Here Come the NJ Tax Hikes

It's July 1, which means taxes in many states are set to rise. New Jersey is no exception.

Here, we've got tax hikes on cigarettes, wine and hard liquor, personal income taxes, corporate income tax, insurance premiums, and a whole host of other fees to help balance a budget that is still out of whack because it includes structural deficits and obligations that have been shifted to future years.

All those taxes hit across the entire economic spectrum. Corporate taxes get passed on to consumers. People from all income levels buy liquor, wine and cigarettes. Everyone is affected by the insurance tax increases.

Throw in the cuts to the property tax relief program in New Jersey and the middle class got whacked by this state budget, particularly if you made $75,000 or more (which may sound like a lot for the rest of the country, but which is an amount that many will struggle with in the high cost of living here in the NY metro area).

UPDATE:
Around the country we're seeing states fail to enact budgets on time because of an inability to figure out how to balance the budgets. The delays mean that the states will incur additional costs for borrowing until the budgets are in place. In most places, the balancing includes demands for tax hikes, but some state legislators or governors are opposed to any additional hikes:

In Connecticut, Gov. M. Jodi Rell signed an executive order to keep the government running without a two-year budget in place. While she contends the average taxpayer won’t notice any change, municipal officials fear delays in state grants that fund everything from road repairs to education.

In Arizona, House lawmakers approved nine bills late Tuesday to implement most of a compromise budget negotiated with Gov. Jan Brewer. But they omitted two controversial tax proposals, including a sales tax increase that Brewer has insisted on. The Senate followed by giving the same Republican-drafted bills preliminary approval.

In Pennsylvania, state workers will receive only partial pay on July 17 and July 24, after which paychecks will be withheld entirely until the impasse is solved. They will then be paid retroactively.

Gov. Ed Rendell said 10 banks and credit unions have agreed to help 69,000 state employees by offering them low- or no-interest loans and lines of credit.

In most states, the debate centers around whether states should be raising taxes to bridge the budget gaps. California Gov. Arnold Schwarzenegger said he wouldn’t sign anything that raised taxes or fees beyond what he has already proposed.

“They should forget about that,” the Republican governor said, accusing Democrats of going through a “song and dance. Let’s get to work, fix it.”

State Controller John Chiang has said he would have to start issuing the IOUs on Thursday unless lawmakers took steps to stem the state’s red ink by then.

California is in the worst position, and it is the direct result of decades of overspending and hoping that no one would notice the taxes had made the state prohibitively expensive. Now that revenues are significantly off, raising taxes isn't even an option.