MORRIS COUNTY — In a move toward a bipartisan wage hike, Republican Assemblyman Anthony M. Bucco offered to help Democrats achieve higher take-home pay for minimum-wage earners without solely targeting employers.
“The business community is concerned about the ramp-up period,” explained Bucco (R-Morris). “Assemblyman Hal Wirths and I put have put together a compromise that would raise the minimum wage over time to thirteen dollars an hour but increase the earned income tax credit to 80 percent.”
Bucco explained the plans while participating on a legislative panel with Senate President Steve Sweeney and Assembly Speaker Craig Coughlin at the annual NJBIA public policy forum last Friday.
Democrat lawmakers are pushing an increase in the state’s minimum wage to $15 an hour for most workers by 2024 and for all workers by 2029 under a plan put forward by Coughlin.
The Republican proposal increases the minimum wage to $13 over five years (A4464) and immediately raises the earned income tax credit to 80 percent of the federal level (A4465).
The plan also doubles the employer deduction for compensation paid by small businesses with less than 100 employees (A4466) to reduce higher labors costs from raising the minimum wage.
Bucco also raised concerns with the Democrat plan not protecting workers and businesses alike if there is an economic downturn.
“There has to be some sort of mechanism to slow this down if in fact we go into another deep recession like we saw in 2008,” said Bucco.
The GOP plan freezes the minimum wage for 18 months if employment drops over a three- or six-month period.
Bucco also cautioned lawmakers that raising the minimum wage without indexing the state’s income tax brackets could punish low-income earners by offsetting the potential pay raise with higher taxes. Bucco sponsors a bill (A1399) that would adjust income-tax brackets to inflation so taxpayers don’t face tax hikes as a result of cost-of-living raises.
“As our low-income earners begin to see an increase in their salary they get pushed into the next tax bracket where they are now earning less,” asked Bucco.
Twenty-three states index their income tax brackets to inflation, and the federal government has since 1986. It is widely considered a bipartisan tax policy to protect taxpayers from automatic tax hikes.