New Jersey taxpayers are hit with one of the highest tax burdens in the nation, and Corzine's solution is to whack homeowners with another tax hike courtesy of eliminating the property tax relief checks?
Corzine is calling for $943 million in cuts to the rebate program. About $600 million would remain to cover property tax rebates for senior citizens and disabled residents.It's classic.
Rebate checks this year averaged over $1,000.
The cuts are to compensate for dramatically falling revenues.
New Jersey's revenue collections will come up nearly $3 billion short of planned spending over the next 15 months if pending budget adjustments aren't made, according to a new revenue forecast reviewed by lawmakers today.
The revenue update was presented to the Assembly Budget Committee this morning by David Rosen, budget and finance officer for the nonpartisan state Office of Legislative Services.
The whole notion of property tax relief rebates was a misnomer in the first place because it is nothing more than swapping one kind of tax for another. It was expected that sales tax revenues would replace property tax revenues, but that failed to materialize, especially with the recession. Corzine's financial wizards seriously miscalculated the budget deficits and are now busy fudging the figures to try and claim that they have a balanced budget. They're using the kinds of tricks that would get a private company investigated.
Property taxes continue rising above the supposed 4% cap because communities can't afford not to - and Corzine's past prescription involved the financially risky and irresponsible call to curtail pension contributions.
The state does nothing to stop the growth of the state workforce for years on end, and curtailing spending is not in the vocabulary. Instead, they look for other taxes and fees to impose and/or increase.
For those who aren't familiar with the New Jersey tax scheme, let's remind everyone what the original property tax relief program was - the gross income tax.
That's right - it was the personal income tax that New Jersey taxpayers now pay in addition to those skyrocketing property taxes. Corzine's solution to the property taxes that have not been curtailed by the personal income tax revenue contributions was to increase the sales tax further to cover the rebates.
It's a sham, and New Jersey taxpayers continue electing politicians who refuse to cut the state budget and state workforce down to size, primarily because the unions representing state workers have such a cozy relationship in Trenton that little is done.
Did anyone miss the state workers that were furloughed yesterday? I'm sure a few people who didn't hear about the furlough were caught off guard as they attempted to go to the Motor Vehicles Commission. However, the state can wring out serious savings by cutting the workforce instead of issuing furloughs.
I'd suggest taking a page from Utah. Cut the state work week to Monday through Thursday and increase the hours to 9-6. Utah is making it work, and it has added benefits for reduced congestion, improved efficiencies, and lower costs, which means it will not be considered here.
Corzine's people now claim that they've cut another $2 billion from the budget, bringing it down to $28 billion, but that's nonsense. They continue pushing money into the FY 2009-2010 budget, and further curtailing the pension payment obligations, meaning that the shortfall for those state workers who have accrued benefits will run short. In fact, the state is contributing only 10% of what is needed.
Oh, and they'll be raising taxes on those making more than $400,000 even higher than it is currently. That hits 1% of New Jersey taxpayers, but they pay a significant portion of the state's income tax obligations.
None of this will make living in New Jersey any more affordable (although it remains a relative bargain compared with New York).
Revenues are down sharply, and there's no amount of tax hikes that will save that situation. Increasing taxes will result in compounding the recession and reducing the disposable income of those hit by the taxes, that is if they don't decide to move elsewhere.
Corzine is mortgaging the future on risky business ideas that are unsupportable, untenable, and risk financial ruin.
State Republicans are incapable of doing anything to stop this mess either. There will be a reckoning in the state, and it wont be pretty.