October 15, 2008
Contact: Robbie Kenney / (609) 654-1498Assemblyman Scott Rudder (R-8), Assemblywoman Dawn Addiego (R-8)
Proposal Would Give State a Much-Needed Economic Boost During the Critical Holiday Shopping Season
In an effort to provide a boost to the state’s economy, Assemblywoman Dawn Marie Addiego and Assemblyman Scott Rudder today said they are supporting an Assembly Republican proposal to cut the state sales tax in half for the crucial holiday shopping season between Thanksgiving and the start of the New Year.
“This is a make or break time of year for many New Jersey businesses. If those businesses struggle they will close their doors and our state will lose jobs,” said Assemblywoman Addiego. “This proposal will give consumers more spending power while helping to keep jobs in our state. We have heard a lot about what needs to be done to bail out Wall Street, but this is an opportunity to provide a helping hand to working New Jersey families and small business owners.”
“This will provide a desperately needed economic boost for New Jersey,” said Assemblyman Rudder. “People from every class stand to benefit. For the low-wage-earner, this can help protect their job. And for the business owner, it is creating an environment that will keep stores solvent for another year.”
The proposal to cut the sales tax in half would reduce the sales tax from 7 percent to 3.5 percent statewide, and from 3.5 percent to 1.75 percent in existing Urban Enterprise Zones. Half of the sales tax collections during this period last year totaled $500 million, but Addiego and Rudder said that loss in revenue will largely be offset by increased sales activity and cuts to unnecessary state spending.
Republicans had proposed $1.32 billion in possible budget savings in May and adopting even one-third of those cuts would more than make up for any potential loss in sales tax revenue.
“This is for a short period of time, and the impact on the state is negligible. But it provides a great psychological benefit for consumers who are feeling besieged by frightening economic developments,” said Assemblyman Rudder.
Numerous reports project that this year’s holiday shopping season could be the worst in years for retailers. The National Retail Federation recently projected that holiday season sales will only rise by 2.2 percent – less than half the average rise in sales during the past ten holiday seasons. Additionally, the market research firm TNS Retail Forward projects that this year’s holiday season sales growth will be the lowest in the past 17 years.
The Associated Press reported last week that the Strategic Research Group, which originally projected that 200 to 300 stores nationwide might close after the holidays, recently increased that projection by five times and now expects as many as 1,000 to 1,500 stores may close in the two months following Christmas.
The Assembly Republican long-term plan for economic growth is contained as a component in the “Common Sense Plan for an Affordable New Jersey,” which can be found at senatenj.com and njassemblyrepublicans.com.
The “Common Sense Plan” calls for expanding economic incentives to attract new, high paying jobs, establishing a preference program that guarantees a percentage of government contract work will be set aside just for New Jersey businesses, consolidating all job creation programs under the Economic Development Authority, and enacting regulatory reforms that reduce the time it takes to get approval for economic development projects.
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