Did we elect the wrong guy?

From the Star Ledger:

Steve Sweeney’s winning the war with Governor Murphy over taxes

Last June we had a fight on taxes in the state budget.

On one side was Gov. Phil Murphy. He wanted to raise the income tax to go after rich people.

On the other side was Senate President Steve Sweeney. He wanted to raise the corporate tax on businesses.

They compromised. Each got a somewhat smaller version of the type of tax hike he demanded.

Last month we found out who won that fight:

Sweeney – and by a knockout.

The decision came when the Treasury Department released revenue figures for the final quarter of the 2018 calendar year, which had to be paid by Jan. 15, 2019.

The report said corporate tax revenues were up 74.5 percent compared to the prior year after Sweeney’s 2 percent surcharge went into effect. So that was good news.

Meanwhile on the income tax side, Murphy got some bad news about the hike to 10.75 percent in the top rate of the so-called “millionaire’s tax.”

How much did income-tax receipts go up? 

Zero. In fact, revenue dropped 6 percent compared to the prior year – despite the booming economy and the tax hike.

When I asked Sweeney about this last week, he said there was nothing surprising about that result. It was entirely predictable after the Trump tax reform ended federal deductions for state and local taxes – “SALT” for short.

“Tax the rich, tax the rich, tax the rich – and then the rich leave,” Cuomo said on one of the many talk shows he’s been appearing on lately.

This entry was posted in Economics, New Jersey Real Estate, Politics. Bookmark the permalink.

21 Responses to Did we elect the wrong guy?

  1. grim says:

    Real estate recovery?

    NJ has the lowest number of Realtors relative to peak, of any state.


  2. grim says:

    Tax return declines are getting uglier, now down to 17% below last year, from the 8% or so it was at a few weeks ago. This is a big f*cking problem, and will directly impact Q1/Q2 spending, and follow on to GDP.


    Tax refunds are down 17 percent compared with last year, nearly $550, according to the IRS.

    In the last tax cycle, the average refund by Feb. 16 — the halfway mark of the tax season — was $3,256. This year, the average refund stands at $2,703. The total number of people who were eligible for tax returns also decreased, by 26.5 percent from one tax year to the next.

    The 2018 tax season is the first full cycle after Republicans passed the Tax Cuts and Jobs Act in late 2017.

  3. grim says:

    Murphy raises the gas tax, tax collections fall.
    Murphy passes his “millionaires tax”, tax collections fall.

    We’ve hit peak tax in NJ, it’s clear we’re at the limit, further increases simply result in declining tax collections as people either leave, or dramatically change their behavior to compensate.

    Corporate taxes will likely fall as well, it just takes longer for that to be realized as companies can not shift as quickly as individuals can.

  4. Bruiser says:

    Murphy and the rest of the Dems are so far left, Steve Sweeney sounds like a Reaganite Conservative.

  5. Bruiser says:

    Murphy’s plan to tax the rain falling from the sky will be a huge money maker. Due to declines elsewhere in the State budget, that new river of money will be diverted from the buildout of new stormwater utilities to the General Fund.

    Emboldened, Governor Snaggletoof will tax the sunshine, the falling leaves, and the air we breathe.

  6. grim says:

    Stormwater tax will destroy the ability to redevelop the plague of vacant corporate campuses around NJ.

  7. grim says:

    Either that, or you are going to start seeing people tearing up parking lots and replacing them with gravel. They’ll likely sue when the municipality tells them they won’t approve permeable gravel parking, and they’ll probably win.

  8. grim says:

    Ultimately, it’ll probably be based on some kind of lot coverage calculation, similar to the ones already in place across many municipalities.

    What you’ll find is that wealthy people will simply tear out concrete, walkways, patios, driveways, pavers, etc – and replace them with permeable surfaces to reduce their coverage ratios, thus reducing their taxes.

    However, places like Orange, where the structure covers a huge portion of the lot, along with concrete, will get absolutely slammed by the taxes.

    For example, I have municipally mandated sidewalks – about 200 feet on a corner lot. I’d petition to tear out the sidewalks. The town can not mandate I provide and maintain sidewalks, and then simultaneously tax me on the impermeable coverage they cause.

    Alpine has no stormwater issues at all.

    Paterson has massive stormwater issues – billion dollar issues.

  9. Bruiser says:

    Regarding the warehouses & corporate campuses, it will be interesting to see how the state calculates their tax rate. I work in the 8A corridor and most of the facilities out here have their own stormwater retention ponds, built to contain their own runoff so it will infiltrate on-site. This tax has been sold to everyone as a way to treat stormwater runoff that collects pollutants and then dumps into streams & the ocean. If I am collecting all my own runoff and allowing it to percolate on my own property, technically I contribute zero to the problem this tax is supposed to correct…in a fair world, I wouldn’t be taxed at all. If the State bases it solely on surface area of impermeable surface on my lot, I’m now supporting any candidate looking to reverse the tax, or just looking at real estate elsewhere.

  10. yome says:

    My 2018 fed tax paid is $1,200 less than last year. If they took the same amount on payroll,I will not owe $1,200.

    I got a $3000 refund last year with SALT. Sold my one house and only have $9,000 for Ptax deduction.No other deductions I can take to exceed Standard Deduction. Took the $24,000 Standard Deduction this year

    I am not complaining ,as I got rid of $13,500 liability = $8,500 Ptax and $5,000 Mortgage deduction to get $3,000 refund

  11. yome says:

    What is next? Flatulence Tax – AOC Green New Deal

  12. grim says:

    If I am collecting all my own runoff and allowing it to percolate on my own property, technically I contribute zero to the problem this tax is supposed to correct…in a fair world, I wouldn’t be taxed at all.

    This is pretty much mandated for any new residential construction in NJ. You’ll be required to put in a dry-well everywhere, nobody is letting you daylight your storm drains and gutters to the curb unless they already exist.

    We replaced storm drains on our property, we originally had cored curbs, but the piping was collapsed.

    Wayne wouldn’t let us discharge to the street. We raised holy hell, ultimately they realized they couldn’t stop us, so the compromise was to connect directly to the storm sewer. Which was 10x as expensive for us, not to mention posting a $5000 bond for “road opening”.

  13. grim says:

    If the State bases it solely on surface area of impermeable surface on my lot, I’m now supporting any candidate looking to reverse the tax, or just looking at real estate elsewhere.

    Reading through the legislation, this appears to be the case, the fees assessed would need to be directly related to the proportional share of the stormwater utility budget.

    8. (New section) a. Any county, municipality, or authority that
    17 establishes a stormwater utility pursuant to P.L. , c. (C. )
    18 (pending before the Legislature as this bill) may charge and collect
    19 reasonable fees and other charges to recover the stormwater utility’s
    20 costs for stormwater management. These fees and other charges
    21 may be charged to and collected from the owner or occupant, or
    22 both, of any real property from which originates stormwater runoff
    23 which directly or indirectly enters the stormwater management
    24 system or the waters of the State. The owner of any such real
    25 property shall be liable for and shall pay such fees and charges to
    26 the stormwater utility at the time when and place where the fees and
    27 charges are due and payable.
    28 b. Any fee or other charge that a county, municipality, or
    29 authority charges and collects pursuant to this section shall be based
    30 on a fair and equitable approximation of the proportionate
    31 contribution of stormwater runoff from a real property.
    32 c. In establishing fees and other charges pursuant to this
    33 section, a county, municipality, or authority shall provide for:
    34 (1) a partial fee reduction in the form of a credit for any
    35 property which has installed and is operating and maintaining
    36 stormwater best management practices that reduce, retain, or treat
    37 stormwater onsite and which are approved by the county,
    38 municipality, or authority;
    39 (2) an additional partial fee reduction in the form of a credit for
    40 any property which has installed and is operating and maintaining
    41 green infrastructure that reduces, retains, or treats stormwater onsite
    42 and which exceeds any requirements for green infrastructure that
    43 may be applicable to that property under any rule or regulation
    44 adopted by the Department of Environmental Protection or the local
    45 stormwater control ordinance; and
    46 (3) an exemption from fees and other charges for land actively
    47 devoted to agricultural or horticultural use that is valued, assessed,

  14. grim says:

    These fees and other charges may be charged to and collected from the owner or occupant, or both, of any real property from which originates stormwater runoff which directly or indirectly enters the stormwater management system or the waters of the State.

    Pretty much means everyone will be taxed, regardless of stormwater management approach. Indirectly discharged to “the waters of the state” means any drop of rain that hits your property and makes its way down to groundwater.

    The section immediately below it makes perfectly clear that having stormwater control in place doesn’t eliminate the fee:

    34 (1) a partial fee reduction in the form of a credit for any property which has installed and is operating and maintaining stormwater best management practices that reduce, retain, or treat stormwater onsite and which are approved by the county, municipality, or authority;

    So the “rain tax” moniker, would be absolutely appropriate.

  15. Juice Box says:

    re: Rain Tax. Joys of home ownership edition.

    My gutters and storm drainage is all underground and out to the street. Underneath my patio out back etc, sump in basement is tied into that drain. One rainy day in January I had about an inch of water around the sump in the basement area, and the sump motor was dead. I replaced the sump pump and back flow valve. Water then just came up into my backyard patio drain and pooled around. I rented a drain camera at Home Depot and found roots clogging the pipe about 50 ft down the line in the buried pipe 3 feet down. Turns out the storm drainage, the buried black corrugated pipe was completely clogged with roots and the water from the gutters was backing up into my basement. Roto Rooter was called and for $65 bucks I find out they won’t put their equipment in the black corrugated pipe since it will ruin the pipe and/or their drain snake. So I got to digging with a pick axe and shovel and chopped out the section of corrugated pipe that the tree roots had made their way into. Not so fast however, after several hours of digging a nearly 4 ft deep fox hole in my back yard I put the drain camera in the now cleared line and found another blocked area about 12 ft down from that point. Did some research. I have a large willow tree out back. Turns out weeping willow tree roots will spread far and wide in search of water, so there is no telling how many more root blockages there are in the pipe to the the street.

    So for now I have the hole I dug 4 ft down filling up with water when it rains, acts as a catch basin and my basement does not flood for now.

    I am weighing digging a new trench and laying new pipe with a ditch witch or attempting to clean the black corrugated pipes again myself.

    BTW -Chuck from Apple Drains has an awesome YouTube channel for drainage problems.


  16. 1987 Condo says:

    So the following is from the NJ.com editorial…are they right in saying this is under local control??

    “Aside from not being about rain, this bill isn’t a tax: It doesn’t force towns or counties to fine property owners, it just gives them the ability to opt in. Most communities likely won’t, unless they’re facing severe flooding problems.”


  17. Bruiser says:

    Amazing. In any other state, that Rain Tax would be an instant signing of one’s own political death warrant. Do our courts ever strike down unconstitutional taxes, or is our State Constitution so poorly written, that new developments are forced to control their own stormwater runoff into private recharge basins (doing the work a public stormwater utility would do) and then turn around and tax the same in order to fund that public utility…it is effing ponderous.

  18. Libturd...look me up in Costa Rica says:

    What happens with my place where a lake forms in my backyard from the runoff of about 15 houses UP the block from us?

    Do I get a refund for collecting their water?

  19. leftwing says:

    Last house I built the cost for permeability was ridiculous.

    Needed a professional study to get zoning approval, calculating every possible runoff number from every possible source under a number of scenarios. Had to be thirty pages long. Don’t recall how much it cost, may have been close to $10k.

    Engineering conclusion was we needed four concrete cans in the front yard. Two primary, two backup. Literally tore the entire front yard up to install. Can’t recall the cost of them, in addition to the excavation, base stone, etc. As well as the costs to remove two large trees (permit acquisition, time, and removal) to be able to install the drywell system.

    All this despite the soil being sand to sandy loam (high permeability, no discharge). The excavator for the perc test and GC just shook their heads in disbelief at the idea of four cans as the soil literally sucked up the water like a sponge.

    Even better, the house we knocked down was there for forty years and had zero indications of any water in the basement. And no sump. And, just for kicks, while the backhoe was digging the hole for the first can we almost lost it as it rear tire started sinking into the ground. Turns out there was an original drywell, laid brick wall unbelievably. Opened that up, no water marks (no or little historical permeability issues). No one in the neighborhood has a sump or any issues.

    So, if I understand the new law correctly, a builder still will be required to pay for the study, pay for the purchase and installation of a drywell system, and then regardless of the those mitigation costs he will still be taxed on theoretical runoff?

    This state is seriously a fcuking joke.

  20. DuctTape The Pumkin says:

    Buying property in NJ in the next 10yrs+ is picking up a hot potato with an m-80 inside. Simply because the economics of the state is changing as discussed here many times and the governmental structure has not shifted.

    Who or what is going to happen or force towns to merge and massive accompanying reduction of employment? Who are going to be there winners or losers.?

    The one big police restructuring in NJ – Camden City into Camden County happened for 2 reasons. One economics, but the second was hushed. Camden City PD had so many “Brady” cops that they could not do job properly.

    One of the reason this issue has not been address yet, is simply NJ’s lead at attracting immigrants so there is always someone in the bottom of the pole buying and pushing up. You can see the effect in east (immigrant influx) vs west (no immigrant influx) of 287. The nationalistic anti-immigrant legal or illegal is here to stay. So a get real moment is fast approaching.

    Grim, lay off the bustelo expresso this morning, you sound like this


    here is something for you,


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