Speaker Coughlin says proposed tax amnesty program could generate $200M in revenue

As Trenton lawmakers scrounge for budget revenues, Assembly Speaker Craig Coughlin is reviving a rare tactic to raise much needed dollars. He’s proposing a state tax amnesty program, that would run for three months, starting July 1.

“This is money that’s already due and owing to State of New Jersey. We’re going to get it sooner than we might otherwise. It has the advantage of encouraging people to do it by eliminating some of the potential penalties. And doesn’t require us to increase taxes on anybody, and doesn’t require us to cut anything,” said Coughlin.

Past amnesties have raised significant pots of money — varying from $75 million in 2014, to $725 million in 2009, to $277 million in 2002. Coughlin expects to hit the middle ground, with revenue intended for fiscal year 2019.

“I would think conservatively we could look in that $200M range, which is real money,” he said.

The proposed amnesty period would cover Jan. 1, 2014 through Dec. 31, 2016. Delinquent payers would have to pony up their overdue taxes, plus interest. But the state would waive recovery fees, civil and criminal penalties. After the amnesty, a five percent penalty awaits those who don’t pay.

Coughlin mentioned that people do hit rough patches, “people who’ve lost their jobs, people whose businesses have failed. But they want to pay their taxes, here’s a way to help them in that respect.”

An amnesty bill could shake up already-volatile budget negotiations over taxes. In a statement, Senate president Steve Sweeney endorsed the amnesty idea immediately “to generate state revenue without raising taxes. It is a thoughtful proposal that will help New Jersey address the fiscal challenges we face in a resourceful and responsible way.” Sweeney said he would make sure it cleared the legislature. But Gov. Phil Murphy is pushing hard for tax increases, $1.7 billion worth, to fund a laundry list of programs.

He cautiously called amnesty a good idea that merits consideration, “we think it’s got a lot of elements to it that are attractive. I was thrilled to see the Speaker talk about it. I like the Senate President saying it’s a good consideration. The only hesitation is we’re trying like heck to get away from relying on one-off solutions, that’s a concern.”

But, Assembly Minority Leader Jon Bramnick criticized the proposal as “raising taxes at the wrong time and letting people who didn’t pay taxes off the hook.” Senate minority leader Tom Kean Jr. claimed it “set a bad precedent,” and, “it could also force other taxpayers to shoulder an even greater burden.” But some local Republicans in Point Pleasant Beach gave their approval, grudgingly.

“Is it fair? No, it’s not fair. But if it does get money into the coffers — everyone needs it, especially New Jersey, I’m all for it,” said mayor of Point Pleasant Beach, Stephen Reid.

Democrats of course can pass this without Republican votes. And if the governor’s on board — it could be a summer of tax amnesty in New Jersey.