Posted on 01/27/2006 8:43:15 AM PST by Irontank
Budget advisers have suggested that Gov. Jon S. Corzine add sales tax to more items and raise the gasoline tax because the state’s finances are "perilously close to ruin.’’
In a six-page report submitted this month, the advisers urged the increased sales taxes, as well as immediate cost-cutting, including a freeze of state work force levels and "symbolic’’ pay cuts for all nonunion state workers, adding that layoff plans should be prepared.
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Corzine called it an "interim report’’ and that no policy has been set.
"We’re going to scrub the budget with absolute focus in the next few weeks and months before we present a budget to do everything we can to find savings on the spending side before we move to any kind of consideration of tax increases,’’ Corzine said in an interview yesterday with Associated Press editors and writers.
Corzine, who took office Jan. 17, said he has already reduced the number of jobs on the governor’s staff and instituted a statewide hiring freeze, except in certain areas such as child welfare.
"The chief of staff is going to sign off on every hire,’’ Corzine said. "We’re serious about the expenditure side of the budget.’’
"It is clear that we are spending more than we are taking in on a structural basis, on a regular basis in the state, when there is a relatively healthy economy. Relatively. It’s not a booming economy, but it’s not sick and we’re still out of balance, so there’s something wrong here,’’ he said.
The budget proposals were reported by The Press of Atlantic City in Thursday’s editions and later obtained by The Associated Press. The report reiterated the new governor’s contention that basic changes to budgeting are required.
"In two short decades, under both Democratic and Republican administrations, the state has gone from a financial powerhouse to a financial basket case,’’ the report stated.
To expand the sales tax, the budget group urged Corzine to "close illogical loopholes and exemptions’’ such as those on tanning and massage parlors, limousine services, and cable television.
It said the elimination of bigger exemptions, such as that for clothing, must be considered.
The budget group also said the state must lobby Congress for federal rules that would permit taxation of purchases on the Internet, including music and software downloads.
The report gave no estimate of how much additional revenue any of those steps would bring.
It recounted the current situation, in which the state has almost $30 billion in debt, another $30 billion in unfunded liabilities for its retirement and health care programs, and a Transportation Trust Fund that will be drained by July 1.
"Make no mistake: failure to implement fundamental change will have grave consequences, including a further downgrading of the state’s debt rating and therefore higher borrowing costs; skyrocketing property taxes due to a reduction in state aid and rebates; and reduced state services in order to pay for mandatory debt service, pensions, health care costs and more,’’ the report said.
Republicans quickly demanded that the new Democratic governor focus on spending cuts.
A GOP leader on budget issues, state Sen. Leonard Lance, R-Hunterdon and Warren counties, said he was glad that the report recognizes that past budget practices cannot continue.
Assembly Minority Leader Alex DeCroce, R-Morris and Passaic counties, said yesterday, "We ask Governor Corzine to eliminate wasteful spending before he considers more tax hikes on our state’s overburdened taxpayers.’’
Sen. Anthony Bucco, R-Morris and Passaic counties, said, "It is appalling that the new administration would even consider raising taxes on essential items such as clothing.’’
Corzine maintains that a "structural deficit’’ has left the budget for the fiscal year to start July 1, expected to be about $28 billion, nearly $6 billion short. He has pledged to avoid one-shot fiscal "gimmicks,’’ but has not yet announced specifics. The governor must present a balanced budget to the Legislature, which must approve a budget by July 1.
The budget group said that if spending cuts and sales tax increases cannot balance the new budget, it "reluctantly’’ recommended a "temporary tax-rate surcharge.’’ The report does not specify whether such an increase would be applied to sales, income or business taxes.
Corzine has said that an increase in the gasoline tax would be a last resort. The tax is a key revenue source for the state’s Transportation Trust Fund, which has funded billions of dollars in road and rail projects.
Yep!
Lived in NJ for 10 years.
Didn't use to be so liberal, don't know what happenned.
At one time the majority of Congressional Delegates from NJ were Republican.
Now it is equaling Minnesota and Massachusetts.
The Horror! The Horror!
Kerry State Ping!
transplants from Philly and NY would be my guess
If this is true, the previous Governor should be arrested and hanged.
ML/NJ
One of the reasons I left that (mostly, beautiful state) years ago.
Good luck to you and yours.
They are trying to notify the state workers union of how dire the situation is, but geesh, no union has good ears for hearing about pay cuts. So they will have to have layoff.
Along with the voters of the People's Republic of Joisey who voted in Mayor McCheese and then figured it would be a good idea to replace him with another hard left RAT.
I have lived in New Jersey for most of my life. It really is a great and beautiful state despite all the ignorant "Jersey" jokes.
Unfortunately in the last 10 years, it has become a mecca for liberals looking to escape New York City so they can ruin some other place. Couple these liberal intruders with a large number of solidly democrat city dwellers in Newark, Jersey City, Trenton, Camden etc. and you have a recipe for disaster.
Conservative suburban and rural counties are totally outnumbered come election days when the NJ democrat machine goes through inner city blocks dragging every available voter (living or dead) to the polls.
The fact that New Jersey's state finances are "close to ruin" is inexcusable. New Jersey is the second wealthiest state (per capita income) in the United States and is home to some of the largest corporations in the free world. It is a leader in medical and technology research, banking and other fields. The standard of living for most people is here is very high.
New Jersey should be one of the healthiest states in terms of fiscal policy but uncontrolled local and state spending is going to kill the goose that laid the golden egg.
I don't see it changing anytime soon though, there are just too many people here with their hands out and they control Trenton.
Substitute "Maryland" for "New Jersey" in your posting and you will find that this sad situation is occuring throughout the U.S., much to the detriment of decent outlying locations. Liberals continue to flee the governments and societies that they have irreparably screwed up and set up shop in other states to repeat their flawed views on society. A quick trip to Annapolis and other state capitols which show an alarming number of liberal carpetbaggers who are not natives of the state and predominantly originate from the Northeast. From all appearances, this political pollution will continue in the future as their home base continues to crumble.
But he's a "Gay American," so that pretty much will protect him from any consequences.
He was the 2nd previous Governor, but maybe he should hang too?
ML/NJ
no surprise here, democraps run the state. big budgets, out-of-control spending, budget gimmicks, selling GO Bonds to fund the budget, Christmas-tree items, pork, business taxes, hotel fees, fees on tires, etc.
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