Category Archives: blog

As A Matter Of Fact…Reality Check: Income Taxes Don’t Impede Economic Growth

by Jon Whiten | Published in NJPP Blog: As a Matter of Fact …

As Gov. Chris Christie prepares to unveil the specifics of his proposed 10-percent income tax cut at next week’s budget address, he’s working under a key tenet of conservative economics: that high tax rates harm economic growth.

There’s just one problem, according to a new national report by the Institute on Taxation and Economic Policy (ITEP): that tenet doesn’t match up with reality.

These claims are based largely on misleading analyses generated by Arthur Laffer, long-time spokesman of a supply-side economic theory that President George H. W. Bush once called “voodoo economics” because of its bizarre insistence that tax cuts very often lead to higher revenues. Recently, Laffer’s consulting firm has been very successful (with the help of the American Legislative Exchange Council, Americans for Prosperity, and the Wall Street Journal’s editorial page) in spreading the talking point that the nine states without personal income taxes have economies that far outperform those in the nine states with the highest top tax rates.

In reality, however, residents of “high rate” income tax states are actually experiencing economic conditions at least as good, if not better, than those living in states lacking a personal income tax.

The report pits the nine “high rate” states identified by Laffer (a list that includes New Jersey) against the nine states that don’t have a broad-based personal income tax in three categories: growth per capita, median family income and unemployment rate.

From 2001 to 2010, the “high rate” states have seen stronger growth per capita and less erosion of median family income, while the average unemployment rate has been the same as the un-taxed states.

The bottom line, according to ITEP?

“There is no reason for states to expect that reducing or repealing their income taxes will improve the performance of their economies.”

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Filed under As a Matter of Fact, blog, Gov. Chris Christie, income taxes, Institute on Taxation and Economic Policy (ITEP), New Jersey Policy Perspective

As A Matter Of Fact…Business Leaders Agree: Raising the Minimum Wage Makes Sense

by Jon Whiten
Published in NJPP Blog: As a Matter of Fact …

While legislative leaders’ efforts to raise New Jersey’s minimum wage to $8.50 an hour have taken a backseat in recent weeks to the governor’s proposed income tax cut, similar legislation in New York is gaining the backing of some high-profile business advocates.

First up was a Daily News op-ed co-authored by New York City’s billionaire mayor Michael Bloomberg that used free-market ideology to argue for bolstering the minimum wage.

“[The minimum wage] helps taxpayers by reducing the number of people who might otherwise have to rely on public assistance to survive,” Bloomberg and state Assembly Speaker Sheldon Silver wrote. “Taxpayers benefit when government dependency is low – and so does the economy.”

The Daily News piece was followed a few days later by an editorial in business bible Crain’s that called for the minimum wage to be raised to $8.50 an hour and tied to inflation going forward. Crain’s said opponents’ arguments that a wage increase will destroy low-paid jobs just aren’t true; it pointed to New York’s 2004 raising of the wage as an example.

“If the change had a cataclysmic effect on businesses that depend heavily on minimum-wage workers, we certainly missed it,” the paper wrote. “Neither, quite obviously, did it shower undeserved riches on the bottom rung of workers.”

If and when the minimum wage bill here in New Jersey starts to pick up steam again, we can only hope some of the state’s leading voices for business will, like Bloomberg and Crain’s, avoid a knee-jerk dismissal of the proposal, and look instead at how it will help our entire economy to flourish.

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Filed under As a Matter of Fact, blog, Michael Bloomberg, minimum wage, New Jersey, New Jersey Policy Perspective, NY Daily News, taxpayers

As A Matter Of Fact ….What Do Taxes Pay For? A Better Quality of Life for Our Children

January 25th, 2012, by Jon Whiten Published in NJPP Blog: As a Matter of Fact …


While it’s a well-worn cliché that “nobody likes to pay taxes,” one question isn’t asked often enough: what do those taxes pay for?

According to a new national study, they pay for a higher quality of life for our children.

Investing in Public Programs Matters: How State Policies Impact Children’s Lives, released last week by the Foundation for Child Development (FCD), finds “a strong relationship” between state tax rates and the overall quality of life for children.

The report’s key findings are that “higher state taxes are better for children,” and that “greater investments in government programs are strongly related to better quality-of-life for children in a state.”

The report, along with the annual KIDS COUNT data book that ranks New Jersey fifth — comes as states around the country, including New Jersey, are reacting to fiscal crises with austere, cuts-only spending plan, and it shows the folly of such an approach.

“Although states are currently revenue-starved, this is exactly the wrong time to reduce taxes,” says FCD president Rudy Takanishi. “The revenues generated by taxes should be used to invest more in the education and health of our children. Policymakers must recognize that the cost of shortchanging children today is too high a price to pay in the future.”

There’s good news here for New Jersey: the Garden State ranked first in the nation on the Child Well-Being Index, barely edging out Massachusetts. This finding, based on 2007 data, reaffirms the need to resist further cuts to education and other crucial public programs.

The stakes — our children’s well-being, and our state’s future prosperity – couldn’t be higher.

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Filed under As a Matter of Fact, blog, Child Well-Being Index, education cuts, Foundation for Child Development (FCD), Kids Count, New Jersey Policy Perspective, quality of life, tax cuts, Taxes

Quote Of The Day #2: “You can say it’s political…”

Our second quote of the day comes from newly reappointed Middletown Mayor Tony Fiore, from statements made to reporter Kevin Penton in todays Asbury Park Press concerning the appointments of members to (or lack thereof) the Middletown Human Rights Commission and its former Chairperson Carolyn Scwhebel.

“You can say it’s political, you can say it’s personal choice,” Fiore said. “She doesn’t work well with the town.”

Mrs. Scwhebel recently sent a letter to the editor, Middletown Human Rights Commission Being Abolished by Attrition, to local publication (this blog included) that expressed her concerns at not being reappointed to the commission.

And when you consider what went on during the last Township Committee meeting of 2011 back on Dec.19th, Fiore’s comments only reinforce what I wrote about in the post Political Affiliations Over Participation Matter More When It Comes To Board Appointments, when discussing an appointment to the Middletown Library Board (listen to the audio).

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Filed under Asbury Park Press, blog, Board of Trustees, Carolyn Schwebel, kevin penton, Middletown Human Rights Commission, Middletown Library, Quote of the day, Tony Fiore

Vote On Delaware River Basin Fracking Ban Postponed

Readers of this blog know my stance on the hydraulic fracturing(fracking) shale in order to release natural gas deposits that were unattainable before the process was developed, I have posted about its potential harm to our enviroment and drinking water supplies numerous times in the past which you can read HereHere and Here .

Until it can be proven beyond a reasonable doubt that the process is not harmful to the environment or to our drinking water supplies the practice of fracking should be haulted. Fresh clean, drinkable water is becoming scarce and harder to find, thus it is becoming a precious commodity that shouldn’t be messed with.

So the vote yesterday morning to postponing the upcoming Monday mornings vote to approve the process in and along the Delaware River Basin (a key fresh water source for residents of New Jersey, Pennsylvania, New York and Delaware) is welcomed news.

Accoding to the Star-Ledger environmental groups are pleased with this postponment:

Environmentalists greeted the vote postponement as a major victory, and for grassroots activism. Maya van Rossum, the Delaware Riverkeeper, said the anti-fracking contingent would still be demonstrating in Trenton on Monday morning as previously planned, despite the cancellation.

“There’s still going to be a showing — to send a message, largely,” she said.

“As long as there is a delay, we can continue working toward getting a permanent ban on fracking in the Delaware basin,” added Jeff Tittel, executive director of the Sierra Club’s New Jersey chapter. “We need to keep the pressure up on Governor Christie and the Obama administration to stop these weak rules from moving forward.”

You can read the more about the postponement …. Here

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Filed under blog, Delaware River Basin Commission, Delaware Riverkeeper, Fracking, hydrofracking, Jeff Tittle, Sierra club

As A Matter Of Fact…New Jersey Offers Goya $80 Million to Create Nine New Jobs




October 24th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Imagine you are a New Jersey job seeker (one of 418,000 unemployed in the state as of September, 2011, according to the state Department of Labor and Workforce Development) and you read in the news that a firm will be getting a state subsidy to hire 175 new workers. You would be thrilled to see those new job opportunities in the state, right?

But, in the case of Goya Foods, Inc., only nine truly new jobs are being created.

Nine.

Of the other 166 “new” workers, 66 would be moved from Goya’s location in Bethpage, New York and 100 already work for Goya as contractors based in Secaucus, according to documents from the state Economic Development Authority (EDA). So these “new” workers are actually existing employees.

Those 100 current contractors may be counted as new workers because they will be converted to direct payroll employees or become part of a professional employer organization (PEO). The National Association of Professional Employer Organizations describes PEOs as enabling “clients to cost-effectively outsource the management of human resources, employment benefits, payroll and workers’ compensation.” Counting current workers as new workers might be technically correct under the subsidy law — but it just doesn’t make sense.

The state’s tax subsidy for these nine new workers is being offered under the newly revised Urban Transit Hub Tax Credit (UTHTC) statute. It is intended to provide an incentive to a firm by lowering its state corporate business tax obligation so that a company will make capital investments in buildings in urban areas near transit and create jobs.

Earlier this month, the EDA approved the $80 million-plus UTHTC for Goya Foods. The company would get that tax credit for building a new 600,000 square foot headquarters/distribution center in Jersey City, a half-mile from the Jersey City PATH station. Aside from the 175 “new” workers, 316 current Goya workers would move to the new facility from Secaucus. Goya’s current headquarters in Secaucus would be converted to a manufacturing facility and 53 jobs would be moved there from elsewhere in Secaucus, but would not be part of the $80 million subsidy.

Further, Goya is to benefit from the expansion of one of the state’s Urban Enterprise Zones to include the part of Jersey City where Goya plans to relocate, according to the Jersey Journal. Urban Enterprise Zones offer companies a host of tax benefits. The company is also seeking a 20-year property tax abatement for its new headquarters/distribution facility in Jersey City, which would lower the firm’s property tax bills; the Jersey City Council will vote to introduce the measure this week, with final approval to possibly come in the second week of November.

But that all may not be enough to keep Goya in New Jersey, according to EDA documents.

New Jersey is competing with New York state, because Goya is also considering moving North Jersey workers to an 892,943 square foot site in Suffern, New York, in Rockland County. No public information was provided by the EDA about the subsidies that may have been offered by the state of New York to woo Goya.

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Filed under As a Matter of Fact, blog, Economic Development Authority, Goya Foods, Jersey City NJ, New Jersey Department of Labor and Workforce Development, New Jersey Policy Perspective, tax abatements

As A Matter Of Fact…The importance of Social Security


September 22nd, 2011 | Published in NJPP Blog: As a Matter of Fact

By Mary Forsberg

Social Security is an American mainstay, as much a part of our culture as baseball, hot dogs and apple pie. Established in 1935, it now provides benefits to over 50 million people, about one in every six U. S. citizens. While three-quarters of those receiving benefits are retirees or elderly widow(er)s, 19 percent receive disability insurance payments and 4 percent receive benefits as minor children of parents who have died.

Social Security provides a guaranteed, progressive benefit that keeps with increases in the cost of living. By dollars paid, the U. S. Social Security program is said to be the largest government program in the world. It provides a foundation of retirement protection for nearly every American and its benefits are not means-tested. The near universal participation and the absence of means-testing make Social Security much less expensive (its administrative costs amount to just 0.9 percent of annual benefits) to administer than private retirement annuities.

Debate in Washington about how to reduce the growing federal deficit often turns to reducing social security eligibility and /or benefits. A recent report from Social Security Works and the Strengthen Social Security campaign supports the importance of Social Security to families, communities and state and local economies.

Did you know in New Jersey:

• Social Security provides benefits to more than 1.4 million people.
• Residents receive Social Security benefits totaling nearly $20 million a year
• The median benefit received by a retired worker is about $15,500 a year.
• Social Security is the most important source of income for the 171,400 children living in “grandfamilies,” households headed by a grandparent or other relative.
• Social Security provides valuable disability and life insurance protection for most workers. Nationwide, an estimated 3 of 10 working-aged men and 1 of 4 working-aged women will become severely disabled before reaching retirement age.
• A 30-year-old-worker who earns about $30,000 a year and has a spouse and two young children, receives Social Security insurance protection equal to private disability and life insurance policies worth $465,000 and $476,000 respectively.

Social security has been one of the most important public programs for working family in America since the great depression and clearly provides a measure of security for the elderly, the orphaned and the disabled.

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Filed under As a Matter of Fact, blog, New Jersey Policy Perspective, Social Security