Fiscal Flows Explained

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STATE — A new Rutgers Regional Report examined the state county-by-county as of the fiscal year that ended in mid-2010, and found “a significant redistribution of resources” from affluent areas to those of low and moderate means.

“Fiscal Flows in New Jersey: A Spatial Analysis of Major State Taxes and State Aid Programs,” attempts to explain where tax revenues come from and where aid dollars go by county and region.

“Recent tax policy debate, particularly with respect to the state income tax, has focused on issues of equity and the impact of tax rates on economic growth, job creation, and the competitiveness of the state’s business climate,” the report said. “In addition, the state’s property taxes, consistently among the highest in the nation, have long generated enormous and often acrimonious attention from policymakers, the political process, and the public.”

The $29.84 billion New Jersey state budget in fiscal year 2010, consisted of 40.5 percent in school, municipal, or county aid.

School aid, the single largest budgetary item, comprised $9.3 billion while municipal and county aid combined totaled $2.78 billion.

“The level and allocation of school aid has been a major and frequently controversial public policy issue over many decades in New Jersey. A consistent goal of state education policy, often expressed in decisions by the New Jersey State Supreme Court and then subsequently embodied in state school aid budgets, has been to bring parity in educational opportunity across the state regardless of residence,” according to the study.

“This is exactly the way it is supposed to be,” said progressive Democratic strategist James J. Devine. “The strong help the weak, the rich help the poor, the old help the young. We are one American family and we are all in this together.”

Devine predicted that Republicans will seek to use the report to justify efforts to dismantle shared services and state funding because they do not value American ideals such as equality and justice.

The report was authored by Joseph J. Seneca, a professor and economist at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, Will Irving, research associate and James W. Hughes, dean.


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