TRENTON, N.J. – The Democrats’ support of a more affordable New Jersey was put to a vote on Thursday when Republican leaders pressed the Assembly majority to advance bills cutting income taxes and providing immediate property tax relief. The bills are part of the Assembly GOP’s proposals to combat record-high inflation and nation-high taxes.
In May, inflation hit a 40-year national high of 8.6% and increased to 7.5% in New Jersey – the largest year-over-year increase since December 1981. Compared to this time last year, gas prices have risen nearly 65% in the state. Consumers are also paying 10.4% more for groceries, according to the U.S. Labor Department.
“Incomes are increasing, but inflation is causing our dollars to buy less,” Munoz (R-Union) said. “Higher wages aren’t as meaningful if prices are rising higher than people’s take home pay. We are pushing people into higher tax brackets so they are actually bringing home less pay.”
Munoz sponsors a measure (A2058) to index income tax brackets to rise with inflation. Indexing has been used by the federal government and most states since 1986. Only 13 states including New Jersey don’t do it.
“The goal of this bill is to protect people from higher taxes, especially as their dollar doesn’t go as far as it did before,” Munoz said before motioning to relieve the bill from committee to force a floor vote.
The motion was blocked by Democrats.
Assemblyman Jay Webber gave Assembly Democrats the opportunity to pass his property tax reduction bill (A1012), originally authored with then-Assemblyman Troy Singleton in 2012. The bill directs energy tax receipts back to municipalities for the exclusive purpose of providing direct property tax reductions to residents.
“We have a $10 billion dollar surplus. I have a bipartisan bill that will cut property taxes right now,” Webber (R-Morris) said. “It sends the energy tax receipts that the state has been collecting back to municipalities, but with a very important function. For every dime that goes back to municipalities with these energy tax receipts, the tax levy for that town has to go down by the same amount.”
Utility companies pay fees for the use of public space, also known as public right-of-way, for energy infrastructure like power and sewer lines. The state collects those fees, which go into the Energy Tax Receipts Property Tax Relief Fund. A change in budget language has allowed the state to divert hundreds of millions of those dollars each year from their intended purpose.
Despite the six Democrats on the bill, it was voted down along party lines.