Newark Mayor Ras Baraka is pledging to reimagine the New Jersey state budget with equity as its guiding principal if he wins next year’s governor’s race, promising to raise taxes on the state’s highest earners and positioning himself as the furthest left in a burgeoning field of Democratic candidates.
“We will deconstruct the state budget and reassemble with equity as our north star; judging every decision as either a step towards equity or a step towards inequity,” Baraka said. “This will demand that we not only allocate dollars but that we follow those dollars to determine who those dollars actually reach.”
Baraka will require every budget request to be accompanied by an Equity Impact Study — fiscal parallel of an environmental impact statement – before appropriations decisions are made .
“The budget shuffle is artificial, man-made and anti-democratic.,” he explained. “Before I get into my major specific budget proposals, it’s important to point out that a people centered budget begins with a people centered process.”
According to Baraka, the state budget works best for the most wealthy New Jerseyans and places “the highest burden of running this state on the bottom half of income earners.”
“We can flip that, with equity as our guide, we can reimagine a budget that puts people first,” he said. “And the best part about it? It’s proven that the greater the equity in our society, the stronger and more resilient our economy and, ultimately, our state will be in the future.”
The three-term Newark mayor is advocating for reducing the tax burden on 50% of households in the state by flattening their Income Tax rates down to the current rate. Baraka wants a 1.4% tax rate on household incomes of $0 to $90,000
Then Baraka proposes adding brackets to top income earners: $150,200 to $350,000 (6.37%); $350,000 to $500,000 (7.5%); $500,000 to $750,000 (9%); $750,000 to $1 million (10%); $1 million to $2.5 million (11%); $2.51 million to $5 million (11.5%); $5 million to $10 million (12%), and 14% on incomes of $10 million or more.
He says his plan would generate an additional $2 billion in revenues.
Baraka wants to reform New Jersey’s “Mansion Tax” by “adding a second bracket of 2% on sales over $3 million.”
In a bid to reform the tax on inherited wealth, Baraka proposes a reinstatement of the Estate Tax on estates worth more than $1 million, increases the threshold so that any tax on inherited wealth “no longer applies to lower and middle-income families, establishes an exemption of up to $1 million, and expands the application of the Estate tax to direct heirs.
Baraka’s plan is to adopt consensus revenue forecasting and three-year revenue estimates, strengthen New Jersey’s Rainy Day Fund, and require budget stress testing and project three-year costs in major spending areas.
Baraka wants to initiate a sales tax on luxury goods, including chartered flights, limousine rides, country club memberships, and interior decorating.
He also wants to begin the state budget process six weeks earlier.
“Every June we watch the Governor and the Legislature hash out the New Jersey State Budget,” Baraka said. “Every year it is rushed, opaque and uncertain – often with changes made the very day it is passed and signed into law.”
An earlier version of this story incorrectly stated that Baraka wants to begin the budget process six months earlier; his proposal calls for a six-week head start.