Trenton’s city officials ought to begin lobbying the city’s legislative delegation to get those representatives to push for amendments to state law that allows municipalities to enact payroll taxes.
A statute currently exists that allows municipalities in New Jersey to pass a 1 percent payroll tax on certain businesses and operations with a payroll of greater than $2,500, but unfortunately for the state capital, the 20,000 state workers employed in the city are exempt from that tax.
That could change with some diligent work by the city’s legislative representation, which includes some of the more powerful legislators in the state of New Jersey. They could use their standing to push for amending the statute to allow Trenton to tap the enormous wealth that goes into state worker paychecks and then flees the city’s borders for the suburbs.
Yes, it may prove unpopular with state unions, but that opposition could be tempered with popular support, because of the fact that such a measure would allow Trenton to generate additional revenue and reduce its reliance on the state for millions of dollars in handouts every single year, which comes out directly from the pockets of all taxpayers.
Right now Trenton faces a multimillion dollar budget shortfall that will likely require, like last year, an emergency infusion of state tax dollars. Such an event could have been precluded if the city had access to what could amount to millions of dollars in payroll taxes.
Also, plenty of other cities outside of New Jersey have enacted similar measures, and in allowing Trenton to join those cities the state government would be working to address a perception in Trenton that the state, as a city stakeholder, does not share the load when it comes to city services.
Local opposition to such a plan could emerge because of such a tax’s perceived impact on the city’s smaller businesses, but perhaps the tax ordinance could be amended to have a greater payroll requirement, therefore saving many of the city’s smaller businesses, but not the state, from being subject to the tax.
Trenton residents not working in the city or at large businesses should also be comforted to know their city would have another revenue source besides the one coming directly out of their collective pockets, which has been increased for seven consecutive years.
It is time to creatively look for money in places elsewhere than the pockets of city taxpayers.