Corzine Continues Budget Shell Game

After incurring the wrath of angry New Jersey taxpayers who realized that Corzine's plans to drop property tax relief programs, Gov. Jon Corzine has done an about face.

He's not going to whack the property tax relief programs. Instead, he's going to further increase the income tax on people making over $500,000. Corzine is seeking to increase the rate to 10.25% from 8.72%.

The original draft of Corzine’s $29.8 billion spending plan would have eliminated the deduction for all households except for senior citizens and the disabled. The proposal was billed as a one-time policy change made necessary by the recession and the toll it is taking on state revenue collections.

Corzine’s reversal affects about 1.5 million households who were in jeopardy of losing the deduction on next year's income tax filings, according to the state Department of Treasury.

The new budget, which still includes reduced property tax rebates, has drawn widespread criticism since the governor presented it to the state Legislature last week. Republicans have been calling the tax policy changes an attack on the middle class.

“I’ve been listening to New Jerseyeans and think we need to preserve this deduction to continue our flight to ease the burden of property taxes,” Corzine said. “To that end, I will adjust the budget proposal I made to the Legislature by restoring the property tax deduction to nearly 1.5 million working families.”

To make up for the roughly $240 million that would have been collected by not allowing the property tax deduction for homeowners on next year’s income tax filings, Corzine will hike the income tax rate on residents who make more than $500,000.

The new budget already sought to raise the tax rate on incomes above $500,000 from 8.72 percent to 9.72 percent. He is now proposing to hike the rate up to 10.25 percent to account for the restoration of the property tax deduction for households making less than $150,000.

The income tax hike is expected to bring in $240 million.

$240 million doesn't sound like a lot in a $29 billion budget, but here's the thing I have to seriously question. At a time when the state revenues are under strain, why is Corzine proposing increases in education spending - spreading around an even bigger amount of money than the Abbott Districts require. Corzine is increasing the education spending by spreading ... wait for it... $300 million.

So, if Corzine simply maintains last year's education spending, he can not only avoid the tax hike (or the property tax program relief, but he can save $60 million. Yet, that's not what he wanted to do. He wanted to increase spending even though the state couldn't afford it.

Corzine continues to play taxpayers for fools. And there's no one in Trenton willing to take him on and hold the line on out of control spending.