Poverty Summit hears tales of New Jerseyans going without

Posted: May 23, 2012

TRENTON — When the electric company shut off Barbara Offredo’s service last spring, she used flashlights to cheer up her 11-year-old son, Joseph, who missed lights, cooked meals, and hot showers.

“Pretend we are camping,” she told him, knowing it would be eight days before she could pay some of what she owed.

Offredo, 51, of Hamilton, choked up telling the story Monday. A full-time hospice nurse and single mother of two, Offredo said she is on the brink of homelessness because rent for her two-bedroom apartment eats up half of her monthly salary.

“I’m lucky to have a full-time job working nights,” she told about 200 advocates at the Poverty Summit organized by the Anti-Poverty Network of New Jersey. “I never thought I would not have enough money to support my family.”

Each month, Offredo juggles expenses on her take-home salary of about $2,400, sometimes sacrificing utility bills to pay rent, racking up late fees. A native of Poland, she only recently learned that she qualified for assistance with her utility bills.

More New Jersey families are facing situations like Offredo’s, as a record number of residents — 885,000 — were living below the federal poverty rate in 2010, according to a study released Sunday by Legal Services of New Jersey Poverty Research Institute in Edison. Nearly one in four New Jersey residents, including those considered the “working poor,” like Offredo, struggled with poverty in 2010, the study said.

Antipoverty advocates, who held the summit in part to weigh in on the governor’s proposed budget, worry that lawmakers are already sold on cutting taxes this year, possibly at the expense of social-services programs that faced budget cuts in previous years.

“It’s simple math, right?” said Marlene Laó-Collins, executive director of Catholic Charities in the Trenton Diocese. “If there isn’t even enough revenue for the tax cuts, what’s going to happen to these safety net programs?”

Tax cuts still top the agenda in Trenton despite disappointing tax collections in April and a weak revenue projection issued by a second Wall Street credit agency Monday; Standard & Poor’s in February had cast doubt on Gov. Christie’s robust revenue projections for fiscal year 2013. A possible negotiated deal between Christie, a Republican, and Senate President Stephen Sweeney (D., Gloucester) could cost more than $1.83 million in the first year alone, with the next two years of the three-year rollout incurring higher costs for the state.

Legislators will hear the latest revenue forecasts Wednesday, as the nonpartisan Office of Legislative Services and the state Treasury Department are scheduled to testify before the chambers’ budget committees.

Antipoverty advocates have asked the Democratic-controlled Legislature to prioritize changes to three aspects of Christie’s proposed $32.1 billion budget: tax credits for the lowest earners, legal services for the poor, and affordable housing funds.

At the summit Monday, participants called on legislators to fully restore the earned income tax credit — which aids the working poor by helping them keep more of the money they bring home — to 25 percent of the federal credit in fiscal 2013. Christie, who lowered the credit, has proposed restoring it over the next three years. Democratic leaders in the Assembly and in the Senate want to restore it by July 1, the start of fiscal 2013.

Advocates also asked legislators to restore funding to Legal Services, a group that offers free legal work on issues such as landlord disputes or denial of benefits for low-income residents. The organization’s budget has been cut in half over the last two years, said Joyce Campbell, associate executive director for external affairs with Catholic Charities in the Trenton Diocese. The Assembly passed a bill in March to fund the agency, said Tom Hester, a spokesman for the Assembly Democrats.

Last, advocates criticized Christie for planning to divert $275 million in state and federal housing funds to balance the budget. The money, collected by local governments, is supposed to be used for affordable housing, they said.

Assemblywoman Bonnie Watson Coleman (D., Mercer) said Christie should not “raid affordable housing.”

“Combating foreclosures and making our state more affordable are critical for New Jersey’s economic recovery,” she said.

Assembly Speaker Sheila Oliver (D., Essex) said she wants to help the working poor by raising the minimum wage. The Assembly will vote Thursday on a bill that would increase the state rate to $8.50 from $7.25.

“This is a recognition that thousands of households in New Jersey are struggling to subsist on minimum wage jobs that do not allow them to support their families,” she said.

Christie has said he’d consider raising the wage.

As for whether the state can afford a tax cut, legislative leaders are waiting for Wednesday’s hearings.

Sen. Paul Sarlo (D., Bergen), chairman of the Senate Budget and Appropriations Committee, said the Christie administration’s estimated revenue growth of 7.3 percent in fiscal 2013 is “overly optimistic.” “We need to be responsible,” Sarlo said last week. If the revenues don’t look good, he said, “I’m going to be vocal about it.”

Disappointing April revenue numbers released last week led Moody’s on Monday to predict that New Jersey’s revenue growth in the next year will be “muted,” noting that revenues increased 2.8 percent in fiscal 2011 and 2.7 percent in fiscal 2012 so far.

“The state’s high unemployment rate [9 percent in March compared with 8.2 percent for the United States] will exceed the country’s rate through 2014, and the state’s economic recovery will lag that of the nation,” Baye Larsen, a senior analyst, wrote in a segment of the company’s weekly credit outlook.

Christie and Sweeney have reportedly reached a tax-cut compromise that would offer the equivalent of a 10 percent property tax rebate but with a higher income ceiling for eligibility, Democratic sources said. Sweeney had wanted to limit the credit to those making $250,000 or less, but the compromise deal sets the limit at $400,000. Qualifying residents would receive a credit of 10 percent of up to $10,000 of property taxes paid; the credit would be applied to income taxes, and the benefit would be capped at $1,000, sources said.

The deal also would fully restore the earned income tax credit in fiscal 2013, Democratic sources said.

The compromise hasn’t been made public yet because some Senate Democrats were caught off-guard when the governor called a news conference last week to announce the plan, sources said. The news conference was canceled and Senate Democrats are scheduled to hold a caucus meeting Thursday, said Chris Donnelly, a spokesman for the Senate Democrats.

Contact Joelle Farrell at 856-779-3237 or jfarrell@phillynews.com or on Twitter at @joellefarrell.

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