Two bills aimed at ensuring the Governor’s budget matches its proponents’ calls for “shared sacrifice” among all New Jerseyans while protecting seniors and the disabled from potentially crushing prescription drug costs and higher property taxes were released today by the Senate and Budget Appropriations Committee.
The first bill (S-10) calls for reinstating an income tax surcharge on residents with annual taxable earnings in excess of $1 million – a category that counted roughly 16,000 New Jerseyans among its ranks last year. It is being sponsored by Senate President Stephen M. Sweeney.
A companion measure (S-20) would dedicate the estimated $637 million in revenues to eliminating Gov. Christie’s plans to force senior citizens and the disabled to pay higher prescription drugs co-pays and deductibles and restoring senior and disabled property tax rebates to last year’s levels. The bill is sponsored by Senator Jim Whelan.
“The Governor’s rhetoric of ‘shared sacrifice’ has one fatal flaw – he is protecting the wealthiest from having to sacrifice anything while our seniors and disabled residents get saddled with higher prescription drug costs and higher property taxes,” said Sweeney (D-Gloucester/Cumberland/Salem). “It’s time the sound bite of ‘shared sacrifice’ matched reality. It is patently unfair for the wealthiest to be given a huge tax cut while seniors on fixed incomes get slapped with thousands of dollars in new taxes.”
Under the plan:
- The tax rate on income over $1 million would be restored to 10.75 percent from 8.97 percent.
- Christie’s plan to charge a new $310 deductible to 105,000 senior and disabled citizens in the Pharmaceutical Assistance to the Aged and Disabled prescription drug program and 23,000 senior citizens enrolled in the Senior Gold prescription drug program would be eliminated.
- Christie’s plan to more than double prescription drug co-payments on those senior and disabled citizens would be eliminated.
- Property tax relief for more than 600,000 senior homeowners and tenants would be restored to last year’s levels.
The nonpartisan Office of Legislative Services estimated that Christie’s plan would cost a retired couple living on a fixed income of $40,000 upwards of $1,320 in new property taxes. While that analysis did not take into account the proposed higher prescription drug deductible and co-pays, the New Jersey Foundation for Aging said the average senior citizen would pay an additional $430 per year.
Meanwhile, the OLS study reported that a family making $1.2 million would receive a tax cut of $12,398.
Across the state, approximately 278,000 senior and disabled homeowners and 78,000 senior and disabled tenants report less than $20,000 in annual earnings.
“For seniors and disabled residents living on fixed incomes, the increased cost of living under the Governor’s budget could push them into poverty or out of New Jersey altogether,” said Whelan (D-Atlantic). “We owe them better. Shame on us if we place a higher priority on giving the wealthiest half-of-one-percent a massive tax cut and demand that seniors and disabled on the lowest end of the spectrum pay more to make up for it.”
Senator Paul Sarlo (D-Bergen/Essex/Passaic), the panel’s chairman, noted that by limiting the surcharge only to taxable incomes of at least $1 million, thousands of small business owners will be shielded from the levy at a time when the state will be relying on them to help lead the economic recovery.
“We can protect the small business leaders we need to help rebuild our economy while also allowing our most vulnerable residents to continue to call New Jersey home,” said Sarlo.
The bills, each released 8-4, have been scheduled for a May 20 Senate floor vote.