Posted on 01/27/2006 7:27:42 AM PST by randita
Posted on Fri, Jan. 27, 2006
Corzine advisers calling for taxes
Their transition report has outlined unpopular budget solutions. N.J. lawmakers joined in a chorus of boos.
By Kaitlin Gurney Inquirer Trenton Bureau
TRENTON - Expand the sales tax to include clothes and online purchases. Tax 401(k) retirement accounts. Raise the gas tax. Consider a temporary increase in the state income tax.
With New Jersey's finances "perilously close to ruin," Gov. Corzine's budget advisers have recommended these unpopular solutions and more to fill what they estimate to be a $6 billion hole in the state's budget.
The grim transition report advises the Wall Street financier-turned-governor to immediately prepare plans to lay off state workers and cut government services. It also suggests that Corzine develop ways to control skyrocketing costs for pensions and schools - including raising the state's retirement age and revisiting funding for needy Abbott school districts.
"In two short decades, under both Democratic and Republican administrations, the state has gone from a financial powerhouse to a financial basket case," states the report, obtained first by the Press of Atlantic City. "While the road to decline was often paved with good intentions, the results are alarming."
Indeed, according to the six-page paper, the state faces a cumulative debt load of nearly $30 billion because past governors borrowed money to mask financial problems.
Corzine must contribute $1.2 billion to state pension funds this year just to keep them solvent, and state funds for roads, schools and open space are nearly bankrupt.
"Clearly, sacrifices will have to be made. Pain will have to be shared. There must be the political will to make substantive, structural budget changes," the report warns.
While lawmakers are fond of blaming the opposing party for the condition of the state's $28 billion budget, they universally condemned the solutions the Corzine advisers outlined.
Senate President Richard J. Codey, who as governor cut property-tax rebates but rejected suggestions to expand the sales tax and tax 401(k) accounts, said the recommendations were politically impossible.
"Now, if we do all that, who would that leave that wouldn't be pissed off at us?" the Essex County Democrat asked.
Republicans were no kinder. State Sen. Diane Allen (R., Burlington) said she hoped Corzine would "take parts of the report and throw them away," while Senate Minority Leader Leonard Lance (R., Hunterdon) said spending must be cut before tax-increase proposals would be entertained.
"New Jersey is at a tipping point," Lance said, noting that residents are already burdened with heavy property, business and income taxes. "Our residents are moving to Pennsylvania and beyond, and new taxes would exacerbate an already difficult situation."
Administration officials confirmed that their advisers had written the report, but cautioned it was a draft and that final transition reports would be released later. After winning election, Corzine consulted with a team of fiscal experts including former state treasurers and Rutgers University professors.
Corzine is expected to outline his state budget to the Legislature in March. He has selected a former associate from Goldman Sachs, Bradley Abelow, to serve as state treasurer. Abelow started work Monday.
The otherwise dour paper ends with a personal message, telling the multimillionaire Corzine that he is "a uniquely qualified governor serving at a unique time. You possess a deep knowledge of financial markets and the business community, and have expressed independence and the political will to do what's necessary and right."
Even if Corzine rejects his advisers' advice, it is important for the tax-increase and spending-cut proposals to be aired publicly, fiscal watchdogs said.
"Absent money trees sprouting on the Statehouse lawn, we have to come up with additional revenues to plug a budget deficit amounting to some $6 billion, and we need to talk about our options," said Bill Dressel, executive director of the New Jersey State League of Municipalities.
Jon Shure, president of New Jersey Policy Perspective, a liberal think tank in Trenton, said New Jersey's fiscal situation had so deteriorated that "nothing is too outrageous to consider."
"The public can handle this debate," he said. "Having all of this out there is a good thing. For one thing, maybe in comparison, the options he picks won't sound so bad."
Contact staff writer Kaitlin Gurney at 609-989-7373 or kgurney@phillynews.com.
It's a stretch to label Kean and Whitman Republicans. Nonetheless, during that time, the NJ State Legislature has remained firmly in Democrat hands.
Gee, Corzine calls for tax increases... Now, THERE'S a shocker!
What does he mean tax 401(k) accounts? We already pay taxes on the money we put in, and then on the $$ that comes out.
Taxing 401(k) accounts is a direct attack on the working class. Unrealistic that this is even proposed... but then again, those that rely on big daddy gum'ment for basic survival, have no idea what a 401(k) even is.
but seriously, THAT was funny. (wiping my eyes)
Contributions to 401K's are pre-tax. But Corzine and the voters of New Jersey are weenies.
SUN RISES IN EAST
WATER FLOWS DOWNHILL
PARIS HILTON "NOT VERY INTELLIGENT"
Etc...
You Jersey folks gonna get a dose of just what a P_O_S y'all elected.
Son graduates from high school in '09.
Pete's Wife, Husband, pets, cars, furniture, and all other posessions are outahere the next day.
GUARANTEED
That's right. I stopped working and contributing 7 years ago and I'd forgotten that. Thanks for that reminder!
Why not cut spending instead? Are there that many folk on the Jersey state payroll who are essential? Of course not.
And what's this bull durham about taxing 401(k) accounts? That's crazy. That's like drilling holes in the bottom of a boat to let out the water faster.
Stupid. Just stupid.
Why wait ? Go now before they tax the husband, house, furniture, pets and anything else you may think you own. After all, in this capitalist country, we don't own anything, we simply rent it from the government.
Philly realtors used to call these people "the Jim McGreevy fan club"
FYI, when republican Bob Ehrlich took office in MD, there was a 2 billion dollar deficit which the democrats said could only be closed by tax increases. Ehrlich vetoed every attempt at a tax increase and now the budget is balanced.
For people mad a GW Bush, ok spending is out of control, but he never increased taxes and cut them quite a bit.
I wonder if anyone is advising Corzine to attempt to eliminate the Bergen County Blue Laws (don't know if they have that power, though)...The big Box stores would love that, the proposed clothing tax would have a year of Sundays to bleed monies into the state coffers and Bergen would become a traffic congested nightmare on the only day you can reasonably drive from point to point without it taking a year and a day.
I expect they will be hiking the tolls on the GSP and the turnpike again too.
If this clown goes down that road, he'll give my Mother In Law more reason to move out of the Garbage State and move in with us.
I've got a pending nightmare and I moved out of NJ a decade ago. Thanks a lot, John.
These maggots never heard of cutting costs
Thanks for condemning the innocent with the guilty. Do you take pleasure in seeing your fellow FReepers from the Garden State (Who did not vote for this idiot) suffer?
Here in Pa. Rendell raised the state income tax right after he took office and people I talk to don't even remember it. Of course, the Republicans can't use it against him because they controlled both houses of the legislature and were willing accomplises.
Don't wait! Come on down to Texas, now! Once your son sees all of the beautiful Texas ladies here, he'll forget about NJ.
I understand they are actually using the logic this is to "prevent" a property tax increase. Corzine is "protecting" us from raising property tasxes by taxing everything else. Cut the damn budget!
Again, its called; "get out the vote"...some of y'all just sat your arses and let that P_O_S take the election - and the state.
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