Bill > A324

Introduced Session

This bill establishes a Surplus Gross Income Tax Revenue Account in the Property Tax Relief Fund to serve as a "rainy day fund" for property tax relief programs and State Aid programs that offset local property taxes. The Property Tax Relief Fund as the constitutionally mandated destination for all New Jersey gross income tax collections, has been subject to wide annual swings during recent times preceding, during and following the Great Recession. Official estimates of anticipated gross income tax revenue collections that are important in budgeting for essential, annual direct property taxpayer relief, often has been subject to unexpected ups and downs. One recent example is the failure of State budgets to distribute Homestead Benefits for over 18 months including the entire 2014 calendar year. A very high portion of such annual gross tax revenue, under a progressive tax rate structure, relies upon the annual tax payments of a very small number of very high income taxpayers. Their annual income levels can be subject to often unforeseen turns and trends in national economic factors and tax policy changes beyond New Jersey's domain. In order for the State to better budget for the annual appropriations that largely funded from this revenue source, it is necessary to keep a reasonable portion of this annual revenue in reserve during periods in which tax collections exceed anticipated amounts so some modest balance of this funding source is maintained and is available for periods during which projected tax collections falter below budgeted expectations. The administration of this reserve account is based upon the Surplus Revenue Fund established for General Fund revenues. However, annual credits to the Surplus Gross Income Tax Revenue Account will be based upon an amount equivalent to one-half of the excess, if there be any, of the amount of gross income tax collections actually collected during a State fiscal year that exceeds by more than 6% the amount certified by the Governor for projected gross income tax collections for that fiscal year when the annual State budget is approved.

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Joe Lagana (D)*,  Troy Singleton (D)*, 

Introduced, Referred to Assembly Budget Committee (on 01/27/2016)