NJ agriculture secretary: Farmers would benefit from change to estate tax

 Add New Jersey's secretary of agriculture to the list of officials endorsing a change to the state's estate tax.

Secretary Douglas Fisher spoke Monday in favor of changing the unpopular tax while testifying before the Assembly Budget Committee as part of the panel's ongoing review of Gov. Chris Christie's proposed $34.8 billion budget.

Fisher told lawmakers that New Jersey farmers have arguably the most to gain by changing the tax, which is currently levied on all estates valued at over $675,000.

"I can honestly say I can't think of any group that would be more affected by a change in that policy than farmers, who put their whole life, stock and trade into hunks of land that they grow and build businesses on," he said in response to a question from Assemblyman Tony Bucco Jr., R-25th of Boonton.

"Many (farmers) begin to build this enterprise and then they pass it on to the future generation. If they don't get it right in terms of what the consequence will be in terms of taxes — many families can't continue to farm. ... It's a major consequence and would be extraordinarily helpful to the farming community," Fisher said, adding that the state Board of Agriculture also supports changing the tax.

Fisher's comments came amid increasing debate over the estate tax, which is one of two so-called "death taxes" levied in New Jersey. The other is the inheritance tax, which is imposed separately on assets left to siblings, nephews, nieces and other distant relatives or friends.

Christie has called on the Democratic-controlled Legislature to abolish the estate tax this year, although his proposed budget does not reflect any change.

The Senate Budget Committee has advanced legislation to phase out the tax over five years, but Assembly Speaker Vincent Prieto, D-32nd of Secaucus, said Monday that he is opposed to completely eliminating the tax, arguing that the state can't afford to lose $450 million in revenues.

In a statement, Prieto said he prefers increasing the earned income tax credit for the working poor up to 40 percent of the federal benefit amount. Christie agreed to boost the credit last summer from 20 percent to 30 percent.

"If you want to talk about real tax fairness, then you must talk about actions such as increasing tax credits for working families, not providing tax breaks to the wealthy,” Prieto said.

He said he was open to considering raising the threshold for when the tax kicks in, as the $675,000 threshold is the lowest in the nation. Some lawmakers have also said they would be willing to compromise by changing the tax to the federal level of $5.4 million or even $2.5 million, which is the average of other states' estate tax threshold.

Prieto's position could complicate negotiations between legislative leaders and Christie over renewal of the state's ailing Transportation Trust Fund, which is overburdened with debt and due to run out of money in early August without an influx of new revenues.

Eliminating the estate tax has frequently been discussed in tandem with raising the state's comparatively low gas tax in order to provide revenue for the trust fund.

Fisher said the estate tax was one of the most critical issues facing farmers, along with the status of the state's farmland preservation coffers. He said that the farmland coffers are completely spent down, and that the state is unable to provide any new dollars for preserving farms until the Legislature and governor can reach an agreement on how to divide $80 million in corporate business tax revenue dedicated to preservation programs.

Christie's proposed budget calls for farmland preservation to get about $13.7 million, but lawmakers have sent him a bill that would dedicate close to $21 million.

The legislation is identical to a bill Christie vetoed in January at the end of the previous two-year legislative session.

Fisher said the state has about 720,000 acres devoted to farming. Maintaining that base is key, he said.

"Those 700,000 acres, most of them are critical at this juncture to make sure we continue the enterprise of agriculture in this state," he said. "That's where the farmland preservation program ... is so critical. One of the biggest pressures to farming is development because the land is so valuable."

Fisher said the state is unable to accept new applications for preservation, and several counties, including Burlington, have spent down all their state funding to assist with their own farmland acquisitions and preservation.

Assemblyman Troy Singleton, D-7th of Palmyra, questioned whether the $13.7 million proposed in the governor's budget was enough, since the state typically provided $2 million each in preservation grants to 18 counties.

Fisher said the department would make do with whatever the governor and Legislature agree on.

"We're going to do our jobs based on whatever the dollars are," he said.

This story contains information from The Associated Press.

 

original article 

TROY SINGLETON
ASSEMBLYMAN, 7TH DISTRICT
400 NORTH CHURCH STREET, SUITE 260
MOORESTOWN, NJ 08057
 
Tel: 856-234-2790
Fax: 856-234-2957
Email: AsmSingleton@njleg.org