THE AMERICANS FOR PROSPERITY FY2017 TAXPAYERS BUDGET
Authored by Steve Anderson, C.P.A.
AN EXECUTIVE SUMMARY | THE PATH TO PROSPERITY
Americans for Prosperity is as committed as ever to turning our state around and making this vision a
reality, so that every New Jerseyan can live his or her version of the American Dream. AFP is proud to
be releasing a model budget, providing a roadmap to prosperity by achieving a budget that spends
taxpayers money in a fiscally responsible way and provides core services of government.
HIGHLIGHTS OF THE TAXPAYERS BUDGET:
This budget frees over $1.1 billion for tax relief for New Jersey citizens.
This budget shows how the state can save $750 million and solve the huge debt problems created
by the public workers retirement systems, while providing an inflation protected retirement.
This budget points to and shows how to collect hundreds of millions of federal dollars that New
Jersey is owed but has not been collecting leaving the burden to be carried by the states taxpayers.
This budget provides an alternative for fixing the infrastructure issues to raising the gas tax on
citizens.
This budget removes $105 million from a program with a fraud rate that exceeds 25%, and returns
it to citizens.
This budget addresses individual programs on a point by point basis, showing where existing
programs, including those federal programs administered by the state, can be retooled to either
benefit New Jerseys private sector or operate more efficiently.
THINGS TO CONSIDER:
Over the past three years, the state provided exemptions, deductions, and credits of $64.4 billion.
This included the gross income tax, sales and use tax, and corporate taxes. Anytime the Legislature
has a discussion of tax increases, citizens should suggest to end costly special interest handouts
before looking to taxpayers.
The proposed FY-2017 budget includes these expenditures:
General Revenue: $19,398,167,000 which grew at double the rate of the consumer price index
in the last five years
Casino Control: $50,268,000
Casino Revenue: $199,927,000
Gubernatorial Election: $6,200,000
Property Tax Relief: $15,174,130,000 dedicated by the Constitution, which goes to counties,
municipalities, and schools
Over $22 billion is not budgeted for under expenditures, which encompasses appropriations
throughout the year that do not go through the budget process.
Many expenditures are hidden through aspects of the budget, such as in Interdepartmental Accounts.
In FY2016, over $3.2 billion in tax credits were given for taxes paid in other jurisdictions.
The Federal Government controls a large part of the state budget. See here for a link to the authors
report entitled Maintenance of Effort: The Federal Takeover of State Budgets.
Medicaid Expansion
A large part of the lure of Medicaid Expansion for states was the promise that the federal
government will pay 100% of the cost of expansion in 2014, 2015, and 2016. The federal match
is pared back to 90% in 2020 and beyond.
The rate of cost sharing does not apply to the administrative costs of NJFamilyCare, which will
be subject to the roughly 50% match rate of the regular Medicaid program. The costs to the
state will go up.
The Earned Income Tax Credit Program
Approximately 500,000 Garden State households will benefit from this tax relief, with the credit
for an average working family rising by 50% from approximately $420 to $630. Recipients will
now receive a lump sum payment averaging $2,730 per filer.
EITC is not a reduction in the taxes of the person receiving it, but instead a social welfare
program, which redistributes citizens tax dollars to the recipients of the EITC. Those individuals
who receive EITC did not pay enough taxes to receive this large of a refund.
EITC is racked with fraud and the IRS estimates that in FY2013, 22% to 22% of EITC payments
between $13.3 billion and $15.6 billion were issued improperly.
Transportation
The Department of Transportation revenue stream has grown 236% in the past ten years.
The Transit Authority siphons off funds that could be spent on roads and bridges with $503
million from the Special Transportation Trust fund in FY2016 alone.
Pension Reform
The author discusses the need of moving from a defined benefit to a defined contribution
system.
A properly designed system conversion, even if just for new employees, can provide a funding
stream to accelerate the payoff of the UAAL, while reducing the total amount of funding required
from General Revenue.
ABOUT THE AUTHOR OF THE TAXPAYERS BUDGET:
Mr. Anderson is the managing partner of Anderson, Reichert and Anderson CPAs, LLCs Oklahoma office.
Prior to joining the firm, he spent an extensive portion of his career in the oil and gas industry, first as a
comptroller of a multinational company and later as owner and operator of his own firm.
He served in the administration of Oklahoma Governor Frank Keating, and most recently, spent three
years as the Kansas State Budget Director and State Comptroller in the administration of Governor Sam
Brownback. The Kansas City Star noted that, Perhaps no one is more pivotal in Brownbacks call to limit
spending than one of his first appointees...Steve Anderson.
He has been a prolific author on efficiency in government operations and on governmental accounting
issues, as well as a lecturer for a number of state and national think tanks on a variety of governmental
budget issues. He serves on the Governmental Advisory Board of the Kansas State Society of CPAs, as
well as being a Continuing Professional Education lecturer on multiple governmental accounting and
finance issues. His study of Oklahoma school spending, The Real Cost of Education was praised by
Nobel Laureate Milton Friedman as a great service.
Forbes magazine described his actions in designing a new form of governmental accounting that
measured cost of service delivery as revolutionary. He holds a B.S. in finance from Fort Hays State
University and a MBA from University of Central Oklahoma; in addition to teaching certifications from
Advanced Placement Calculus to Physics and Business in Oklahoma.
AMERICANSFORPROSPERITY.ORG
550 West Main Street, Suite 5, Boonton NJ 07005
State Director Erica Jedynak | p: 862-229-4953 | e: [email protected]
