Many North Jersey businesses depend on the traffic that comes in because of the favorable tax rates compared to New York. Paramus, New Jersey is one of the heaviest concentrations of retail shopping in the entire nation. Garden State Plaza is only one of four major malls within a few miles of each other (Riverside Mall, Bergen Mall (extensive renovations are underway), and Paramus Park being the others). Now, the article for GSP is from 1999. Since then, the construction has been completed, and new major stores have opened in the area, including a huge Ikea/Christmas Tree Shops/Bed Bath Beyond, and Sports Authority complex right across from the Garden State Plaza. Business up and down the retail corridor is booming.
Imagine a huge shopping mecca with hundreds of stores of all sizes and shapes, many of which sell clothing that is exempt from tax. People come from all over the Tri-State region to shop in Paramus because of the tremendous concentration of stores. Routes 4 and 17 are busy Monday through Saturday throughout the day because of shoppers going from store to store, mall to mall looking for deals. Now imagine what imposing a sales tax on clothing will do for the businesses. Many may see a drop off in traffic from outside the immediate area. Companies and businesses may choose to locate elsewhere because the taxes reduces traffic flows. Those that can't relocate may simply close up because of lost revenues unable to support the high rental costs in North Jersey.
Indeed, throughout New Jersey, retail is doing quite well. But don't expect it to last if the taxes go up. That rosy retail picture can quickly change if the imposition of sales tax drives off consumers to other places - like New York's Woodbury Commons, Palisades Center, or New York City itself.
And it doesn't get to the core issue: there's no way that the sales tax alone will cover the gap. This means that there's going to be quite a few other taxes and fees that will be raised:
The Motor Fuels Tax;
Mortgage Recording Taxes;
Estate and Gift Taxes;
DMV fees;
The Gross Income Tax (Personal income tax);
Corporation Business Tax;
Alcoholic Beverage Taxes;
Cigarette and Tobacco Products Taxes; and
Sales and Compensating Use Tax
And if tax increases on those taxes are insufficient, the Legislature and Governor will consider brand new taxes. Like an income tax surcharge (another way of saying income tax increase) but claiming that it would be a temporary measure.
Make no doubt about it. No matter how much any of those taxes are increased, it will not solve the budget woes. Only though cutting spending, in conjunction with a judicious application of limited tax increases can New Jersey get out of the huge budget hole.
One must keep in mind that the primary reason that New Jersey is in the current mess is that the state spent its way into massive debt. It was not for a lack of revenues - as New Jersey had seen revenues come in ahead of projections due to an improving economy. Trenton simply went nuts with spending on programs without a care as to how any of it would be paid.
Well, the bill has come due, and everyone is going to have to dig deeper to pay for pretty much everything.
Enlighten NJ has much more on the budget situation. It isn't pretty. And Gov. Corzine and the legislature are going to have to make tough choices, but I have no doubt that they'll take the easy way out. They wont cut spending and they'll increase the 'sin taxes' and selected taxes that they think most people wont notice.
Well, I'd notice. And so will alot of businesses and taxpayers who will see that not only have the promises to fix the property tax mess broken, but that all other manner of taxes will have been increased.
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