New Jersey: State lawmakers looking to increase taxes on lottery winners and new casinos
If they can’t get money out of rich folks one way, some New Jersey lawmakers have a few other ways in mind.
Every June, Gov. Christie crosses out lines in the state budget that would increase taxes on millionaires or semi-millionaires. And every year unsurprised Democrats talk about all the ways they think that extra income should have been spent.
This year Sen. Ronald Rice, D-Essex, and Sen. Paul Sarlo, D-Bergen, are trying a new tack. They suggested alternate ways to get their hands on some wealth for the treasury.
Rice’s bill, which was advanced by the State Government, Wagering, Tourism and Historic Preservation Committee in the Senate in June, would increase taxes on lottery winnings by half a percent. If enacted, it wouldn’t apply only to the lucky folks who win a million or more, but would be imposed on any winnings over $600.
Although he is not predicting the amount of money that could be raised, Rice would restrict the use of that additional income to support after-school programs in urban areas.
Right now in New Jersey lottery winnings are taxed on a sliding scale that tops out at 10.8 percent. According to the Tax Foundation, New Jersey’s lottery taxes are the highest in the nation, but in New York City winners actually pay more because there’s an 8.8 percent state tax rate plus an additional 3.8 percent city rate.
Pennsylvania does not tax lottery winnings at all. However, the federal government treats all lottery winnings as ordinary income with rates as high as 39.6 percent.
Sarlo, who heads the Senate Budget Committee, has long advocated for casino gambling in the Meadowlands and may support gambling elsewhere in north Jersey. But he wants a whopping 66 percent tax imposed – not on the winners but on the casinos themselves.
When eyes popped and jaws dropped as people heard the numbers, Sarlo acknowledged 66 percent might be a little too high, but he thinks new casinos ought to pay much more than Atlantic City casinos are paying now. Their tab is 9.25 percent. That’s eight percent on their gross revenues and 1.25 percent as an “investment alternative tax.”
Taxes raised under Sarlo’s plan would be split among the state’s general fund, the Casino Reinvestment Development Authority, and the Hackensack Meadowlands Tax Sharing Stabilization Fund. Since its establishment in 1984, the CRDA spent more than $1.5 billion on projects in Atlantic City and $300 million more in other towns. But Atlantic City casinos fell upon hard times lately because of growing competition in nearby states and several have already closed.
The Meadowlands Commission always is the topic of much discontent, with communities where development is allowed paying into a fund used to compensate communities where preservation of wetlands prevents new developments. Despite periodic revisions to sharing formulas, no community ever felt it was being treated fairly.
Although both bills are well intended and would address problems that sorely need being addressed, their chances of passage any time soon are close to none unless they are modified. The Rice bill is unlikely to get support from lottery players anywhere and can expect opposition from suburban representatives unless after-school activities in those communities receive some help, as well.
Sarlo is right to try to get ahead of casinos opening in New York City, but it will be difficult to woo casino owners here if the state will scoop up two thirds of the gross revenues. Some states do tax as much as 60 percent, so his good idea can succeed with a bit of tinkering.
Replies:
Posted by: Skinny on December 9, 2014, 5:57 am
"Pit Boss" wrote:
This year Sen. Ronald Rice, D-Essex, and Sen. Paul Sarlo, D-Bergen, are trying a new tack. They suggested alternate ways to get their hands on some wealth for the treasury.If enacted, it wouldn’t apply only to the lucky folks who win a million or more, but would be imposed on any winnings over $600.
Although he is not predicting the amount of money that could be raised, Rice would restrict the use of that additional income to support after-school programs in urban areas.(ed. Notice he is not proposing to use it to reduce NJ’s significant debt!!)
New Jersey’s lottery taxes are the highest in the nationSarlo, who heads the Senate Budget Committee, has long advocated for casino gambling in the Meadowlands and may support gambling elsewhere in north Jersey. But he wants a whopping 66 percent tax imposed – not on the winners but on the casinos themselves.
Sarlo is right to try to get ahead of casinos opening in New York City, but it will be difficult to woo casino owners here if the state will scoop up two thirds of the gross revenues. Some states do tax as much as 60 percent, so his good idea can succeed with a bit of tinkering.
It is because of thinking like this among our Democrat leaders in the legislature that NJ has the problems it has economically. They want to come up with ridiculous ways to tax the people more so that they can SPEND more. Instead of looking for ways to cut spending and reduce our debt, they do the exact opposite.
Then Christie gets blamed for not reducing our debt, when it is the Dems who are spending the state into insolvency.
Here is an article that just came out.
http://www.nj.com/news/index.ssf/2014/12/nj_among_worst_run_states_in_nation_study_finds.html
If you look at the study you will see, despite having the 3rd highest median income among the 50 states, NJ has the 5th highest debt per capita. Our legislature run by the liberals is spending and taxing us to exorbitant levels.
43. New Jersey
> Debt per capita: $7,287 (5th highest)
> Credit Rating (S&P/Moody’s): A+/A1
> 2013 unemployment rate: 8.2% (10th highest)
> Median household income: $70,165 (3rd highest)
> Poverty rate: 11.4% (8th lowest)
New Jersey is one of only a handful of states where debt exceeded the state’s fiscal 2012 revenues. The state reported $7,287 in debt per capita in fiscal 2012, among the highest figures nationwide. Due to its difficulties in maintaining a balanced state budget, Moody’s awarded New Jersey among the lowest ratings of any state, as well as a negative outlook. On the other hand, New Jersey residents are among the nation’s wealthiest. A typical household earned more than $70,000 in 2013, higher than the median household income in all but two other states. A typical New Jersey home was also worth well over $300,000 in 2013, versus the national median home value of $173,900. However, residents may not be as well off as they seem as the cost of living in New Jersey was 14% higher than the rest of the country in 2012, the third highest cost of living nationwide.
Posted by: Mr Finesse on December 9, 2014, 7:35 pm
Posted by: Dr Crapology on December 12, 2014, 1:41 pm
If they–the legislators–want to increase revenue for the state of Texas legal Las Vegas type gambling would raise millions of dollars. That money is already being raised but in the neighboring states of Louisiana, Oklahoma, and New Mexico. Go to any casino in those states and by far the majority of the car license plates in the parking garages are from Texas. We simply need to redistribute those gambling taxes back home.
Doc
Posted by: ACPA on December 12, 2014, 5:05 pm
My view is that the designated money went to what it was designated for, but the general fund portion of what went to the schools was decreased by an equal amount.
Noah
