New Jersey Economic and Fiscal Policy Group Issues Recommendations
August 10, 2018
The Economic and Fiscal Policy Workgroup was created earlier this year to make recommendations to address New Jersey's public worker pension crisis, reduce property taxes, create government and school efficiencies and improve the state's tax structure.
Co-chaired by Senator Paul Sarlo, Senator Steven Oroho and Assemblyman Louis Greenwald, the group consists of both legislators and non-legislative members, including NJCPA CEO Ralph Thomas, CPA (DC), CGMA. The group's five areas of focus are:
- Pension and benefit reform
- Education reform at the administrative level
- County and municipal government reform and shared services
- State and local government tax structure
- Leveraging assets to stabilize the pension system
On August 9, the group issued a report consisting of dozens of recommendations. In the tax category, the following was recommended:
- Enable S corporations, LLCs and partnerships to pay state taxes equivalent to the gross income tax obligations of their owners and partners, thus making the state tax payments deductible on their federal taxes.
- Split revenue from payments in lieu of taxes (PILOTs) among municipalities, school districts and counties based on current property tax ratios.
- Undertake a comprehensive analysis of New Jersey sales tax exemptions to simplify the tax code.
- Revise New Jersey's property tax relief program to ensure that relief is provided equitably.
- Establish a permanent Economic and Fiscal Policy Review Commission made up of economists, academics and tax experts to provide an ongoing review of taxation best practices.
- Permit a gross income tax deduction for charitable donations to New Jersey-based charitable organizations.
- Focus additional tax incentives towards small businesses to support more entrepreneurs with facilities located in New Jersey.
- Permit a revenue-neutral county or multi-county/regional 1-percent sales tax option paid partly by out-of-staters to be used to potentially cut property taxes by more than $1 billion if all counties participate.
View the full report