(The Center Square) – Legislation sponsors say will keep New Jerseyans from paying taxes in a higher tax bracket because of inflation has been advanced by the Senate Budget & Appropriations Committee.
The measure, S-676, “indexes for inflation the taxable income brackets under the New Jersey gross income tax.” Under the proposal, state officials would revise tax brackets annually.
The bill “will protect New Jerseyans from paying higher income taxes due to inflation and provide tax relief to the many New Jerseyans who live paycheck to paycheck,” state Sen. Anthony M. Bucco, R-Boonton, said in a statement.
He added that Democratic Gov. Phil Murphy has an unexpected $3 million to $4 million in tax collections.
“Our legislation is one way we can start to give it back to struggling New Jerseyans,” Bucco added. “We need to show people that Trenton is finally getting serious about addressing their affordability concerns.”
In an estimate, the Office of Legislative Services (OLS) said the bill could reduce state revenues by $7.5 million to $22 million in fiscal 2023. It could also result in an annual decline in gross income tax (GIT) revenues for the state’s Property Tax Relief Fund by $150 million to $440 million annually starting in fiscal 2024.
In its estimate, OLS assumed the consumer price index for urban consumers would stay between 2% and 6% annually.
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