NJ Shutdown Derailed; Breakdown On Track

In announcing a deal on the New Jersey FY19 budget Governor Phil Murphy commented on one of the taxes being increased or created for this budget:

Mr. Murphy said the four-year surcharge would tide the state over until economic growth generates more revenue.

“This economy has been flat as a pancake,” he said. “We need time to get there. We can’t get there overnight.”

That “economic growth” pipe dream was the mantra of former governor Chris Christie and several of his predecessors (most notably Christie Whitman) but with one fairly important variation.

Chrstie and Whitman were expecting economic growth from lower taxes (that often came by shorting pension contributions). Where is the economic research on higher taxes generating economic growth?

Here are just a few of the new laws passed today that  would raise taxes and debt (all the bills are listed at the bottom of this blog for your review – I may have missed some other new taxes or debt that were snuck in):

A4202 Imposes surtax on corporation business tax liability; decouples certain provisions from Internal Revenue Code; imposes tax on certain dividends.
Passed both Houses In addition to the tax paid by each taxpayer determined pursuant to section 5 of P.L.1945, c.1628(C.54:10A-5), each taxpayer, except for a public utility, shall be assessed and shall pay a surtax as follows: (1) For a taxpayer, except a public utility, that has entire net income in excess of $1 million, but less than $25 million for the privilege period, the surtax imposed shall be 2.5%; (2) For a taxpayer, except a public utility, that has entire net income in excess of $25 million for the privilege period, the surtax imposed shall be 4%. (page 2)

A1753 AcaSa (2R) Imposes State sales and use tax and hotel and motel occupancy fee on transient accommodations; authorizes various municipal taxes and fees on transient accommodations.
Passed both Houses The rate thereof shall be $2 per day for each occupied room in the case of any hotels in the eligible municipality which provide casino gaming, and $1 per day for each occupied room in the case of the other hotels or transient accommodations in the eligible municipality. (page 16)

A3088 Acs w/GR (ACS/1R) Increases New Jersey Earned Income Tax Credit; provides credit for child or dependent care expenses; taxes”investment management services.” *
2nd Reading in the Senate to Concur with Gov/Recommendations there shall be imposed an additional surtax of 17 percent on income from investment management services received during the taxpayer’s taxable year. (page 10)

A4061 Acs w/GR (ACS/1R) Imposes surcharge on prearranged rides and increases certain fee associated with motor vehicle violations.**
2nd Reading in the Senate to Concur with Gov/Recommendations There is imposed on a transportation network company rider a surcharge of $0.30 upon every prearranged ride that originates and terminates within the State, except that only a $0.15 surcharge is imposed on the rider of a shared ride; provided, however, that no surcharge shall be imposed on a ride that originates and ends in a county with a population of fewer than 200,000 people, according to the latest federal decennial census. (page 2)

A4261 Aa (1R) Provides for collection of sales tax from certain remote sellers.
Passed both Houses

Then there is the billion dollars in new borrowing:

S2293 SaSaAca (3R) “Securing Our Children’s Future Bond Act”; authorizes issuance of $1,000,000,000 in general obligation bonds to finance certain school, school district, and county college capital projects; appropriates $5,000.***
Passed both Houses

 Senate
    Sunday, July 01, 2018 – 8:00 AM
    Senate Chambers
Voting Session:  

Bill Abstract   Current Status LDOA  

A1100 Common Sense Shared Svcs Pilot Prog Act 2RS 6/25/2018
A1753 Hotel occupancy fee-impose sales tax PBH 6/30/2018
A2401 Delta Sigma Theta lic. plate-Auth PBH 7/1/2018
A2747 Continuing care communities-concerns PBH 7/1/2018
A3088 Earned Income Tax Cred.-incr. 2RSG 7/1/2018
A3438 St. tax amnesty prog.-concerns 2RSG 7/1/2018
A3683 Healthcare worker-auth parking privilege PBH 6/30/2018
A3754 Hair braiding estab.-lic. exemp. PBH 7/1/2018
A3888 Alco. bev. lic.-allows issuance PBH 6/30/2018
A4061 Transp. svcs., cert.-impose fee 2RSG 7/1/2018
A4202 Corp. bus. tax liab.-impose surtax PBH 6/21/2018
A4259 Tickets-restructure sales law PBH 6/30/2018
A4261 St sales and use tax-concerns collection PBH 7/1/2018
ACR182 Camden Co.-approve hist. preserv. proj. 2RS 6/29/2018
AJR137 Smart Irrigation Mo.-desig. July PBH 7/1/2018
S542 High Point St. Park-desig. Vet. St. Park PS 7/1/2018
S731 Low-speed elec bicycle-permits operation PS 7/1/2018
S749 Transient accommodation fee-impose tax SUB 7/1/2018
S786 Unitary bus groups-file combined bus tax 2RS 1/9/2018
S822 Multiple rental unit owners-insur policy PS 7/1/2018
S1305 Vet preference, civil svc hiring-concern PS 7/1/2018
S1532 Continuing care communities-concerns SUB 7/1/2018
S1586 Common Sense Shared Svcs Pilot Prog Act 2RS 6/25/2018
S1612 Nursing home-estab aide-to-resid ratio PS 7/1/2018
S1860 Animal rescued from mv-immunity PS 7/1/2018
S1963 Asset forfeiture reporting-estab. PS 7/1/2018
S2293 Securing Our Children’s Future Bond Act PBH 7/1/2018
S2416 Healthcare worker-auth parking privilege SUB 7/1/2018
S2447 Securing Electronic Records Vet Ease Act PS 7/1/2018
S2456 Sch. safety specialist-desig. PS 7/1/2018
S2498 Alco. bev. lic.-allows issuance SUB 7/1/2018
S2510 Hair braiding estab.-lic. exemp. SUB 7/1/2018
S2618 Delta Sigma Theta lic. plate-Auth SUB 7/1/2018
S2740 Recalls used/new mv-notify buyers PS 7/1/2018
S2783 Tickets-restructure sales law SUB 7/1/2018
S2794 St sales and use tax-concerns collection SUB 7/1/2018
S2824 St. approp. act FY2019-amends 2RSC 7/1/2018
SCR129 Camden Co.-approve hist. preserv. proj. 2RS 6/27/2018
SJR91 Smart Irrigation Mo.-desig. July SUB 7/1/2018
SR90 Fed assist.-oppose raising cert. rents FILE 7/1/2018

23 responses to this post.

  1. Posted by PS Drone on July 1, 2018 at 6:12 pm

    I know, I know, this is New Jersey. But I was ruminating to myself recently that even though my rational, semi-intelligent self knows that idiots like Murphy get elected by promising the unaffordable to assorted union scumbags, I continue to be depressed with the fact that we can never elect adults to run (as DJT would put it) this shithole state. All except those with their hands perpetually “out” know that all governing priorities in this state should be to eliminate programs, shed public sector employees and pay down our enormous debt. What is it about the voters in this state that cannot deal with reality? Knowing we are broke and getting more broke by the day, they keep listening to morons who promise them more programs and more regulations claiming that life in NJ will improve as a result. I guess it is either move out or contemplate suicide.

    Reply

    • Posted by El gaupo on July 1, 2018 at 7:33 pm

      My advise would be to move out over the other option you listed. Let’s face it….almost anyone that was running could have beaten Guadagno. The 16% approval rating meant that 84% was done with Christie and no way were they gonna elect his Lt gov. No chance of that!!!
      I think that the fact that you haven’t moved out of N.J. yet, to me means that you are doing fine and just don’t like paying high taxes( who does) or your kids are still in public school. Either way, you are probably making more dough than you would in one of the Trump states that you think have it going on. But what do I know, in your eyes I’m just a “union scumbag”. Not a father, husband, neighbor, rec league coach, tax paying citizen and cop who realizes that while I’ll never be able to make things great for all of the people all of the time, maybe I can make life a little better for some of the people some of the time.

      Reply

      • Posted by PS Drone on July 1, 2018 at 7:47 pm

        I don’t recall Murphy making any promises to LEO. I was thinking more NJEA and AFSCME, both of which should be made illegal. Reference FDR.

        Reply

        • Posted by El gaupo on July 1, 2018 at 7:55 pm

          I agree the NJeA is there own worst enemy a lot of the time. They really do not come off as sympathetic types. Most of the rank and file teachers are pretty decent human beings though.
          The only thing murphy did do for us was to not renew the arbitration cap. He also agreed to the pension bill. He did have the support of the pba for obvious reasons. Guadagno, like her former boss, was no friend of LEO. Despite her boss saying at the RNC that he “had our backs”. Lol.
          Listen, without me on this blog(and earth) it would just be a bitch session. No different than a Njea meeting. All one sided.

          Reply

          • Posted by El gaupo on July 1, 2018 at 7:57 pm

            Btw with Murphy social policies a turn off to most cops, it really shows how much Christie was against them. Most cops always were Always in the GOP corner. Myself included. The njsp could not stand the fucking guy.

  2. Posted by geo8rge on July 2, 2018 at 7:57 am

    If I understand this right, if you have in excess of $1M of income you have to pay a 9% tax on dividends. In addition to making the NJ state tax less synchronized with federal taxes, if you get all your ill gotten gains of $1M or more, you will pay a special 9% tax. I did not read the whole thing. But it looks like the millionaire’s tax is there. They seem to be targeting S corporations as a tax dodge by declaring ‘earned’ income as dividend income.

    https://legiscan.com/NJ/bill/A4202/2018

    For tax years beginning on or after January 1, 2017 and ending before December 31, 2018, in addition to the tax paid by a taxpayer pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), a taxpayer shall pay a tax equal to a rate of 9% applied to all of the taxpayer’s dividends included in the taxpayer’s income for federal income tax purposes pursuant to the Internal Revenue Code without any deduction, exemption, or credit allowed under the Internal Revenue Code or any credits, grants, or net operating losses allowed under the laws of the State of New Jersey

    c. A taxpayer shall not be liable for the tax imposed by this section, if so prohibited by any federal law, or if the total amount of dividends which were included in computing such taxable income for federal income tax purposes, paid to the taxpayer by one or more subsidiaries owned by the taxpayer, are in aggregate less than $1,000,000 for the tax year.

    Reply

  3. Murphy should have taken my advice. His unwillingness to face up to what his generation has done has meant they are going to keep doing it.

    https://larrylittlefield.wordpress.com/2017/12/03/will-new-jerseys-phil-murphy-be-the-first-to-tell-the-truth-about-generation-greed/

    “This economy has been flat as a pancake,” he said. “We need time to get there. We can’t get there overnight.”

    Sacrifices will be made. After the last of Generation Greed has sold their homes to suckers and retired to Florida. Don’t but them, unless their cost is 15 percent of your income or less, to make up for what they have done to you.

    https://larrylittlefield.wordpress.com/2017/12/09/fannies-mae-and-freddie-macs-stealth-economic-war-on-the-millennials/

    Reply

    • Posted by dentss dunnigan on July 2, 2018 at 10:56 am

      Interesting thought but I realized once you used property tax @ 6K which is about 3K lower from the avg tax of 9K which would make your greed payment closer to $2,300..but my question is how do you get that generation greed tax from state workers that have already fled and continue to get our tax dollars sent to them in more tax friendly states ,while the rest of us suffer and pay because we’ve never had platinum health care or any pension at all just savings ,that have been getting .001% interest for the last 10 years …….?

      Reply

      • Posted by Tough Love on July 2, 2018 at 12:06 pm

        You send them an “IOU” instead of a pension payment by check or direct deposit.

        Reply

      • You can’t get a Generation Greed surcharge from those who have died or moved away.

        And you can’t collect a $millionaire’s tax surcharge from those who benefitted from Christie Whitman’s tax cuts, but have less in taxable income now.

        But you can fess up in order to prevent those with an outsize sense of entitlement from demanding even more.

        Reply

        • Posted by Tough Love on July 2, 2018 at 12:23 pm

          You want JUST change ………. meaning something EQUAL to what Taxpayers typically get from their employers?

          (a) You hard-freeze ALL of NJ’s DB pension Plans and move all of NJ’s CURRENT workers into 401k-style DC Plans with a Taxpayer match of no more than 3% to 4% of pay. If it takes a change in the Law or a NJ-Constitutional Amendment to do so, let’s get to it forthwith. And for workers (primarily Police/Fire) not now in Social Security, you enroll now them for future service

          (b) you END all Retiree healthcare subsidies immediately ………… because that’s what Private Sector workers typically get in employer-sponsored retiree healthcare subsidies …… NOTHING.
          ———————————————

          NJ’s Taxpayers have been hoodwinked long enough.

          EQUAL, but NOT better …… on the Taxpayers’ Dime !

          Reply

          • “You hard-freeze ALL of NJ’s DB pension Plans and move all of NJ’s CURRENT workers into 401k-style DC Plans with a Taxpayer match of no more than 3% to 4% of pay.”

            So how would that impact three groups of public workers.

            1) Those cashing out with early retirement, having benefitted from DonnieD’s pension increase and the low taxes of the Christie-plus years.

            2) Those starting out and not getting pension, but at least getting a small 401K-type match for their entire careers.

            3) And those only getting an employer match for a few years, and not getting much of a pension either as their defined benefit pension is frozen right at the point where accruals soar?

            What you want is for Generation Greed to screw the generation immediately after, Generation Apathy, because well that’s the way everything else has gone and they haven’t done anything about it..

            It’s like this — those born before 1958 get all the Social Security and Medicare benefits they promised themselves but didn’t want to pay for, those born from 1958 to 1979 pay in their whole careers, get nothing, and die young after suffering poverty and ill health, and those born in 1980 and later pay more (to pay off Generation Greed’s debts) but get SOMETHING. Sounds good. To Generation Greed.

          • Posted by Tough Love on July 2, 2018 at 1:30 pm

            Larry.

            I’m being “realistic” by advocating to end a CONTINUATION of the huge Public Sector taxpayer ripoff by ending FUTURE service DB Plan accruals (recognizing that the odds of not honoring PAST service accruals is slim to none).

            You’re being stubborn and unrealistic, demanding a reduction in PAST service accruals ……….. which just won’t happen outside of bankruptcy.

      • Oh, and speaking of .001 interest rates, never let anyone say that the bailout of the financial sector and the wealthy during the financial crisis was limited to TARP, which was paid back. There is all that .001 money borrowed from the discount window, reducing income for savers. And the federal debt being jacked up to 100 percent of GDP — or more if all the contingent liabilities that have been taken are included.

        Reply

  4. Posted by MJ on July 2, 2018 at 2:50 pm

    Oh come on now people, you can offer a million different alternatives to pensions, paying down debt etc,. but does anyone really believe that NJ has any intention of paying off their debt???? or reducing pensions or health benefits??

    Where would one begin to put a dent in all of this???? Sorry peeps, its too far gone so may as well just keep going and see where it all ends up….

    Reply

  5. Posted by Tough Love on July 2, 2018 at 9:24 pm

    From NJ Senate President Sweeney here:

    “Sweeney, a veteran lawmaker from Gloucester County and leader of an ironworkers union, identified a different crisis he says the state faces: one of affordability. He’s been sounding the alarm about people leaving the state. Going forward, Sweeney said Friday, he wouldn’t “bargain any further without a commitment” from Murphy to fix the underfunded retirement system.

    “All we’ve done this year is talk about spending,” he told reporters Friday after another round of unsuccessful budget talks. “…The 800-pound gorilla in this room is the pension and health-care plans.””

    ——————————————–

    Sounds like Sweeney is going to give NJ’s Public Sector Unions/workers what they have DESERVED for a LONG time.

    Reply

    • Posted by MJ on July 3, 2018 at 7:08 am

      Sweeney has been saying this for years and not much has happened. To his credit, I recall many years ago him trying to sound the alarm about the pensions but of course no one listened. I believe he wanted to structure them more like the Iron Workers union of which he was the president

      I do have a relative who started working for Gloucester County about 8 ears ago or so(Sweeney’s home turf) who told me that those employees who started after a certain date no longer qualify for post retirement health benefits. I also know a woman who worked for Gloucester County for 5 years awhile back and receives a monthly pension if you can believe that one!

      Sweeney will have to convince all of his other cronies to go along with cutting anything……hopefully he can get some reforms in place before it really goes downhill

      Reply

      • Posted by Tough Love on July 3, 2018 at 7:38 am

        MJ,

        There is nothing inherently “wrong” with earning/receiving a DB pension after only 5 years of service (which is also a common vesting point in Private Sector DB Plans).

        The problem arises when the per-year-of-service formula-factor is unjustly generous (as it just about ALWAYS is in PUBLIC Sector DB Plans …. when compared to such factors in PRIVATE Sector DB Plans), or when the Plan participant can begin collecting their pension at a young age without an appropriate early-retirement reduction (again, commonplace ONLY in PUBLIC Sector Plans).

        Reply

        • Posted by El gaupo on July 3, 2018 at 9:05 am

          I beleive the vesting time in any N.J. public system is ten years. I know it is for Pfrs. Perhaps she had time with another agency beforehand?
          Many towns/counties are indeed negotiating away retirement benifits for new hires or simply taking them for new hires if there is no collective bargaining. The town I work for did so for non union current workers with less than 25 years on back in 2014. They would have done to us too if we did not have a contract. Many neighboring pd are doing the same for new hires. Our latest contract eliminates this benifit for new hires in the police dept.

          Reply

          • Posted by El gaupo on July 3, 2018 at 9:10 am

            Pfrs is 2% a year with a minimum of 10 years of service. Then it is payable at age 55. (Something I’ve advocated for all Pfrs enrollees) It is called a deferred retirement and is for anyone with less than 20 years on. (The 20 yr bill doesn’t apply to folks enrolled after jan. 2000, so we are almost done with that benifit). After that it will be 25 years to get a special retirement. Payable after 25 yrs of service.

          • Posted by Tough Love on July 3, 2018 at 9:34 am

            El gaupo,

            How come you didn’t mention that under the “special retirement” at 25 years the pension rises to 65% of pay for you and many other Police officers still working who retire over the next 15+ years ?

            65%/25= 2.6% per year of service ……….. and collectable at age 55 with ZERO reduction for being able to begin collecting at such a young age.

            That combination of a formula-factor almost TWICE as generous as those commonly used in Private Sector Plans AND being able to begin collecting an UNREDUCED pension typically 10 years younger than those in Private Sector DB Plans, results in YOUR pension having a “COST” just about 4 TIMES more than the lucky few Private Sector workers who still get DB pensions.

            Such generosity is patently absurd ………….. and was clearly BOUGHT from our self-interested, contribution-soliciting, vote-selling Elected Officials with UNION BRIBES disguised as campaign contributions.

            Taxpayers should renege on paying the 50+% share of your pension that assuredly would NOT have been granted in the absence of that Union/Elected-Official collusion.
            ———————————————

            And for the benefit of Stephen Douglas (aka EARTH) likely to chime-in ……………. NO, with (per his earlier comments) current wages about $140K, his wages (alone) are likely far MORE (not LESS) than those of Private Sector workers with comparable education, experience, skills, and knowledge ………………… thereby not justifying ANY (yes ANY) greater taxpayer-funded pensions or benefits.

          • Posted by El gaupo on July 3, 2018 at 2:38 pm

            Yes my pension will be 65%.
            The $140 number is not out of line with what other private sector college educated workers in their mid/late 40s earn. Certainly not far more than private sector employees with 23 years of experience at their craft.
            In fact, you’ve never advocated for a wage reduction per se. your pet peeve has always been your perceived overage in pension benifits compared to private sector. And I get that I honestly do. Certainly doesn’t mean I’m going to advocate for cutting it. But I do hear where u come from. An honest start point for discussion should involve freezing future accruals. Not as some suggest to give a small stipend into retirement.
            Obviously, your side will have to comprimise a little too.
            Either way, Murphy signed S5 today. So let’s start with TPAF and pers and see where we can meet.

          • Posted by Tough Love on July 3, 2018 at 4:46 pm

            Quoting El gaupo ……………….

            “In fact, you’ve never advocated for a wage reduction per se. your pet peeve has always been your perceived overage in pension benifits compared to private sector. ”

            You’re correct, I haven’t advocated for for Police “wage” reductions. While I believe you are “marginally” overpaid, the increase in the grade-in period to full scale from the 5 to 7 years (commonplace a few years back) to 10 to 14 years in more recent Police contracts, has eliminated “most” of the wage excess.

            But given that you are certainly not paid LESS than Private Sector workers with comparable skills, knowledge, education, and experience (even with your 23 years of service), there is ZERO justification for your 4 TIMES more costly pension and retiree healthcare benefits (perhaps worth as much as $500K) that almost nobody in the Private Sector gets from their employer any longer.
            ——————————

            Quoting ………….. “An honest start point for discussion should involve freezing future accruals.”

            Yes I agree, as long as it includes all current (not just new workers) workers.

            But don’t think I didn’t notice that while you offered up THAT consolation …… which will cost you in reduced pension amount only marginally (even if implemented immediately) given that you intend on working only 2 years …………. you didn’t offer up an EQUALLY important give-back, an END to all retiree healthcare subsidies ……… perhaps because doing THAT would cost you dearly. I smell self-interest.

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