LEGISLATIVE FISCAL ESTIMATE TO

[First Reprint]

SENATE, No. 616

STATE OF NEW JERSEY

DATED: JULY 9, 1996

      Senate Bill No. 616 (1R) of 1996 amends the provision of the "New Jersey Gross Income Tax Act" governing the amount that a taxpayer may elect to contribute from the person's State income tax liability to the "Gubernatorial Elections Fund", which is the fund from which moneys are paid to support public financing for qualified primary and general election candidates for the office of Governor. The bill would replace the current single contribution option of $1 with three alternative levels of contribution, $1, $3, and $5.

      The bill also provides for future adjustments in those checkoff options to reflect the increase in the cost of living. Computation of the amount of the increase would be done quadrennially on the same schedule as applies to the calculation of the cost-of-living adjustments currently applicable to other amounts under the gubernatorial campaign finance statute; the actual checkoff amount would be set by rounding the adjusted figure so computed to the nearest whole dollar amount.

      The bill would take effect on the January 1 following enactment and be applicable to the taxes due for the year of enactment.

      In its evaluation of Assembly, No. 1872 of 1994, a bill that was substantially similar to S-616 (1R) except that it simply increased the checkoff to $5, the Election Law Enforcement Commission (ELEC) estimated that there would be no fiscal impact on the commission if that bill became law. There would, however, be an impact on the Gubernatorial Elections Fund, which currently generates approximately $1.5 million per year. ELEC figured that the amount of money contributed to the fund would increase fivefold, or $7.5 million per year, if the current number of taxpayers continue to select the checkoff.

      The Office of Legislative Services (OLS) concurred with ELEC's evaluation of A-1872, but noted that the bill was amended to permit three possible contribution levels rather than one. Also, OLS noted that the number of taxpayers selecting the checkoff has declined steadily since its introduction and would probably continue to do so. As a result, OLS argued, the amount of money generated for the fund by the checkoff per year and over time may be less than estimated by ELEC.

      OLS holds the same views with regard to S-616 (1R).

The legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

This fiscal estimate has been prepared pursuant to P.L.1980, c.67.