls, employee paychecks, and health care.
Notification of 24% Premium Increase Follows News that Governor's Office Squashed Attempts to Recover Tens of Millions for Failed Cost-Saving Program from Horizon
Republican leadership in the New Jersey Senate and General Assembly called for the formation of a special legislative committee to investigate massive health care premium increases that will be paid by active and retired public employees and taxpayers.
"Governor Murphy has completely failed to control health care premiums paid by the state, local governments, and active and retired public employees," said Senate Republican Leader Steven Oroho (R-Sussex). "The 24% premium increase proposed for most active employees will take thousands more out of their paychecks annually and lead to huge costs for local governments that will translate into higher property tax bills for struggling families. We must investigate the failures that led to these catastrophic premium increases to develop an effective plan going forward."
Premiums for active employees covered by the State Health Benefits Plan (SHBP) are set to increase by 24%, while those for school employees and teachers covered by the School Employees' Health Benefits Program (SEHBP) are set to rise by 15.6%Similarly, SHBP retirees are set to pay an additional 15.6% for health care, while SEHB retirees will pay 13.6% more.
"Taxpayers, employees and retirees living on fixed incomes cannot afford the anticipated cost in creases for state health benefits on top of what they are paying just to live, eat and work in New Jersey. Much of the blame rests with the Democrats who failed to address the record-high inflation in this year’s massive $50.6 billion spending plan and the Murphy administration for making New Jersey less affordable," said Assembly Republican Leader John DiMaio (RWarren). "It’s time we peel back the onion to find out exactly how we got to where we are with the health care premiums so we can hold those responsible accountable."
The legislators said an investigative committee with subpoena power should be established to investigate the increases, including allegations published by Bloomberg that the Murphy administration squashed an attempt to recover $34 million paid to Horizon for a failed program to lower costs. Outside consultants confirmed that “the program yielded no apparent savings,” also according to Bloomberg.
Horizon administers the health care plans for hundreds of thousands of state and local government employees and retirees in New Jersey.
"It's distressing that the massive health care premium increases are coming on the heels of the shocking report that the Governor’s Office pressured state officials to stop an attempt to claw back tens of millions of dollars from Horizon after they failed to deliver on a contract to lower costs," said Senate Republican Budget Officer Declan O'Scanlon (R-Monmouth). "It's absolutely scandalous that high-level administration officials would intercede to prevent Horizon from being held accountable as premiums are set to skyrocket. Employees, retirees, and taxpayers deserve to know why."
The legislators also pointed to a failed 2020 health benefit reform that Governor Murphy said would lead to massive savings for school districts but has backfired and is driving up costs for many districts and property taxpayers.
These are some of the failures they say a special legislative committee should investigate.
"Raising costs for the hardworking people of New Jersey has been the Murphy administration’s modus operandi. It’s all gimmicks and when it comes time to deliver any real relief, they fail miserably," added Assembly Republican Budget Officer Hal Wirths (R-Sussex). "Now our local governments, seniors, and taxpayers are on the hook for their broken promises to deliver savings and major missteps with Horizon. We can’t and won’t let them get away with it."
Again Call for 'Give It Back' Tax Rebates to Provide $4.5 Billion of Direct, Immediate Relief
The Republican members of the Senate Budget & Appropriations Committee called on Governor Phil Murphy and legislative leaders to commit to expanding tax relief in light of the Administration admitting to a total of more than $9 billion of tax overcollections in the current year and almost $7.8 billion more in revenue available for the upcoming budget year than projected just two months ago.
The Republican members of the Senate Budget Committee called on the Governor and legislative leaders to commit to expanding tax relief in light of the Administration admitting to a total of almost $7.8 billion more in tax revenue available for the upcoming budget year than projected just two months ago.
“The Murphy Administration finally admitted the obvious – that they are collecting $9 billion more out of the pockets of taxpayers than budgeted for the current year,” said Senate Republican Leader Steven Oroho (R-24). “New Jersey families are struggling with soaring prices and inflation, and Republicans have proposed $1,500 rebates to be returned to more than 4 million families this Spring. The Murphy Administration must commit to giving back at least this $1,500 to 4 million families this Spring.”
Senate Republicans have proposed a pair of “Give It Back” tax rebates that would return$1,500 of overcollections to New Jersey families as an added income tax refund returnable this Spring. The rebate would be automatically sent out to every income tax filer without the need for applications, bureaucracy, or delays.
“My Republican colleagues and I can’t support a budget unless 4 million families receive$1,500 of direct relief this spring to help combat the pain caused by over taxation, soaring gas prices, and inflation,” said Senator Declan O'Scanlon (R-13), the Republican Budget Officer.“Since announcing yesterday that there was more than $9 billion of tax overcollections in the current year, all we have heard from the Administration and Democrat leaders is that maybe – if people are good boys and girls – they might return a little more through the Governor’s newly renamed, and woefully inadequate Anchor Rebate Program.”
The main “Give It Back” tax rebate proposed by Senate Republicans would return $1,000 back to New Jersey families as soon as it is enacted.
A second bill, the “Gas Price and Inflation Tax Credit Act,” would provide another $500 tax rebate when this spring to provide families with additional relief to counter record-high gas prices and the highest inflation in four decades.
In contrast to the Republican tax rebates that would provide relief immediately, the underwhelming Anchor program proposed by Governor Murphy would not deliver any relief until May of next year, and to less than half the families provided relief under the “Give it Back proposal.”
Further, the governor’s Anchor proposal would actually reduce rebates for hundreds of thousands of renters and homeowners already receiving rebates from existing programs the Governor has proposed to eliminate.
“It’s staggering that Governor Murphy finally admitted yesterday to taking $9 billion more from taxpayers than budgeted,” said Senator Michael Testa (R-1). “And yet he still has refused to give any of it back – even as his Deputy Treasurer admitted yesterday that the proposed consolidation of existing rebate programs into a newly named Anchor Rebate will actually cut rebates for hundreds of thousands of renters and homeowners.”
In addition to not returning tax overpayments, the Governor’s Administration admitted in budget hearings that they will increase the following taxes this year: income taxes for this calendar year due to unchecked bracket creep; employer payroll taxes beginning July 1; a regressive employee payroll tax increase beginning Jan. 1, toll increases beginning Jan. 1, and a $600million health insurance tax, with a date to be determined. Republicans have also called for these other unnecessary tax increases to be halted.
"It's clear we'll have the resources to provide the immediate tax rebates that we’ve already proposed, and protections against five tax and toll increases the Governor is hell-bent on collecting despite an embarrassing $9 billion over-collection of taxes this year,” Senator Sam Thompson (R-12) concluded. “It’s way past time that tax relief is made a priority -- and not an afterthought with whatever nickels are left over.”
Avoidable Payroll Tax Strikes Employers for $300M
In a state notorious for its worst-in-the-nation business climate, the Murphy Administration timidly unveiled a $300 million tax increase for employers this week, a move Senate Republicans are calling unforgiveable.
Senate Republican Leader Steven Oroho and Senate Republican Budget Officer Declan O’Scanlon criticized Murphy for failing to utilize some of the state’s federal COVID funds to avoid the 20 percent increase.
The escalated rates took effect July 1, but the Department of Labor and Workforce Development failed to provide specifics to businesses until its website was updated this week, more than six weeks later.
“Many New Jersey businesses are still reeling from the effects of the pandemic and Murphy’s mandates,” said Oroho (R-24). “These increases, which will cost job creators anywhere from $40 to $200 per employee, are callous and irresponsible. The Governor had options. The Senate Republicans presented him with solutions, but he just couldn’t resist another tax increase.”
This current increase comes on the heels of a hike last July of more than $250 million. Unless something changes in Trenton, another bump, likely more than $300 million, is scheduled for next year.
“The Governor has been all too comfortable using small business, the job creators our economy depends on, as punching bags,” said O’Scanlon (R-13). “So many businesses in our state continue to struggle through fiscal challenges through no fault of their own, and Trenton clobbers them with another tax increase. And to rub salt in the wounds, it took a month and a half for them to publicly acknowledge the new rates. Companies need adequate time to plan and budget, but the Department of Labor couldn’t even deliver that courtesy.”
The Administration contends the increases are necessary to replenish the Unemployment Insurance fund, depleted by massive statewide layoffs in the peak of the pandemic. For more than a year, months before last year’s increase, the Republican Senators have been calling on Murphy to avoid burdening employers and use some of the federal COVID relief money to restore the UI account.
“Other states have done it to protect their economies, and there’s no reason Murphy hasn’t done the same thing here,” O’Scanlon said. “Two years in a row he has stood his ground and resisted the pleas of the business community, and he has ignored Republican proposals to make New Jersey more affordable and reduce taxes, including this payroll tax debacle.”
Report from NJ Division of Taxation Comes Just Weeks After Gov. Murphy Pledged “Absolutely No New Taxes”
The Republican members of the Senate Budget & Appropriations Committee blasted a new report issued by the New Jersey Division of Taxation that calls for the taxation of cloud computing and software subscription services.
"The latest report from Taxation makes it clear that the Murphy administration is looking at new taxes on many Internet-based services," said Senator Declan O'Scanlon (R-13), the Republican Budget Officer. "So much for Governor Murphy's recent statements that there would be 'no new taxes.' That certainly didn't last long."
During a recent Bloomberg interview following his State of the State address, Governor Murphy said there would be "absolutely no new taxes" this year for New Jerseyans.
"Governor Murphy continues to parse words when he talks about tax increases," said Senate Republican Leader Steven Oroho (R-24). "He might not enact the new taxes on Internet services right away, but he's clearly doing the planning. Maybe it'll be after Election Day, maybe2024, but these new taxes on cloud services are almost certainly on the governor's drawing board."
The proposed tax increases were included in a report issued by the Division of Taxation, "Studying the Impact of Digital Economy."
One section of the report broadly recommends taxing cloud services that "allow a customer to access and use the software of a service provider through the internet."
"Popular cloud services that many people use to back up their phones and computers could end up being taxed," said Senator Michael Testa (R-1). "If you pay for extra storage through services like iCloud, Google One, OneDrive, or Dropbox, get ready to pay more if Murphy's proposed cloud tax is enacted."
Another section of the report notes that Software as a Service (SaaS) is currently not taxed and recommends a tax be considered "in the context of contemporary software practices and the market growth of SaaS."
With most software now distributed online, software subscription services have grown increasingly common. Instead of a one-time purchase, consumers pay a monthly or annual fee in exchange for access to the latest version of a program and product updates.
"'Software as a Service' is what people are paying for when they subscribe to Office 365, Adobe Creative Suite, and other popular software products used on their phones, laptops, and tablets," said Senator Doug Steinhardt (R-23). "Adding new taxes to these increasingly popular software subscriptions is just one more way Governor Murphy will nickel-and-dime New Jerseyans."
The Republican Budget Committee members challenged Governor Murphy to state clearly if the tax increases proposed by his administration's Division of Taxation are in the works.
"New Jerseyans deserve to know if new taxes on cloud services and other digital products will be advanced by the Murphy administration as the Division of Taxation is proposing," added Senator Sam Thompson (R-12). "If Governor Murphy plans on considering or adopting these cloud taxes at any point in the future, even if not this year, he should have the decency to be honest about it."
Say State Unfairly Profits from High Cost of Home Heating
With the cost of heating homes with natural gas up by as much as 25 percent, Senator Joe Pennacchio and Senator Declan O’Scanlon have introduced legislation to prevent state revenue from benefiting at the expense of struggling families.
The Senators introduced legislation (S-3354) this week that would create a winter moratorium on sales tax on natural gas and electricity for residential customers.
“The Board of Public Utilities approved the massive price hike, and the State unfairly profits from the high cost of home heating,” said Pennacchio (R-24). “It is not fair to families who are already struggling in a threatening fiscal environment. We won’t tolerate the State reaping revenue rewards from detrimental price hikes that compound the financial pressures on residents who are already staggering in the face of out-of-control inflation and run-away interest rates.”
New, higher gas rates took effect on Oct. 1, after State regulators granted double-digit hikes for four gas providers serving millions of customers in the state. Almost 2 million customers were impacted when PSE&G, the largest utility in New Jersey, boosted gas rates 25 percent.
Energy costs will also soar for residents serviced by Elizabethtown Gas, New Jersey Natural Gas, and South Jersey Gas.
“Adding sales tax on top of the exploding rates rubs salt in the wounds for state residents who are caught in an economic whirlpool,” said O’Scanlon (R-13). “Families are being hit from all sides, with inflation driving up the cost of food and gasoline, and climbing inter rates impacting the price of housing, automobiles, and credit card purchases. People are desperate for some relief, and this bill is a step in the right direction.”
An article published by Time last month noted that this winter, heating and energy bills will escalate, “fueled by a global energy crisis and the fastest growing inflation in 40 years.”
For families heating with natural gas, the article projects a national increase of up to 34 percent, to an average bill of $952.
Those using electricity could expect a 7 percent increase, with the average cost of the less efficient option climbing to $1,328.
Urges Democrat Legislators to Sign Petition to Force a Special Legislative Session to Prevent Unnecessary Harm to Employers
Senator Declan O’Scanlon (R-Monmouth) warned that the looming payroll tax increase that Governor Phil Murphy will impose in October is the next disaster that will hit New Jersey’s struggling employers.
“While Governor Murphy expressed sympathy for small businesses impacted by recent flooding and storm damage, he still plans on walloping them again next month with a big financial hit they can ill afford,” said O’Scanlon, a member of the Senate Budget & Appropriations Committee. “Unlike Hurricane Ida, the next disaster that will target New Jersey’s struggling employers is completely avoidable and preventable.”
While appearing for a photo op at a tornado-damaged neighborhood on Thursday, Governor Murphy said, “We keep all of the victims, both individuals, families, small businesses on Main Street, in our prayers. Again, we will not relent, we will stand by the sides of everybody who has been impacted by this in New Jersey until we get back on our feet.”
O’Scanlon said the governor’s expressions of sympathy ring hollow when his administration still plans on imposing an unnecessary payroll tax increase in October that could be disastrous for thousands of small businesses across New Jersey.
“Shortly after telling battered business owners they’re in his prayers, Governor Murphy will order them to open their wallets and pay more to the government,” said O’Scanlon. “It’s hypocritical beyond belief, especially when it’s entirely unnecessary.”
The Murphy administration will begin collecting increased payroll taxes from employers starting in October as its preferred solution to replenishing New Jersey’s Unemployment Insurance Fund.
Since March, Senate and Assembly Republicans have advocated for Governor Murphy to accept an alternative plan that would prevent the economic harm, business closures, and job losses that will result from the unnecessary tax increase.
Republicans have proposed stabilizing the UI Fund with billions in federal pandemic relief funds already delivered to the State that have yet to be allocated or utilized, a solution employed by nearly 30 other states that New Jersey could easily adopt.
On Wednesday, Republican legislators circulated a petition (click here to view petition) to their Democrat colleagues that would constitutionally require the governor to call a special session of the Legislature to adopt legislative solutions to prevent the payroll tax increase and restore stability to the state’s Unemployment Insurance (UI) Fund.
“For thousands of employers that barely survived lockdown restrictions, pandemic-related losses, and recent storm and flood damage, the governor’s next hit may be the knockout blow,” added O’Scanlon. “That’s why it’s so important that Republicans and Democrats work together to stop Governor Murphy’s looming business tax increase. If they want to support jobs and businesses in their communities, every Democratic legislator should sign the petition that was delivered to each of their offices to call a special session. It’s the only guaranteed way to stop the next Murphy disaster.”
All 14 Republican members of the Senate and 28 Republican members of the General Assembly have signed the petition.
It would only take the signatures of seven Democrats in the Senate and 13 in the General Assembly to provide the majority needed in each house to force Governor Murphy to call a special session of the Legislature to stop the tax increase.
Senator Declan O'Scanlon said NFL star wide receiver Tyreek Hill perfectly demonstrated New Jersey's tax problem when he explained why he chose to be traded to the Miami Dolphins instead of the New York Jets: "It was very close to happening, but it was just those state taxes, man."
"If a professional athlete like Tyreek Hill is making a major career decision to avoid New Jersey's ludicrously high taxes, you can be sure that financial professionals, entrepreneurs, and other high earners are doing so as well," said O'Scanlon (R-Monmouth), who serves as the Senate Republican Budget Officer. "It's undeniable that our high taxes impact behavior, which costs the New Jersey economy billions in income, countless jobs, lost productivity, and unrealized revenue. For teams like the Jets and Giants and their fans, New Jersey’s uncompetitive tax rates limit their access to the best talent who could save millions by playing almost anywhere else."
For Hill, who signed a four-year, $120 million contract extension, choosing to play in Florida instead of New Jersey likely resulted in state income tax savings of nearly $13 million. "I realized I had to make a grown-up decision," Hill said when speaking to reporters this week about his decision to choose to play in Miami over the Meadowlands as a result of taxes.
Florida has no state income tax while New Jersey's graduated income tax system tops out at a rate of 10.75% for earnings over $1 million.
O'Scanlon noted that families, retirees, young college graduates, and small business owners are all packing the moving vans to escape New Jersey's high taxes, while bigger businesses like Amazon and Google have repeatedly passed over the Garden State when looking to build new headquarters with thousands of high-paying jobs.
"Tyreek Hill scored a touchdown for his finances while Democrats who are driving tax policy in Trenton have repeatedly fumbled the ball," added O'Scanlon. "More and more New Jerseyans are realizing that you don't need to be an NFL superstar to save meaningful amounts of money by moving to a lower-tax state."
Murphy's FY 2024 Budget Proposal Eliminates Energy Aid to Towns
Senator Declan O'Scanlon said Governor Phil Murphy should explain the nearly $70 million cut to municipal aid that appears in his budget proposal for next year, which will drive large property tax increases when paired with soaring health benefit costs for local governments.
"It's surprising that Governor Murphy has proposed cutting municipal aid in his new budget proposal when the State is flush with cash and towns are struggling with inflation and soaring health benefits costs imposed by his administration," said O'Scanlon (R-13), the Senate Republican Budget Officer. "It's shocking that the governor wants to eliminate the return of $70million of Energy Tax Receipts to municipalities that he hailed as important property tax reliefjust last year. Governor Murphy should explain why he thinks it’s a good idea to cut property tax relief to towns and drive tax bills higher for homeowners."
According to The Governor's FY 2024 Budget in Brief (page 10), municipal aid will be reduced next year by $69.1 million, a cut of 4.2%. That reduction, noted in the section labeled "Funding for Property Tax Relief," reflects the reversal of Governor Murphy's commitment to returning Energy Tax Receipts to municipalities.
“Republicans in the Legislature have been fighting for years to end what amounts to theft by the state from local governments and property taxpayers of Energy Tax Receipt funds,” said O’Scanlon. “We thought we made lasting gains last year, but here we are back at square one. It’s unconscionable. That the administration seeks to resume the theft of these funds in a year when the state is drowning in billions in tax overcollections and building a massive surplus tells you just how little they care about New Jersey taxpayers. It is truly astounding!”
O'Scanlon said the reduced municipal aid will be devastating for towns that already are struggling to account for a massive 22.8% increase in health benefits costs for local government employees that was imposed by the Murphy administration last fall.
While the governor's FY 2024 budget proposal includes $200 million to offset the higher health benefit costs, the proposed aid is a fraction of the total increase that's hitting local governments and workers in the form of higher premiums this year.
Further, O'Scanlon noted that the money will not be provided until January of 2024 – if ever –which is too late to help towns protect homeowners from huge property tax increases.
“With the higher benefit costs already hitting municipal budgets and no guaranteed state relief, we're almost certain to see huge increases in property taxes statewide this year,” O’Scanlon said.
NJ.com reported today that the average New Jersey property tax bill hit a record $9,490 in2022. The $206 increase was the highest since Governor Murphy took office.
Despite the bad news for towns overall in the governor’s budget proposal, O'Scanlon said it probably won't be bad for everyone.
Pointing to $12 million in the budget to help Jersey City build a French arts museum, O’Scanlon said it’s already clear the budget will be full of pork spending for a few favored towns with nothing for hundreds of others.
"Just like in years past, we can be certain that a handful of towns with close ties to Democratparty bosses will get special pork grants added into the budget at the last minute to keep themfrom paying more," O'Scanlon added. "It looks like Governor Murphy’s ‘Next New Jersey’really isn't so different from the old one."
NY Assemblyman Dinowitz Outraged NJ Might Refuse to Help Enforce City's Scam Red Light & Speed Camera Tix
Senator Declan O'Scanlon blasted a dimwitted proposal by a New York lawmaker that would charge every New Jersey driver entering New York City a $50 fee as punishment for pending legislation that would prohibit the NJMVC from helping other states enforce automated camera tickets on Garden State motorists.
"New Jersey got rid of our red light camera program because we learned it was a scam that enriched corrupt tech companies at the expense of drivers without improving public safety," said O'Scanlon (R-Monmouth). "Automated red light and speed camera systems are engineered to entrap drivers by shady operators that have been caught bribing politicians all over the country. The only way these systems make money is if proper yellow light and speed setting engineering criteria are ignored. Every competent, unbiased study of these systems demonstrates they have no overall safety benefit -- and that's the only measure that counts. Automated camera enforcement is a policing for profit racket that New Jersey rightfully banned. These camera systems have nothing to do with making roads safer and everything to do with making money. New Jersey doesn’t inflict these scams on our drivers or anyone else's, and we should not be complicit in helping other states to perpetuate their automated injustice on New Jerseyans. The sooner all of these abusive programs end everywhere, the better."
In June, the New Jersey Senate unanimously passed O'Scanlon's "Automated Enforcement Inoculation Act," which would shield New Jersey drivers from predatory fines for traffic violations captured by red light cameras and speed cameras in other states.
Under O'Scanlon's legislation, S-460, the New Jersey Motor Vehicle Commission and other State entities would be prohibited from disclosing the personal information of New Jersey drivers to help another state impose or collect a fine for alleged violations captured by automated camera ticketing systems.
Out of fear that the Empire State might lose a stream of easy camera ticket revenues from out of-state drivers, New York Assemblyman Jeffrey Dinowitz introduced legislation in Albany that would charge New Jersey drivers, and those from other “uncooperative” states, a punitive $50fee every time they enter New York City.
The proposed $50 fee would be in addition to existing bridge and tunnel tolls and a $23congestion pricing toll that New York is considering charging drivers to enter much of lower and midtown Manhattan.
"I won't let a dimwitted New York politician try to extort New Jersey into enforcing a corrupt automated ticket racket that preys on both his constituents and my own. And it should be noted that the folks most devastatingly impacted by these systems are the poor and middle-class workers," added O'Scanlon. "I would warn Assemblyman Dinowitz that this escalating abuse of New Jersey workers by New York will give large employers even more incentive to open satellite offices in the Garden State. You'll lose your precious corrupt ticket revenue and billions more in income tax payments to New Jersey, all while commercial vacancies in Manhattan climb even higher. New York has the most to lose by a long shot."
Senator Declan O'Scanlon highlighted the delayed and failed tax relief in the FY 2023 State Budget that Governor Phil Murphy will sign today, including a payroll tax increase that takes effect tomorrow, ANCHOR rebates that won't be delivered until 2023, and child tax credits that won't help parents until 2024, and tax bracket creep that remains unaddressed.
"The delayed and failed tax relief efforts in the Democrats' budget when the state is ridiculously flush with funds will go down as one of the biggest missed opportunities in New Jersey history," said O'Scanlon (R-13), the Republican Budget Officer. "Sadly, Democrats opted for huge increases in pork spending and the establishment of massive slush funds that will do nothing to help New Jersey families suffering today from high gas prices, soaring inflation, and property taxes."
O'Scanlon pointed to four specific tax relief failures in the Democrats' budget:
-Democrats failed to stop a $300 million payroll tax increase on employers that will take effect tomorrow, July 1. A convoluted plan proposed by Democrats to provide a tax credit to employers at some point in the future for some of the increased payroll taxes they will pay starting tomorrow did not advance. In contrast, the Senate Republican budget plan would have replenished the UI Fund directly using a portion of remaining federal relief funds to prevent the tax increase from taking effect. Republicans have proposed this several times, including last spring, last fall, and again during the current budget process.
-Democrats failed to provide immediate tax relief to families. Their ANCHOR rebate plan, which only includes $1.5 billion of new funding, will not deliver any relief to taxpayers until spring of 2023 at the earliest. Under ANCHOR, renters will only get a fraction of the maximum rebate, with some actually getting less than they received this year under the Homestead Benefit that's being eliminated. In contrast, the "Give It Back" rebates proposed by Republicans would have provided $4.5 billion of rebates to 4 million households immediately. Unlike the ANCHOR plan, renters would not be treated differently under "Give It Back," and most New Jersey families would qualify for the full$1,500 proposed by Republicans.
-Democrats failed to deliver timely relief to parents through their new Child Tax Credit programs, which won't provide any help to low- and middle-income families until 2024.Since the legislation says the income tax credit doesn't apply to tax years before 2023,New Jersey parents won't receive the income tax credit until they file their 2023 tax returns in the spring of 2024. Families would need to make less than $30,000 to get the maximum $500 credit, while nobody with income over $80,000 would qualify. Again, the "Give It Back" rebates proposed by Republicans would provide $1,500 in immediate payments to most New Jersey families.
-Democrats failed to address "tax bracket creep" that the Murphy administration admitted will cost New Jersey income taxpayers an additional $543 million next year as they are pushed into higher income tax brackets by inflation. The comprehensive budget plan proposed by Senate Republicans called for indexing New Jersey's income tax brackets for inflation as is done by the federal government and dozens of other states to prevent this massive tax increase.
"Democrats aren't being honest with New Jerseyans who haven't been told that the tax reliefthey've been promised could be years down the line," added O'Scanlon. "That stands in starkcontrast to the $8 billion of tax relief proposed by Senate Republicans that would stop loomingtax and toll increases and give back $1,500 immediately to families that were overtaxed over thepast year."
Paired with outdated covid mandates leads to larger concerns
Following news that Rutgers University football players racked up more than $450,000 in DoorDash orders paid for with taxpayer funds since May of last year, Senator Declan O’Scanlon (R-Monmouth) called for an investigation into the program.
“We saw two stories in two days depicting what amounts to indictments of flagrant incompetence on the part of those charged with overseeing this university,” said O’Scanlon. “Itis absolutely mind-blowing that this was allowed to happen without the notice of someone overseeing the accumulating invoices. The person responsible for that lack of oversight needs to be held accountable. Between financial scandals and completely ignoring the newest CDC guidance on outrageous masking mandates, vaccination, and testing policies—and virtually the rest of the science-following-world’s long overdue removal of those mandates—it paints a concerning picture to taxpayers. And to anyone who had faith in those running the institution."
O’Scanlon has been a vocal opponent of continued, outdated masking, vaccination, and testing mandates for the last two years and has called out Rutgers before regarding their ongoing, long outdated and disproven covid-zero protocols.
“We’ve spoken to the university over the last few months on the testing requirements for indoor events, swimming events, and the overall mandates in all departments,” O’Scanlon continued. “Our state institutions of higher education should be striving to lead the way on covid protocols, but instead they’re lagging behind the rest of the world—including an absurd masking policy which calls for masks in classrooms and libraries…but nowhere else. Those in charge of inflicting these policies should be ashamed. They are insisting on boosters for students who may have had a negative vaccine reaction—or who just had covid recently and are protected by antibodies. We have heard some truly tragic circumstances occur with students due to these illogical mandates."
Rutgers Athletics also accumulated a $73M deficit in 2021 and has been the focus of dozens of news stories in the last few years regarding misuse, mismanagement, and excessive spending. They’ve since defended the $450,000 DoorDash bill stating that many student-athletes come from economically disadvantaged circumstances and they needed to look out for their welfare during covid.
“Defending the high cost and purchases because it was for student welfare isn’t an acceptable defense. It’s a nonsensical attempt to justify this mess. Sorry, it doesn't fly. The problem isn’t that the university provided the option to student athletes to meet their nutritional and welfare needs during the pandemic. The problem is that apparently no one was paying attention to the invoices and spending to catch blatant misuse—which is a larger recurring issue.”
“It was only a little over a month ago that we saw other articles exposing Rutgers athletics' misuse of Rutgers credit cards. Almost $10M on insanely inappropriate lavish charges with—again—seemingly no oversight. Meanwhile Democrats saw fit to hand them $100M for an indoor practice facility this past June in a budget deal. This type of behavior is completely unacceptable and an investigation should be launched immediately. The residents of New Jersey deserve accountability, both from the people guilty of these decisions and actions, and from those covering for them. We must be better than this.”
Bill Would Allow Deduction of All Property Taxes Paid from State Income Tax
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would provide relief for New Jersey’s over-burdened property taxpayers.
Senator Declan O’Scanlon and Senator Joe Pennacchio re-introduced legislation that would eliminate the current $15,000 cap and allow taxpayers to deduct the entire amount of property taxes paid on their income tax.
The bill, S-2279, would allow taxpayers to deduct from state income tax the entire amount of property taxes paid on their principal residence, eliminating the current $15,000 cap.
“When New Jersey residents complain about the state being too expensive, they are often referring to our exorbitant property taxes,” said Senator O’Scanlon (R-13). “There are plenty of other taxes adding to the burden on taxpayers, but it is property taxes, the No. 1 highest property taxes in the nation, that pack the strongest punch. There’s absolutely no justification for stopping families from deducting every last cent from their income taxes.
“There has been a rallying cry in Washington to reinstate the federal cap on the SALT (state and local tax) deduction, yet New Jersey continues to cap what homeowners can deduct on an unfair and burdensome tax,” O’Scanlon added.
A national study conducted by WalletHub last year revealed that the property taxes on a median value home in New Jersey were $2,500 more than the next highest state.
In 20 years, the average property tax bill in the state has almost doubled, from $4,972 in 2002to $9,284 in 2021.
“For property owners who pay in excess of $15,000 each year, the cap has the effect of a taxon a tax,” said Senator Pennacchio, who sponsored legislation signed into law in 2018 raising the cap from $10,000 to its current level. “They pay their property taxes, then they have to turnaround and pay income tax on the same money. Enough already.
“People need a break. In this state, especially under this Governor, residents are constantly being bombarded with new taxes or new ways for the government to grab their hard-earned money,” Pennacchio continued. “Eliminating the cap will provide some rare relief come tax time each spring.”
Under the O’Scanlon/Pennacchio bill, the cap for renters, who can deduct “rent constituting property tax” of 18 percent of rent paid, would also be uncapped.
Senator O’Scanlon and Republican Colleagues’ Plan to Restore Unemployment Fund with Federal ARP Money Would Spare Businesses and Save Jobs
As early as April of this year, Senator Declan O’Scanlon and Republican members of the Senate Budget & Appropriations Committee proposed using federal American Rescue Plan Act money to stabilize the Unemployment Insurance Fund and avoid massive tax increases on employers in the state.
The fund had been drained by a record number of benefit claims during the pandemic and lockdowns mandated by the Governor as more than 2 million residents received benefits.
On Friday, the Murphy Administration’s insistence to fill the void through higher taxes became official.
“From the comfort of his multi-million-dollar Italian villa, Governor Murphy signed off on an avoidable and enormous increase that will be unsustainable for many employers who barely survived Murphy’s forced closings and lockdowns,” said O’Scanlon (R-13). “I have to assume the Governor himself knew there was no way to defend this job-killing tax when federal funds could have avoided it, and that’s why he waited until he was on the other side of the globe to leak this out in a late Friday news dump.
“Even the way this disastrous scheme was rolled out was cowardly – a cryptic edit on the Department of Labor and Workforce Development web site announcing new employer rates. Gutless.”
The increase for employers and some nonprofits and local governmental bodies will be close to 20 percent, and it is scheduled to go into effect on October 1.
“What really pisses me off is this was completely avoidable. The state is sitting on a huge pile of federal money and Murphy should use that to bolster the U.I. Fund, just as the Senate Republicans have been saying since the moment federal funds became available,” O’Scanlon said.
“Finally, we are seeing some Democrat legislators warming up to the idea and supporting the use of federal money to save jobs. Murphy’s increase won’t hit until October, so he still has time to spare employers the unnecessary burden of a $252 million tax hit. He should think about that while he’s chilling in Europe.”
The tax increase comes at a time when the State unemployment rate is 7.3 percent. Only five states have a higher percentage of residents out of work.
“We know Goldman Sachs people are always trying to be the biggest, but bigger is not better when it comes to unemployment,” O’Scanlon said. “Jacking up employer taxes will only add to our number of out-of-work residents.
“We’re in this spot because the Governor ignored Republicans as he has since Day One. Maybe now that there is bipartisan support he will listen,” O’Scanlon said. “Murphy’s COVID mandates put thousands of small employers and mom-and-pop stores out of business, with some sectors losing close to 40 percent. If Murphy’s intent was to kill off even more job-creators, this is the way to do it.
“My colleagues and I are ready to come to Trenton and pass legislation to force the Governor to do the right thing and stop this tax from going into effect. Unless Democrats are just blowing smoke, they will do exactly that,” O’Scanlon noted.
O'Scanlon's Amendment Tabled by Democratic Majority in Senate Budget & Appropriations Committee
Democrats in the Senate Budget & Appropriations Committee voted against $8 billion of tax relief proposed by Senate Republicans to help New Jersey families and small businesses struggling with high gas prices, inflation, and property taxes.
"Democrats have offered shockingly little tax relief in their budget proposal despite the Murphy administration having $9 billion in tax overcollections and another $3 billion in federal pandemic relief funds sitting in the bank," said O'Scanlon (R-13), the Senate Republican Budget Officer. "We gave them an easy opportunity to support the $8 billion of tax relief that Senate Republicans proposed, but they refused yet again to help struggling families across New Jersey. Their resistance to giving money back to taxpayers immediately as we proposed is absolutely mystifying."
O'Scanlon offered the Senate Republican tax relief plan as an amendment to S-2914, a Democrat bill that would create a ten-day sales tax holiday for school supplies, such as pens and pencils, notebooks, and binders.
The amendment, which was immediately tabled by the Democratic Majority on the Budget Committee, would have incorporated the $8 billion of tax relief previously proposed as part of the comprehensive Senate Republican budget plan into the Democrat legislation.
The $8 billion of increased tax relief that Senate Democrats voted against today includes:
-$4.5 billion through a pair of “Give It Back” tax rebates (S-2243 and S-2290) totaling$1,500 for millions of families;
-$1 billion of property tax relief by reversing Governor Murphy’s proposed cuts to municipal aid and school aid, fully funding extraordinary special education, increasing the veterans property tax deduction, and more;
-$790 million in structural tax reductions, including raising the retiree income exclusion to$250,000, creating a deduction for charitable contributions, and eliminating the CBT surcharge early; and
-$2 billion to halt planned tax and toll increases by indexing state income tax brackets for inflation, replenishing the Unemployment Insurance Fund to prevent upcoming employer/employee payroll tax increases, stopping automatic toll increases on January1, and rescinding a major tax increase on the state’s largest health insurer and its customers.
"Governor Murphy and legislative Democrats want to give New Jersey taxpayers scraps, not thereal tax relief they need to get through this difficult time,” said Senate Republican LeaderSteven Oroho (R-24). “While Senate Republicans have proposed a plan to give back billions toNew Jersey taxpayers, our colleagues on the other side of the aisle remain focused on addingbillions in pork spending."
