New Jersey is one of the most diverse states in the nation, and we are stronger — culturally and economically — because of it.
Though elected officials celebrate this diversity as an important asset, our state tax code, and the Legislature’s proposed state budget for the coming fiscal year, send a different message by doing too little to sustain equitable treatment to New Jersey’s communities of color.
State tax policy is an important, yet underutilized, tool to help undo the nation’s legacy of racism and discrimination. By investing in public assets — like education, job training, and reliable mass transit — states can create opportunities for people of color to thrive, which in turn benefits New Jerseyans of all backgrounds. This is sorely needed in New Jersey, as the state has one of the highest wealth gaps between white residents and people of color.
Median net worth of a white New Jersey family is $309,000, while the median for Latino families is just $7,020 and for blacks just $5,900, according to the New Jersey Institute for Social Justice. These disparities exist, in large part, due to years of discriminatory governmental tax and budget policy that has plundered the wealth and savings of the poor and people of color while cutting taxes for the extremely wealthy. It’s classic trickle-down economics. But it doesn’t have to be this way.
The Legislature’s budget makes important investments in NJ Transit, education, healthcare, and other priorities that help New Jerseyans succeed, which could help dismantle longstanding barriers faced by people of color in our state. But for those investments to work, they must be sustained.
Unfortunately, the Legislature’s budget falls short by that measure because it relies on overly optimistic projections of economic growth despite an anticipated economic slowdown within the next year. These are the same gimmicks that Gov. Chris Christie used to “balance” his budgets, consistently resulting in deep cuts to programs and services that did great damage to New Jerseyans who struggle to get by, especially communities of color.
A better path forward would start with making the tax code fairer for everyday New Jerseyans.
A millionaires tax, as proposed by Gov. Phil Murphy, would simply restore the 10.75 percent tax rate on every dollar people make over $1 million. This common-sense policy, which used to be in effect but expired under the Christie administration, is necessary to help New Jersey make the public investments that are crucial to reliably support good schools, property tax relief, and improve the state’s credit rating – which facilitates responsible borrowing for projects with long-term benefits. These investments are pivotal to growing the economy equitably, without balancing state budgets on the backs of low-paid and middle-class families.
The Legislature knows this, having voted to approve a millionaires tax five times when Governor Christie was in office, only to see him veto it each time. Now that New Jersey has a Democratic governor willing to sign such legislation, their desire to pass it again has mysteriously disappeared.
If lawmakers continue to oppose the millionaires tax, New Jersey will not have the resources to make it through the next economic downturn without reducing important services. We’ve seen this story before, most recently during the Great Recession a decade ago, and it doesn’t end well for communities of color or New Jerseyans already struggling to get by.
Instead of repeating the mistakes of the past, lawmakers should take a long-term approach to managing the state’s finances. Instead of budgeting just to get through the next fiscal year, that would mean keeping the next 20 years in mind, so our children — New Jersey’s future — will inherit a fiscally sound state that invests in its families. That’s why restoring the previous tax rates on the ultra-wealthy is so important.
And you don’t have to just take our word for it. Such other states as New York, Connecticut, Pennsylvania and Massachusetts, all implemented effective policies that collect more revenue now than before the Great Recession. Meanwhile, New Jersey collects less revenue than in 2008, and the state’s finances are weaker as a result.
Truly celebrating and strengthening the diversity of our state and New Jerseyans of color requires implementing sensible tax and budget policy. Failing to restore appropriate tax rates on the wealthy, and bring in more revenue for important public investments that help all New Jerseyans thrive, will once again mean communities of color will be the first ones on the chopping block.