02/09/2018 | Press release | Distributed by Public on 02/09/2018 11:42
Says Taxpayers Need Real Solutions, Not False Hope
Senator Joe Pennacchio (R-Essex, Morris and Passaic) warned that Governor Phil Murphy's proposal to allow homeowners to contribute to municipal charitable funds as an alternative to making property tax payments likely will not be approved by the federal government.
Sen. Joe Pennacchio warned that Governor Murphy's proposal to allow homeowners to contribute to municipal charitable funds as an alternative to making property tax payments likely will not be approved by the federal government. (SenateNJ.com)
'While I agree with the governor's sentiment that we need to provide property tax relief to New Jerseyans, his charitable contribution scheme provides false hope rather than real solutions,' said Pennacchio. 'I have no doubt that the Internal Revenue Service or Congress will strike down this concerted effort to evade federal taxes. We should focus on real solutions that actually lower the cost of government.'
The Governor's proposal would allow taxpayers to skirt the new $10,000 limit on the federal income tax deduction for state and local taxes (SALT) by allowing homeowners to make charitable contributions to local government funds that would offset the property taxes they owe. Contributions to charity remain tax deductible.
Pennacchio urged the Governor to work with legislators on solutions that have been proposed to New Jersey's underlying problem of expensive government that is funded by high taxes.
'We should focus on alleviating our state's unreasonably high tax burden,' said Pennacchio. 'For example, Governor Murphy can join our bipartisan effort to eliminate the state's $10,000 property tax deduction cap. We have real solutions like this that could save taxpayers billions.'
Pennacchio's legislation, S-413, would lift the maximum deduction allowed by the state, reducing the tax burden on New Jersey residents. Other proposals include reinstating interest arbitration caps, limiting sick leave payouts, and health benefits reforms. Combined, those proposals could save New Jersey property taxpayers billions of dollars annually.
'A mayor at the Governor's press conference today expressed doubt that the charitable contribution idea will even work,' added Pennacchio. 'He's right. Rather than subjecting New Jersey residents to the mischievousness of tax evasion, let's work on genuine and immediate tax solutions that we have the power as state lawmakers to advance.'