Are You Ready For Tax Hikes in NJ?

Say your prayers rabbits because we're gonna be seeing some serious tax increases in New Jersey.

Gov. Jon Corzine is planning more than $2 billion in spending cuts, along with major tax increases that could include an additional penny to the sales tax, to balance the next state budget, a top administration official said yesterday.

The cuts include $100 million from higher education and a freeze on state aid for most school districts. That would increase the pressure on municipal officials to raise property taxes and on colleges to raise tuitions.

The cuts are a fraction of the $28 billion budget and don't even scratch the surface of the structural debt inflicted on New Jersey taxpayers by the McGreevey and Codey administrations and their prodigious spending and use of gimmicks to 'balance' the annual state budgets.

Instead, New Jersey has to repeatedly look to raising taxes to just make ends meet. New Jersey imposed a wide ranging and comprehensive overhaul of the corporation business tax in 2002, and the state's fiscal status has not improved with the additional revenue that has come in because spending has continued to outpace revenues.

And even with the tax increases, it's not a given that we'll end up with a balanced budget:

"You are going to hear the howling near and far," said the official, who is familiar with the budget planning and discussed it on condition of anonymity.

The official said Corzine has not settled on the mix of tax increases but that they will generate less than $2 billion. The source said it is "likely but not definite" they will include sales tax changes.

Four other Democratic sources said the governor, who personally briefed Democratic leaders on the budget Monday, is considering raising the 6 percent sales tax to 7 percent and extending it to some untaxed services. Those two moves alone could net about $1.4 billion.

And for someone who claims to want to help the little guy, Corzine's sales tax increases will adversely affect lower class and middle class taxpayers disproportionately. So, how does Corzine deal with that? Raise taxes in other areas to lessen the burden on those citizens at the lower end of the economic spectrum, which may even things out at the bottom, but the higher income taxpayers are getting hosed. As are the higher income municipalities who see less state aid for education and must raise taxes to balance their own budgets.

Nothing is set in stone, but needless to say Corzine will find it easier to raise taxes than he will in cutting the bloated state budget in any meaningful and structural manner that will improve the state's fiscal picture going forward.

And one of the things New Jersey taxpayers ought to look at is whether their representatives are giving taxpayers their money's worth.

EnlightenNJ has more.