New Jersey employers are mobilising to block a new payroll tax intended to help fund the city's public school district, which has just been unanimously approved by the City Council.
The tax would amount to 1% of each company’s total payroll, although the wages of Jersey City residents would be exempt. This means that employers rather than workers would be expected to foot the bill, according to NJ.
City and school officials believe the payroll tax could bring in as much as US$80 million annually. The aim is to give all of the revenue to the 30,000-student school district, which is facing a roughly US$20 million shortfall because of state aid cuts. Any extra money raised would be held in a trust to be used at a later date.
Schools superintendent Marcia V Lyles said after the vote: "I am obviously thrilled at the outcome."
But the Council vote is unlikely to be the end of the road for struggle to introduce the payroll tax. A group representing business owners has threatened to start a petition drive that, if successful, would either force the Council to reverse its decision or put the tax up for a vote in a referendum. The group requires signatures from more than 6,000 voters who want the tax overturned.
Andrew Musick, of the New Jersey Business and Industry Association told the Hudson County View: “This proposal will add to the cumulative impact on business when combining it with the corporate business tax surcharge and increased income tax rate, as well as new and forthcoming labour and energy mandates. These aggregate costs will directly impact employers in Jersey City, both large and small businesses, as well as entrepreneurs.”
As a result, the danger was that the payroll tax would “chip away at the competitive advantage that Jersey City has established for itself as a lower-cost alternative when compared to surrounding states and specifically New York City”, he added.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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New Jersey employers are mobilising to block a new payroll tax intended to help fund the city's public school district, which has just been unanimously approved by the City Council.
The tax would amount to 1% of each company’s total payroll, although the wages of Jersey City residents would be exempt. This means that employers rather than workers would be expected to foot the bill, according to NJ.
City and school officials believe the payroll tax could bring in as much as US$80 million annually. The aim is to give all of the revenue to the 30,000-student school district, which is facing a roughly US$20 million shortfall because of state aid cuts. Any extra money raised would be held in a trust to be used at a later date.
Schools superintendent Marcia V Lyles said after the vote: "I am obviously thrilled at the outcome."
But the Council vote is unlikely to be the end of the road for struggle to introduce the payroll tax. A group representing business owners has threatened to start a petition drive that, if successful, would either force the Council to reverse its decision or put the tax up for a vote in a referendum. The group requires signatures from more than 6,000 voters who want the tax overturned.
Andrew Musick, of the New Jersey Business and Industry Association told the Hudson County View: “This proposal will add to the cumulative impact on business when combining it with the corporate business tax surcharge and increased income tax rate, as well as new and forthcoming labour and energy mandates. These aggregate costs will directly impact employers in Jersey City, both large and small businesses, as well as entrepreneurs.”
As a result, the danger was that the payroll tax would “chip away at the competitive advantage that Jersey City has established for itself as a lower-cost alternative when compared to surrounding states and specifically New York City”, he added.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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