NJ Senate panel to hear bill that would increase tax on lottery winnings to fund after school programs

By Matt Friedman/The Star-Ledger

TRENTON — New Jersey lottery winners — already hit with steep taxes — would pay a little more to help the less fortunate under a bill scheduled for a hearing today.

The state Senate’s State Government, Wagering, Tourism & Historic Preservation Committee plans to take up the measure (S1767), which would add an additional 0.5 percent tax on state Jersey lottery winnings of $600 or more.

The money would be used to fund after school programs run by non-profit groups in school districts where at least 40 percent of students are “at risk.”

The bill’s sponsor, state Sen. Ronald Rice, said he hopes the bill can counter budget cuts in recent years to after school programs in urban areas.

“You talk about violent crime and these opportunities for kids — there aren’t any except for the street corner,” Rice (D-Essex) said. “It’s a real mess when it comes to funding. And then everyone’s crying about what are we going to do for these kids?”

New Jersey’s tax rate on lottery winnings is currently 10.8 percent. On the federal level, the winnings are taxed as ordinary income. The federal rate for income of more than $406,750 for a single person is 39.6 percent.

New Jersey law defines “at risk” students as those who live in households with incomes of no more than 185 percent of the federal poverty threshold. For a family of four, that’s $44,122.

The bill is scheduled for a hearing at 2 p.m.

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