Sen. Steven Oroho said that a projected state revenue shortfall announced by the Office of Legislative Services highlights the need to advance tax reform efforts. (SenateNJ.com)
“While some will say that a revenue shortfall means we can’t afford tax reform, including the elimination of the estate tax, I believe it shows that we can’t afford to wait,” said Oroho (R-Sussex, Warren, Morris). “The volatility in income tax revenues that is driving the shortfall is directly attributable to the accelerating outmigration of residents, income and wealth to lower tax states.”
Oroho noted that Internal Revenue Service (IRS) data shows the average annual outflow of adjusted gross income (AGI) from New Jersey quickened from $1 billion per year from 1995-2004 to an average of $1.9 billion from 2004-2014, an 87.5% increase.
From 2004 to 2014, New Jersey experienced a net loss of $18.6 billion in AGI due to outmigration to other states, versus a net loss of $8.9 billion in the previous decade. In 2013-2014, the final year for which IRS data is available, the state experienced a $3 billion net loss in AGI.
“New Jersey will continue to lose valuable resources at an ever increasing rate until we enact significant changes to state tax policy,” said Oroho. “Valuable resources that can make up the revenue we need to fund our obligations. We don’t need to lure former residents back to New Jersey to strengthen the state’s fiscal situation, but we must stop chasing current residents away with significantly uncompetitive taxes.”
Oroho is the sponsor of bipartisan legislation, S-1728, to phase out New Jersey’s estate tax, and S-998, to raise the retirement income exclusion five-fold for New Jersey retirees. He is also a sponsor of legislation, S-1932, to establish a state income tax deduction for charitable contributions.
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Wednesday, May 18, 2016
A Way Out Of NJ Budget Shortfall?
New Jersey State Senator Steven Oroho, a member of the Senate Budget and Appropriations Committee, said that a projected state revenue shortfall announced by the Office of Legislative Services today highlights the need to advance tax reform efforts: