State Treasurer to NJ Chamber Members:
Income Tax Increase Has No Chance
Click here for photos of the event.
New Jersey State Treasurer Andrew Sidamon-Eristoff told a group of New Jersey Chamber of Commerce members on Friday that Gov. Chris Christie will veto any proposed legislation that increases the state income tax on the highest earners, calling such a hike "an excellent strategy for losing jobs and talent."
The state's income tax rate is a factor that employers consider when expanding or relocating a company, Sidamon-Eristoff said. The current rate for the highest earner is 8.97 percent, tied with New York for the highest in the region.
Sidamon-Eristoff cited a New Jersey Chamber of Commerce-funded study that found more than $70 billion in wealth left New Jersey between 2004 and 2008 as affluent residents moved elsewhere.
"We need to modernize New Jersey's tax structure to make the state more competitive," the treasurer said. "What's very important is to signal to the business community that New Jersey is on the mend, that we are on the right path."
The state treasurer noted there are $200 million in pro-growth tax reforms in the state budget that Gov. Christie proposed last month. They include instituting a single sales factor formula for determining Corporation Business Tax liability; allowing a cross-netting of business losses against the state income tax for entrepreneurs involved in more than one line of business; reducing the minimum tax on S-corporations; and exempting from sales tax the installation and support of electronically delivered software for business use.
"It is encouraging to listen to Treasurer Sidamon-Eristoff," said Thomas Bracken, president and CEO of the New Jersey Chamber of Commerce. "Many of the provisions that the treasurer outlined in the governor's budget are exactly the kind of changes the New Jersey Chamber has been promoting for years. These are some of the initiatives we are supporting that will generate economic growth and jobs in New Jersey."
Sidamon-Eristoff promoted the Christie administration's efforts to institute public worker and teacher benefits and pension reform. He said those areas are responsible for $2.5 billion, or 9 percent, of the budget -- and are projected to increase by $1 billion in the next four years. "This is an important moment," The treasurer said. "If we stop moving forward on reform, if we give up, I shudder to think what our future may hold."
The Christie administration is working to move the state to strictly performance-based budgeting that funds state agencies and programs based on value and performance, the treasurer added. The state's traditional system, Sidamon-Eristoff said, "has a built-in bias toward spending."
"We can't have all the government we would like, but (we can have) all the government we can afford," he said. "Government is not a business obviously, but we should run government more efficiently and demand results for our tax dollars."