Friday, January 2, 2009

NJ's New Budget, or the Same Old Budget?

Since King Corzine has a new taxbillbudget he's handing to tax payers, I thought I'd share this story from 2006 that I had saved away in my "this will happen again" folder... I'll of course add my $0.02 in where I feel so motivated to do so... enjoy and note the date of the original story which I copied/pasted from back in the day: Tuesday, March 21, 2006. Emphasis is mine where you see it.

Corzine to ask for state's first $30B budget
Plan entails a variety of cuts and tax hikes
Tuesday, March 21, 2006
Star-Ledger Staff
Gov. Jon Corzine today will propose a state budget that tops the $30 billion mark for the first time, increase the sales tax and place new or higher taxes on cigarettes, alcohol, luxury cars and municipal drinking water.

Treasurer Bradley Abelow said the tax changes would raise $1.5 billion, most of that from the sales tax, which would increase to 7 percent from 6 percent. He said that would cost a typical family about $212 more a year. The tax also would be extended to some new services; the treasurer said yesterday he could not provide a final list but stressed they would not include clothing or food.

So to make sure we're all on the same page... Sales tax went from 6% to 7% to raise $1.5 BILLION and conversely what happened is that we're looking at a, tripled, $1.3 BILLION deficit now instead. More taxes is NOT the solution. If only the King would humor the jesters and try lower taxes and cutting state workers and programs instead.

Legislative leaders immediately expressed reservations about raising taxes.

"We're going to re-scrub the budget," said Senate Budget Committee Chairman Wayne Bryant (D-Camden). "The last thing we will consider is any revenue raisers."

Abelow said the administration made an "honest attempt to come to grips" with the state's chronic budget problems in the $30.9 billion spending plan, avoiding stopgap fixes that marked previous administrations.

While the proposed budget is $2.6 billion higher than the one in effect through June 30, nearly half of that -- about $1.1 billion -- would be used for payments to a public-employee pension system that governors have virtually ignored for a decade.

Hey... would that $1.1 BILLION for the pension system be the same pension system that is "at least" a $25 BILLION bind?? hrm, seems like that didn't work so well either. Following the Whitman, Florio, McGreevey plan doesn't work. Might I suggest cutting the size of government again?

Nearly all of the state departments face cuts, and the state work force would be reduced by 1,000 -- including 300 layoffs of state workers not protected by civil service.

Ahh ha.. I knew someone would make those cuts, right! Appears only sort-of/kind-of as the number of N.J. employees making more than $100K a year nearly doubles in two years. Seems from April 2006 to April 2008 the state shed 5.5% of the workforce but salaries rose 5.7%. New idea, cuts jobs, doesn't give the newly available funds to old cronies as a pay raise.

Abelow said the budget would have been far higher if the administration had not used real cuts, freezes and other cost-containment measures.

"Real cuts"? "freezes"? "cost-containment measures" Hrm. I suppose cutting 5.5% of staff and somehow still paying 5.7% more in salary fits. No?

"If we did not do what is proposed in this budget, you would have $2 billion more in spending," he said.

Well it's "ONLY" a $1.2 BILLION shortfall so maybe this guy was right? It could have been a $2 BILLION shortfall instead. Maybe the King should raise our taxes so more? HAH! hrm, maybe I shouldn't offer such sarcastic advise, it could be taken.

In addition to the first sales tax increase in 16 years, the administration wants to boost the cigarette tax 35 cents to a national high of $2.75 per pack, raise $12 million by boosting wholesale taxes on wine, beer and liquor, and an impose a new water tax.

The water tax of 4 cents per 1,000 gallons will be collected from water utilities to pay for improvements to the state's water-distribution systems. It is expected to add $3 to $4 to the average homeowner's yearly bills.

Improved water distribution system? Where? Seems like I know some folks paying well above $10K per year in property taxes in towns where they have well water because there is no city water. Imagine their property taxes if they had to pay for city water too! ouch.

Owners of luxury vehicles -- those costing $45,000 or more -- would pay higher registration fees. Corporations would pay a new 2.5 percent tax surcharge, and a new tax would be slapped on the sale of commercial property.

My apologies to GM, Ford and Chrysler. Here I thought people weren't buying your products because they were over priced junk. I seem to be wrong and people weren't buying them because they were trying to avoid even higher costs on owning private property in this state. Way to go King, you took out the American made SUV market with your tax tax tax plans!

On the other hand, the administration wants a tax cut for 600,000 families earning less than $30,000, at a cost of $105 million. Among those, the 400,000 residents who earn $25,000 or less would pay no income tax. Currently the threshold is $20,000 for a family of four.

I have another idea. How about a tax cut on those businesses so that a little more cash is available to pay employees more than $6.55/hr (min wage) since you'd need two people in a household earning min wage to be under the $30,000/yr mark. I somehow doubt that there are really 600,000 families somehow affording to live in NJ legitimately earning less than $30,000/yr. I'm sure a few file as such, but I'm also sure they are making some unreported money "on the side". Good for them I guess, wish I could earn some tax free money on the side and then get a break for it.

"We've done everything we can to minimize the impact on those who are most vulnerable and least able to take care of themselves," Abelow said.

The administration, however, wants to charge families from the poorest school districts a sliding scale fee to use after-school and summer programs, to raise $30 million. The budget also would net $13 million by charging Medicaid recipients a $2 co-payment per prescription drug, up to $10 per month. Medicaid patients using emergency rooms for nonemergency health problems also would pay a surcharge, saving the state $1.1 million.

MILLION! Whoa! Whats a million? They know what that is in Trenton/Washington? I thought they only count in BILLIONS and TRILLIONS now?

Abelow said the budget includes only $50 million for new programs and $80 million in new capital spending.

In addition to cutting $169 million in state aid to colleges and universities, the state will not reimburse schools for $125 million in expected salary and fringe-benefit increases.

College officials expect the cuts to hurt worse than the reductions made during the Whitman and McGreevey administrations, which led to double-digit tuition increases at colleges around the state.

"It will be a disastrous blow," said Darryl Greer, executive director of the New Jersey Association of State Colleges and Universities. "It will be the bleakest budget proposal I've ever seen and one of the worst I've seen in American higher education."

Bryant said the Legislature would take a hard look at the proposed tax increases and planned cuts in higher education funding. He said it would be "premature for us to actually commit to any revenue raisers" until lawmakers can assess the state's revenue outlook over the next two months. Last year, an uptick in revenues enabled lawmakers to drop nearly $600 million in proposed tax increases.

Bryant said that while some grants for lower-income students would increase, he worries the other cuts would result in tuition increases for the lower-middle class. "We're going to take a long look at colleges and universities; that seem in many ways to be hit the hardest by this budget," he said.

Bryant also said he was concerned that proposals for higher alcohol taxes and a tax on public water supplies, while raising very modest sums for the budget, could hit lower-middle-class families the hardest. "Those are Joe Six-Pack issues you have to look at."

Senate President Richard Codey (D-Essex), who wrestled with similar issues last year as governor, said the proposals are a commendable starting point that will be subject to "negotiation and compromise."

"Overall the governor has done an excellent job of proposing a budget that goes at the heart of the matter -- the structural deficit. He's made some hard choices, to his credit," Codey said.

But Senate Minority Leader Leonard Lance (R-Hunterdon) said the virtual freeze on state aid for towns and schools would result in higher property taxes for homeowners. Coupled with the sales tax increase, he said, the budget would hit the middle class hard.

"New Jersey families are fleeing this state, moving to Pennsylvania and beyond because of our tax structure," Lance said. "This will make New Jersey even more unaffordable for New Jersey residents."

Is Lance running around yelling "I told you!"? He should be. I don't know much about Mr. Lance other than that unlike me, he was elected to Congress this year, so best of luck to him. Hopefully he obeys the Constitution and fights to restore our civil liberties, end a few taxes, cut a few programs, etc.

On the eve of Corzine's budget message, Bogota Mayor Steven Lonegan, a former gubernatorial candidate, announced he would lead a citizens group to challenge any tax increase or the expansion of government programs.

"We cannot tax our way to prosperity," said Lonegan.

YAY FOR MY PAL STEVE LONEGAN! Steve Lonegan has been a long time friend of all NJ tax payers, sadly some just don't know it. Steve hopes to be our next governor and I believe that Steve is the most qualified candidate who has entered the race and can deliver for the tax payers of NJ. 

If you would like to help Steve Lonegan get elected so that he can undo the Damage caused by previous administrations, please Donate what you can to the Lonegan Campaign.

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