“Increasing the gas tax makes sense. But it’s irresponsible to negotiate a deal that raises this tax while reducing other state revenues … And who has been complaining about the sales tax, anyway?”
— NJEA Executive Director Ed Richardson, 2016.
Apparently not Richardson. After all, he is a multi-millionaire, himself, having been paid $2.98 million of taxpayer dollars from 2013-2016. Maybe Mr. Richardson has forgotten that gas and sales taxes are the least progressive taxes. They are the same for everyone and thus hit middle-class New Jerseyans much harder than they hit a one-percenter like Richardson. Perhaps that is why he totally disregards their impact on middle-class New Jerseyans – including teachers, who make $76,000 a year. Where is the tax “fairness” in that?
There’s a reason why the NJEA has constantly pushed for higher taxes. The facts show that the NJEA – the most powerful political force in the state – helped construct a system that automatically and perennially squeezes tight budgets and consistently requires tax increases at both the state and local level.
How high are New Jersey taxes?
According to the Tax Foundation, New Jersey has the worst overall tax climate in the nation – for the fifth straight year. Likewise, Wallethub found that New Jersey citizens have the highest property taxes and total tax burden in America ($11,119). The bottom line is that New Jersey is a very high-tax state.
Why is New Jersey such a high-tax state?
The answer is simple: the single biggest driver of New Jersey taxes is the combined cost of public education at the state and local level. New Jersey has one of the top public education systems in the nation, and school districts must attract and retain high-quality teachers. While this costs a great deal of money, it should not push the state into a perpetual fiscal crisis.
The current reality is that New Jersey’s education spending is exceptionally high – in the top three in the country for 25 of the last 26 years – and consumes 44 percent of all tax collections in the state and over 52 percent of local property taxes.
At the local level, “step and lane” salary guides and generous health benefits put consistent upward pressure on school budgets and property taxes, which often resulted in rejected school budgets.
To alleviate this, the NJEA has relentlessly pushed for greater state education aid and the state taxes necessary to fund it. But New Jersey’s state budget is in perennial, structural deficit, due in significant part to retiree benefit costs, which the NJEA helped to place on the state. Pension over-promising and under-funding and exceptionally generous retiree health benefits – all of which the NJEA played a significant role in bringing about – contributed to squeezing tight state budgets.
Over decades, the NJEA’s solution has always been higher taxes: the NJEA was a driving force behind the introduction of the first state sales tax in 1966 and the first state income tax in 1976, as well as every major tax increase since then. As a result, since 1992, the cumulative toll of these tax hikes on New Jersey citizens has been massive. Total property, income and sales taxes have increased from $12.97 billion to $37.48 billion, or 288 percent.
This is the inevitable result when the most powerful political force in the state pushes for higher taxes for decades: New Jersey becomes one of the highest tax states in America.
The sad irony is that New Jersey taxpayers are funding the NJEA, which has used their tax dollars to push their taxes ever higher.