By Erin Delmore
It’s hard to forget that 23 cents per gallon gas tax that took effect in the fall, but here’s some good news for residents, meant to offset that blow: tax cuts taking effect this year.
New Jersey’s 7 percent sales tax drops just a little bit in 2017 — closer to 6.9 percent. It won’t save you much over the next 12 months — just about 13 cents on a $100 purchase. But that amount will triple starting next year.
For the wealthiest among us: first steps to phase out the estate tax. Now, residents can leave up to $2 million to their heirs upon their death without the estate tax kicking in. Last year, the tax was imposed on estates worth $675,000 or more — the lowest threshold in the country. The entire tax is being phased out to end in 2018.
It’s a move aimed at keeping businesses, seniors and retirees in the Garden State, where property taxes are notoriously high. Here’s one more, a retirement income tax break. This year, couples filing jointly can exclude up to $40,000 of their retirement income from state income taxes, $30,000 for singles. By 2020, it’ll be $100,000 for joint filers, $75,000 for singles. That’s five times above the limit we saw last year.
For New Jersey’s lowest income workers, an increase to the earned income tax credit. Last year, recipients got back 30 percent of what the federal government yielded them. This year, the state will give them 35 percent. That’s about $200 more in the average recipient’s pocket.
And one more, a $3,000 tax exemption for honorably discharged veterans. That’s worth around $100 on average.
While these breaks affect some a little more than others, it’ll hit the state hardest of all — the Office of Legislative Services estimates $1.4 billion lost in annual revenue by 2022. The gas tax will bring in an extra $1.2 billion — but only for transportation projects, leaving other areas of the ailing state budget in the red.
Taking a look at social policy, New Jersey workers are seeing an increase to the minimum wage for the first time in two years, up 6 cents to $8.44 an hour.
Big changes for adopted residents. The state’s unsealing 300,000 birth records previously under lock and key in Trenton. For the first time since the 1940s, adopted people will be able to obtain their original birth certificates — including information about their parents, medical history and cultural identity.
And on bail reform, as New Jersey moves from a system based almost entirely on a person’s ability to pay to one based on the risk posed by the individual. The Garden State is kicking off the effort by hiring more judges in a wholesale move to uphold that constitutional right to a speedy trial.