Measure Would Fund School Aid, Tax Relief for Seniors
TRENTON – A bill sponsored by Senators Raymond J. Lesniak, Donald Norcross and Linda Greenstein which would expand the income tax rate for earnings in excess of $1 million a year in order to fund income tax relief for seniors on fixed incomes and fully fund suburban schools under the State school funding formula was approved by the Senate today by a vote of 24-15.
“Governor Christie has continually spoken about the need for shared sacrifice in the contexts of his budget, and this bill would force him to practice what he preaches,” said Senator Lesniak, D-Union. “Through this legislation, we’re asking New Jerseyans with the most to contribute a little more to provide needed tax relief for retired seniors and to fully fund our schools. This bill epitomizes the notion of shared sacrifice, and will ensure seniors can continue to live in the Garden State and that students have access to an adequately funded education.”
“By imposing a surcharge on annual income over a million dollars, we can make New Jersey a little more affordable for seniors on fixed incomes, and property taxpayers who are hit by the high cost of funding our schools,” said Senator Norcross, D-Camden and Gloucester. “This proposal simply asks multimillionaires to pay a little more to help New Jersey families and retired seniors who are struggling in the current economic climate. It’s a compassionate, common sense approach to provide a helping hand to people in need during a tough economy.”
“This bill speaks to our priorities as a State,” said Senator Greenstein, D-Middlesex and Mercer. “Our we going to continue to give tax breaks to millionaires, or are we going to fund our schools and protect our retired seniors? Through this legislation, we can realize the promise of shared sacrifice that Governor Christie has touted, and we can make New Jersey a little more affordable for property taxpayers and seniors on fixed incomes.”
The bill, S-2969, would increase the Gross Income Tax rate on income earned in excess of $1 million annually, from the current tax rate of 8.97% to 10.75%. The increase would only apply on the portion of the income over $1 million, and the higher tax rate would sunset on December 31, 2012.
Under the bill, the proceeds from the millionaires’ tax would go to expand the exclusion under the gross income tax for pensions, annuities and certain other retirement income for qualified taxpayers, to include 100 percent of retirement income for taxpayers who are at least 62 years of age and earn less than $100,000 in gross income annually. The funds would also be used to fully fund suburban school districts in accordance with the provisions of the “School Funding Reform Act of 2008.”
The bill was approved by the Assembly earlier in the day by a vote of 46-32, and now heads to the Governor to be signed into law.