State Senate President Steve Sweeney identified 13 ideas that he said will help the state provide economic relief from the impact of the coronavirus pandemic to both individual and business owners.
Sweeney (D-West Deptford) said the initiatives, released Saturday afternoon, would help mitigate the financial consequences of the public health crisis for New Jersey residents.
“Protecting the health and safety of the public is the top priority, but we should also take what actions we can to minimize the economic impact on individuals, families and businesses in New Jersey,” Sweeney said in a release.
Sweeney said the actions could include a two-month sales tax holiday for May and June, deferred property tax payments for 45 to 60 days, a 60-day deferral of sales tax payments for February and March, and interest-only mortgage payments.
Sweeney said the actions could be taken by the administration, through legislation, or by the banking community.
“This is a crisis that calls for the cooperation of everyone in the public and private sectors,” Sweeney said. “We know the pandemic will only get worse, so we should be prepared to address the economic fallout, as well.”
Details of the initiatives are still being worked out, the release said.
Here are the ideas Sweeney is proposed, appearing as they were presented in the release:
- Work in Person Waivers: There are a number of laws on the books that require certain businesses/professions to conduct business in person. This would provide a temporary waiver during the current emergency so folks can do more work at home with fewer person-to-person contacts.
- Small Business Sales Tax Remittance Reduction: The economic fallout from the current emergency will fall especially hard on small businesses that deal in person-to-person interactions. This would allow those businesses that stay open and keep their employees on hand to retain a percentage of the sales taxes that is collected from customers during and immediately after the emergency.
- Payroll Tax Holiday: A break provided by the state would help to put more money back in the pockets of employees and employers.
- Tax Deadline Extension: The federal government has or is considering extending tax filing deadlines and waiving certain penalties and interest for late filings/payments. The director of the Division of Taxation in New Jersey has similar powers to do the same in the state, but a bill making this explicit, especially for this tax filing season, would be helpful.
- Permit Extensions: Similar to previous downturns, permit deadlines are a particular concern. A temporary extension should be considered for previously issued permits that were expected to expire during the current emergency. It would be helpful to have a commission formed that would have the express purpose of approving building/development permits on an expedited basis when the current emergency ends. This would help in getting the economy going when the current emergency ends.
- Business Action Center Hotline: Heavily promoting and adding additional resources to beef up the BAC hotline is vital for small businesses. The hotline should be a point of contact for business owners and give them an outlet to raise concerns and bring forward questions that may not be answerable otherwise. It is important for businesses to have a place where they can turn.
- Business Credit for Quarantined Workers: Many businesses are likely to have workers who need to be quarantined during the current emergency. The state could develop and offer a Corporate Business Tax/Gross Income Tax credit for businesses that continue to pay their employees while quarantined because of an outbreak.
- Alternative Business Calculation: The state established the Alternative Business Calculation during Gov. Chris Christie’s term, which newly allowed business owners that filed under the GIT to net gains and losses from certain business-related categories of income and to carry forward losses for up to 20 years. The current ABC deduction is limited to a percentage of the calculation; currently at 50% of the “business increment.” This would allow these businesses to take an increased percentage of the business increment as a deduction or to altogether remove the limits for business losses incurred during 2020 as a result of the emergency.
- Temporary Extension of Unemployment Benefits: During previous recessions, the federal government as well as the state governments have temporarily extended unemployment compensation benefits. These programs extended the time an individual might claim UI benefits (ranging from an additional six to 63 weeks) and had expiration dates. Some extensions took into account state economic conditions. This is a tried and true method of boosting an existing program to get money into the hands of the people who need it most and so that it can quickly begin to be circulated. This time around, the state has the added benefit of a UI trust fund that is much improved.
- Nutritional Assistance Benefit Enhancements: A number of good government groups, including the Center on Budget and Policy Priorities, have recommended increasing access or boosting benefits through existing nutrition assistance programs like SNAP or free and reduced school breakfast/lunches. The proposal would be to increase state spending on these programs on a temporary basis to increase the pool of people who are eligible or increase the amount of the eligible benefit individuals and families are able to claim. The same enhancements could be recommended for General Assistance and Emergency Assistance benefits, because the increases would deliver assistance quickly to people struggling to get by who will spend virtually all of the additional resources they receive — that is, low- and middle-income households, who spend most of the income they have.
- Sales Tax Holiday: During prior downturns, different proposals have been floated to enact a temporary sales tax holiday as a way to encourage consumer spending and stimulate the economy. Similar legislation could be drafted to create a temporary tax break when the emergency recedes, as a way to induce consumer spending.
- Protect Workers and Consumers by Limiting Returns: For good reason, many consumers have decided to stockpile food and supplies in the event of being quarantined. However, stores cannot determine what exposure many of these products may have had and, therefore, for several months following the end of the public health crisis, supermarkets and grocery stores should suspend receiving returns of any product that could result in the continuation of the spread of disease.
- Utilities Should Waive Late Payment Fees: While we applaud utilities for ensuring people access during this unprecedented pandemic, utilities should also waive late fees. Many people’s paychecks will be temporarily interrupted or, worse, people will be temporarily unemployed, and utilities should waive late fees for the next several months.