Friday Facts and Fireworks: July 5, 2019

From NJPP

Friday Facts and Figures is a brief digital newsletter focusing on data points from NJPP reports, research, and policy debates in New Jersey and beyond. This is a special edition with four facts to celebrate the Fourth of July.  Sign up here


72 Percent
A majority of corporate tax subsidies are sold to companies that never applied for them, according to a new analysis by NorthJersey.com. From 2014 to 2017, corporations receiving Grow NJ or residential ERG tax credits sold 72 percent of their subsidies to other companies. These sales are allowed — tax free — under the existing laws governing the state’s corporate tax incentive programs. Corporations are incentivized to sell their tax credits as they often exceed their annual tax liabilities. Until this summer, the state Treasury Department could not fully track the sale and transfer of tax credits between companies. [NorthJersey.com / Ashley Balcerzak]

$235 Million
On Sunday, Governor Murphy signed the Fiscal Year 2020 budget, averting a state shutdown just in time for the holiday weekend. The budget does not include the millionaires tax, meaning there is no new, sustainable revenue to offset the increased spending proposed by lawmakers (the budget passed by the legislature paid for new spending with rosy revenue projections). To protect against a revenue shortfall later in the year, the governor put $235 million worth of line items in a “lock box,” freezing the appropriations until the state has the revenue to pay for them. This fiscally responsible maneuver symbolizes a much-needed departure from gimmicky budgets of the past and could motivate lawmakers to pass a millionaires tax later this year. [NJ.com / Samantha Marcus]

$9 Million
This was a big week for the 2020 Census. First, the Supreme Court rejected the Trump administration’s rationale for a citizenship question, then a few days later, the Justice Department pledged the census would be printed without the question. Now, the Justice Department has reversed course and is searching for new ways to get the question back in. Amidst the chaos, New Jersey is taking proactive measures to ensure an accurate count. In the FY 2020 budget signed by Governor Murphy, the state will appropriate $9 million for census outreach and assistance. This appropriation protects against an undercount, which would risk the loss of billions of dollars in federal funds, fewer congressional seats and Electoral College votes, and inaccurate legislative district boundaries. [The Philadelphia Inquirer / Michaelle Bond]

$3.1 Million
The budget signed by Governor Murphy also includes $3.1 million for legal aid in immigration courts, representing a near-50 percent increase from last year. Free, court-appointed counsel for low-paid immigrants ensures due process and increases the odds of residents winning their case and being reunited with their family. A 2018 report by NJPP found that individuals detained for civil immigration violations are three times as likely to prevail in their cases when they have legal representation. [Asbury Park Press / ​Stacey Barchenger and Ashley Balcerzak]

ICYMI
Catch up on this year’s budget season with NJPP’s FY 2020 Budget: Rapid Reaction. This informal recap includes the data and analysis NJPP is known for — with plenty of gifs! Click the link to see what’s in the budget, what’s out, and why we’re so excited about Governor Murphy’s $401 million deposit into the state’s rainy day fund (spoiler: it’s a budgeting best practice that prepares the state for the next economic downturn). NJPP President Brandon McKoy and Flyers’ mascot, Gritty, make cameo appearances. [NJPP / Louis Di Paolo et al.]

Have a fact or figure for us? Tweet it to @NJPolicy.

NJPP: What Recovery? Poverty in NJ Continues to Rise

As the rest of the country marches out of the Great Recession, New Jersey is almost alone in watching its condition worsen. While some gains have been made over the past several years, the "Jersey Comeback" announced years ago has stalled out, stunting the opportunities for the vast majority of working New Jerseyans.

That's the key finding in NJPP's new Issue Brief on the 2013 American Community Survey data released last week by the US Census Bureau.

The data clearly show that New Jersey still suffers from rising levels of deep poverty, increasing income inequality and a struggling economy even as these metrics are improving for most of the nation.

New Jersey saw the largest increase in poverty and child poverty in the nation in 2013, with the number of New Jerseyans living in poverty increasing by 63,606 and the number of New Jersey children living in poverty increasing by 21,707.

The Garden State was also one of only three states (along with New Mexico and Washington) to experience a rise in both the total number of residents in poverty and the poverty rate. Meanwhile, median household income is down, the middle class continues to shrink and income inequality continues to rise.

So what should New Jersey policymakers do?

To begin to turn the tide, New Jersey needs to start experiencing a robust and broadly shared economic recovery. The way to build a strong recovery is not simple, but it is clear that the strategies employed by New Jersey policymakers in the post-recession era - cutting taxes for businesses and the state's wealthiest residents while attempting to grow jobs with $4.6 billion in tax-incentive awards - are not working.

But lawmakers would also be well-advised to follow the creed of "first, do no harm" and do what they can to ensure the situation does not continue to worsen even more for those at the bottom. That includes policy solutions like restoring the Earned Income Tax Credit to its pre-2010 level, extending earned sick leave to all New Jersey workers and reversing the decision to end the "Heat and Eat" program, which has resulted in the loss of nutritional benefits to thousands of struggling New Jerseyans.

For a full list of recommendations, and to read the full Issue Brief, click here.