Posted on 06/20/2004 7:28:47 PM PDT by Coleus
TRENTON - The Democrats are in charge in the capital and they want to show New Jersey what they can do when there are no obstacles - Republicans - in their path.
Just a year after an embarrassing budget-deadline-night negotiation that drifted well into the following day, the now Democrat-dominated Legislature is ambling toward the unusual event of passing a budget early.
Rest assured, that doesn't mean everyone agrees on Gov. McGreevey's proposed $27.1 billion spending plan that, for the first time in an administration plagued by budget deficits, liberally doles out money.
Here's what the majority of the majority predict will happen:
The Robin Hood strategy will prevail. A so-called millionaire's tax - an increase in the income tax for the small minority of the population who make more than $500,000 a year - will pay for bigger rebate checks to be sent to most of those who don't.
If you don't have it, borrow it. Although revenues are rising, borrowing - even more than McGreevey's proposed $1.5 billion - will be used to cover some of the increased spending. The state wants to borrow against proposed increases in surcharges for bad drivers and the cigarette tax, already the highest in the nation.
Merry Christmas.Legislators love to bring home the bucks to their districts. It's called pork in Washington. It's called Christmas tree items (and legislative or community grants) in Trenton. It won't come cheap, perhaps costing taxpayers $100 million or more in all.
Taxes, fees and more taxes. The budget right now includes an assessment for buying new tires. And car registrations would be for four years, allowing the state to collect more money up front.
Selling a home would cost more as transfer fees rise - and even more if the home sells for more than $1 million.
Also, cell-phone companies would face new taxes, as would certain health-care providers.
But unlike last year, when interest groups from one end of the state to the other paraded to the capital to demand money be restored to a shrinking budget, complaints have been minimal. The budget this year is swelling.
"I think there are many legislators who feel that in the last two budgets, we made a whole host of appropriate but painful decisions," said Assembly Majority Leader Joseph Roberts, (D., Camden). "Now that the state has turned the corner, this is the time to invest in some of our priorities."
The borrowing plan and millionaire's tax that McGreevey has proposed means Democrats can afford property-tax rebates for the middle class, charity-care reimbursements for hospitals, and new after-school programs for urban areas.
But Donald Scarry, an economist in Mount Laurel, said that means the governor has turned the corner from fiscally sound, unpopular policies to fiscally unsound, popular policies.
"But I'll say one thing for McGreevey: He's really reading the public's mind with uncanny accuracy," Scarry said. "We have a situation in which it's almost like a Kabuki being played out here: We're borrowing to balance the budget, and no one cares; we're taxing wealthy people to give away their money to others, and no one cares."
Senate Minority Leader Leonard Lance (R., Hunterdon) has voiced his opposition. But this year, it's just a voice.
Republicans, who enjoyed power just a year ago by virtue of a Senate split 20 members apiece, have been relegated to background sound.
"This is a new low," Lance said. "The Democrats control the Legislature. I'm disappointed they've chosen to pass the budget this way."
Budget committee member Sen. Thomas Kean Jr. (R., Union) said members of his party were involved only in public meetings, the real deals being cut privately among the Democrats.
"That is the ability of the majority party," he said. "There are some good things in that budget. But it's hinged on exorbitant tax increases and up to $2 billion of deficit bonding for operating expenses."
Democrats, of course, are humming a different tune.
"This all has a different tenor than the usual wrangling," said Wayne Bryant, the Senate budget and appropriations chairman. "There are still issues, but it's not a brawl. We wanted this done in an orderly and mannerly fashion this year."
He said he was "hopeful" a budget bill - the defining legislative document that spells out how the lawmakers would like to see the budget balanced - could be ready by tomorrow. Democratic leaders have set a goal of delivering their budget to McGreevey by Thursday, but some lawmakers say the deadline is overly optimistic.
David Rebovich, a Rider University political science professor, said Democrats were under tremendous pressure to hold together so the party can reach a budget consensus ahead of the midnight June 30 deadline, so they won't look like a dysfunctional family.
"The major participants recognize the stakes involved," he said. "Attempts at one-upmanship in the Legislature can have grave consequences."
That's because McGreevey has the final say on the budget, possessing the line-item veto - the ability to subtract items of his choosing.
Among the concerns the administration has is the possibility that legislators will slice the cigarette tax and force the state to use existing tobacco revenues to borrow against. Wall Street lending houses are concerned about the existing plan, but might look even more askance at that change and potentially make it more costly for the state to borrow.
State Treasurer John McCormac continues to send a message to legislators that cutting various taxes and fees and coming up with more ways to spend money won't lead to a budget agreement. They need to keep the budget balanced, he said.
Therein lies the problem. The gap between the governor's plan and what legislators want to bankroll - while scaling back taxes and the like - is not yet known.
"The treasurer's been clear: if you don't like something, replace it with a different revenue stream," said Sen. Stephen Sweeney (D., Gloucester). "We recognize we have a deadline, but I don't think anyone's on board with anything yet."
NJ running out of quick fixes to cover another budget shortfall [Jim McFlorio - McGreevey]
Realtor, Bars, And Breweries Targeted To Balance Budget (NJ)
Budget picture darkens as tax collections drop (NJ)
McGreevey's budget problem [NJ Gov race]
$27.3 Billion, $3.2 Billion more than last year, 13%
They are actually counting on President Bush's economy to carry them through the next fiscal year!
This is right out of an Ayn Rand novel.
The Democratic Party = higher taxes.
those high income wage earners will switch their residency to florida, or figure out other ways to structure their businesses to avoid those taxes.
but you have to give the Dems credit - they stick together when they have power. this tax refund gambit, plus some other "populist" stuff, may well get McGreevey re-elected.
but the soccer moms love it - since the money goes to "better schools", in the form of luxury cars that the NEA members can now afford to buy with their higher salaries.
When you hire a Democrat Governor, and then throw out the republican Senate and Republican house, so that the Democrats own all venues of Government,
What do you expect???
I'm grateful that it's only 13%.......
Bill from Nutley
McGreevey has, since being elected, raised every tax that he could. Ask the people who go to the casinos if anyone wins, and they will tell you NO. Why?, because of all of his taxes. Casinos used to pay about 90% of the money put into them. Now, with the McGreedy taxes, you don't see people winning in Atlantic City. This liberal moron thinks that no one notices, but he is wrong. Many of the people that I come in contact with go to A.C. They know that now they can only pay at a rate of about 85 %. McGreedy is just another liberal who takes everyones' money.
For now though, this pathetic constituency will have to settle for the despicable lying socialist, Jim McGreevey.
If you can, please post or point me to a list of McGreevy's campaign promises. I'm looking and it is tough slogging so far.
Does anyone else want to reach in and tear out the radio when you hear McGreedy's ads for his redistribution of wealth? I am truly amazed that he is going to get away with this. And he talks as if this is the right thing to do.
I'll look around, there may be some fr links about it. Thenderson may be able to help with this one.
Right off the bat he stated that he was going to end the tolls in 7 yrs., then after he took office; he signed a 10-yr. deal with EZ-Pass, what's hypocritical about that, is that he used the Whitman deal with EZ pass as a campaign issue.
He promised that he wasn't going to raise taxes. The first thing he did was to RAISE TAXES. He then went on to say that he wasn't going to raise Income Taxes, so he raise Corporate Taxes which trickled on down to the consumer, then the Casino Tax, which then again trickled down to the consumer.
TRENTON -- Gov. James E. McGreevey's $26.3 billion state budget for fiscal 2005 relies on illegal borrowing and is being rammed through the Legislature without adequate debate, Republicans charged Monday.
Atop the list of budget items opposed by the GOP: McGreevey's proposal to borrow $1.5 billion to fund state government beginning July 1.
"If this budget is passed and signed we will have to decide whether or not we will sue," said Senate Majority Leader Leonard Lance, R-Hunterdon/Warren. "This is an appalling proposal. It is the equivalent of mortgaging your house for groceries and it is spectacularly poor governance."
Lance, the Legislature's senior elected Republican, called for Democrats to abandon their self-imposed Thursday deadline for passage of the budget. He said the GOP would likely seek an injunction from the state Supreme Court bringing a halt to the bond sale.
The McGreevey administration maintains after two straight years of austerity packages, the governor finds himself in a position to ratify a 13 percent spending increase.
But in an 11-page decision issued Thursday, the Office of Legislative Services -- the Legislature's non-partisan arm -- said the proposal violates both the state's balanced budget amendment and the debt limitation clause.
State government is barred from bonding to cover its basic operating costs, according to the OLS decision.
One spokesman denied the governor is looking to quickly approve the sale because doing so would allow him to sidestep any legal challenge. Once sold, the high court would not be able to retroactively void the transaction.
"Every legal and financial expert we've consulted with said that this is the same mechanism we've used for tobacco bonds," spokesman Micah Rasmussen said, referring to back borrowing linked to a master settlement with the nation's largest tobacco companies. "The Legislature sets its own timetable. It's not for the governor to be OK with it or not be OK."
Sen. Wayne Bryant, Democratic chairman of the Senate Budget Committee, said he plans to push ahead with the budget plan and is awaiting a further ruling by Attorney General Peter Harvey.
During its control of the Legislature for most of the 1990s, Republicans routinely failed to introduce budgets until hours before they were voted on.
"We are just trying to do the people's business," Sen. Wayne Bryant, D-5 of Lawnside said of efforts to have the budget approved by Thursday. That would put the Legislature ahead of the June 30 deadline in the state Constitution for a balanced budget to be enacted. Each year lawmakers typically work until the last day.
"Waiting until the deadline just keeps people in a state of panic," Bryant added.
One Democrat lawmaker said he would be willing to temporarily halt the budget proceedings until it is clear whether the bonding is legal.
"If it's right there's no reason to wait. But if we rush and miss things, then I agree we should slow it down a bit," Sen. Stephen Sweeney, D-3 of West Deptford, said. "This bond is one of the centerpieces of (McGreevey's budget) and I would think he had to research it thoroughly."
The bickering came as legislators on Monday also approved another revenue-raising bill McGreevey has pushed for -- his so-called "Millionaire's Tax."
That plan would raise income tax by $800 million for the state's wealthiest 1 percent, or those earning over $500,000 annually. Under McGreevey's plan, the money would be used to raise property tax rebates for 93 percent of homeowners.
Lawmakers also passed separate measures approving lower caps on local government and school boards meant to control property tax increases.
And the illegal $2.8 billion passed to make up for Christie Whitless' 15% income-tax cuts, seems she illegally stole the money out of the Unemployment Trust Fund (federal $$) and teachers' TPAF fund.
Here come more rich, liberal Nazi Jerseyites into Eastern Pennsylvania.
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