NJ senator defends lottery tax bill

Two New Jersey lawmakers are under fire for sponsoring legislation that would create a new tax on lottery winnings.  

Under the legislation sponsored by state Senators Ronald Rice (D-Newark) and Jim Whelan (D-Northfield), a new tax of 0.5 percent would be imposed on New Jersey lottery winnings of $600 or more.

The revenue raised by the tax will be used to fund a program to provide competitive grants to not-for-profit entities that operate after school programs in school districts where at least 40 percent of the students are considered to be at-risk.

Rice said since the money raised would be dedicated to a worthy program, it is not a true tax. But opponents have blasted the bill and labeled it a tax increase.

"We're not adding anything to the taxpayer. We're just sharing some of the dollars with the state," Rice noted. "Whether it's a tax indirectly - I'm not going to argue it is or it's not, but to me it's not a tax."

Rice said he thinks most lottery winners would be fine with sharing some of their winnings.

"Most folks who win $600 I think would say, 'It's $600 more than we had and we appreciate that and to share one-half of 1 percent to the good fortune of young people makes good sense,'" Rice said.

When the legislation was first introduced in 2012, the Office of Management and Budget (OMB) and the Department of the Treasury estimated the tax would generate between $1.4 million and $2.2 million annually. Revenue would be dedicated to the After School Program Fund.

"The money is really going back to your own family members, if you will, or your extended family members who are in the communities in which we live," Rice said.

The money is desperately needed to help keep children off the streets because state funding for after school programs isn't enough, according to Rice.