| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Record, Gannett/Asbury Park Press; Home News Tribune, et al, Star Ledger
Sales tax hike fading
Tuesday, June 20, 2006
Raising taxes on Atlantic City casino revenue and cutting back on a promised payment to public employee pension funds are among the last-minute options legislators are exploring to replace Governor Corzine's plan to raise the sales tax to 7 percent, lawmakers said Monday.
Mounting opposition to Corzine's sales tax plan, which, if enacted, could cost the average family $260 more next year, has triggered a scramble with only 11 days left before the budget deadline set by the state constitution.
Some options are certain to rankle powerful special-interest groups, especially state workers, firefighters, police and teachers who descended, 6,000 strong, on the State House on Monday, demanding that Corzine's planned $1.3 billion payment for pensions remain intact.
"I'd be willing to pay more taxes, because we owe it to the people who put the money in [the pension system]," said Robin Levine, a middle school teacher who has taught for 20 years in
But as the demonstrators blew whistles, chanted and cheered speeches made by Corzine and legislators in the 90-degree heat outside the State House, lawmakers inside the building considered cutting the pension payment, possibly by as much as $400 million.
The cut would help replace the $1.1 billion that would have been generated by raising the sales tax to 7 cents for every $1 on most consumer goods and services. The tax is currently 6 cents on the dollar. Corzine, meanwhile, has shown no sign of backing down from his plan to raise the sales tax for the first time in 16 years.
"We are trying to get recurring revenues, the money coming in, to match the money going out, as opposed to just using the same old song about gimmicks and borrowing and forced increases in taxes," Corzine said. "Now, I don't have a choice this year, in my view. It is a last resort."
Corzine met with Assembly Speaker Joseph Roberts, D-Camden, and Senate President Richard Codey, D-Essex, but came away with no final budget deal.
"I think we're making some progress," Codey said. "We're not there yet, clearly. No yelling, no shouting. Calm, reasonable approaches to how we can have a budget by June 30th."
Although Codey acknowledged that some senators support the sales tax increase, Roberts, speaking at the same news conference, called it all but dead in the Assembly.
Instead, Assembly members and their staffs are looking at the possibility of expanding the sales tax to other items and services. Roberts declined to detail what products could be taxed, but recent expansion efforts have included landscaping services, tanning salons and golf club memberships.
"I think there's some support for that," Roberts said, calling it a "sales tax modernization." But Roberts said there is no support to tax lawyers, accountants and other professionals for their services.
Most of what Roberts and his Assembly budget experts have offered Corzine focuses on yet-to-be-named "cuts and efficiencies," the speaker said. They are, however, ready to consider possible increases in other taxes. Several lawmakers in both the Senate and Assembly are pushing to collect more money from casinos.
"As we have these discussions, we need to keep as many things as possible on the table," Roberts said.
Corzine has told lawmakers privately that he is not willing to accept more taxes on casinos or other businesses.
Although
Corzine has been cool to the idea. But some observers said the tax revenue could provide a needed windfall for social programs and other budget needs.
Public employee unions, which wield significant clout with campaign cash and election-season manpower, pushed their way into a State House plaza Monday in a massive lunch-hour show of support for Corzine's budget, many of them arguing that the state should fix its budget problems without shorting their pension funds.
Corzine himself was one of the cheerleaders who took to the podium and helped whip the union members into a cheering, noise-making frenzy.
"I hear you, and it's time for other people in the State House to hear you," Corzine yelled.
Corzine assured union members that he supports their benefits in the current contract, but he has said he would push for concessions when new agreements are negotiated next year.
Among the demonstrators were state workers and teachers from across
The demonstration was organized to back Corzine's proposal to contribute $1.3 billion to the state's pension system, which has not been funded in nearly a decade. Without the contribution, analysts project that the fund will face an $18 billion gap between retiree payouts and available funds because of stock losses in the pension portfolio and the fact that there has been little or no state contribution to the fund in recent years.
Protesters blew whistles, waved placards and cheered a succession of political figures and union leaders whose amplified voices echoed across
"We're trying to keep our pensions for our kids," said Ernestine Dixon, a cafeteria worker at the
Many protesters donned bright red or green T-shirts emblazoned with the name of their public employee union and a slogan supporting a policy proposal. One read: "New Jersey Needs Affordable Education."
Speaker after speaker took the microphone, including a line of union officials and Corzine, who promised to fight for the workers' cause. Others speakers included state Sen. Shirley Turner and Assemblyman Reed Gusciora, both Democrats, and Assemblyman Bill Baroni, a Republican. All three represent areas of
Protesters endured nearly 90-degree heat to attend the rally, which state police said was the largest
Robert Fusco, a math tutor at
"The pay wasn't as good, but the benefits and the pension are better," Fusco said. "I worked in private industry – no pension, no benefits for over 15 years."
Corzine and Senate brass want sales tax hike
Posted by the Asbury Park Press on 06/20/06
BY JONATHAN TAMARI
Assembly members are instead leaning toward "modernizing" the sales tax, which could mean expanding it to more items. Cutting the state payment to public workers' pension funds and taxing casinos are two other options that have been discussed.
Leaders of the two houses said they are making progress to work out their differences, although it appears there may still be debate about the use of "one-shot revenues" which can be counted on one time only, leaving deficits in later years.
"I still believe that the sales tax (increase) is necessary and viable," said Senate Majority Leader Bernard Kenny, D-Hudson.
Corzine said in a radio appearance that the Assembly alternatives to the sales tax hike would rely on gimmicks similar to the ones that have led to annual budget deficits.
"We are trying to get recurring revenues, the money coming in, to match the money going out, as opposed to just using the same old song about gimmicks and borrowing," Corzine said on 101.5 FM.
Assembly Speaker Joseph J. Roberts Jr., D—
But he said there is "growing sentiment" for sales tax modernization, which would provide recurring revenues. Senate President Richard J. Codey, D-Essex, said modernization would not include taxes on professional services such as lawyers.
If Codey and Kenny plan to support the sales tax increase, they still have work to do to convince enough members of their own caucus to go along. In a house where Democrats hold a slim margin, at least three Democratic senators have openly expressed doubt about the plan.
"I think it's absolutely dead," said Sen. Stephen Sweeney, D-Gloucester.
Sen. Shirley Turner, D-Mercer, and Sen. John Adler, D-Camden, have also raised concerns.
Codey, however, said the majority of his caucus supports the tax hike and that any opposition will also have to convince Corzine to drop the plan.
Codey and Roberts met with Corzine in the afternoon and held a joint news conference later in the day, striking a far different tone than a year ago when the Senate and Assembly neared open conflict over the budget.
Some alternatives discussed in the Assembly include cutting the state's contribution to the public workers' pension system by $300 million or taxing casinos, said Assemblyman Reed Gusciora, D-Mercer.
Asked by a reporter about raising taxes on casinos or businesses, Roberts said, "We need to keep as many things on the table as possible."
As lawmakers eye potential savings by cutting into a proposed $1.3 billion contribution to state-funded pensions, roughly 6,000 teachers and public workers jammed into a Statehouse courtyard to protest any changes.
"We need to put the heat on anyone who doesn't want to fund our pensions," said Joyce Powell, president of the New Jersey Education Association, the state's largest teachers' union.
Workers waved signs reading "A Deal is a Deal!" referring to calls for worker givebacks.
An emphatic Corzine addressed the crowd. He vowed to honor the current union contracts and took a swipe at lawmakers who have called for union concessions before the next round of negotiations.
"Those who would cripple collective bargaining do a disservice to democracy," Corzine said. He later told the cheering crowd, "I stand with you. I'll fight with you!"
Corzine relented on his plan to tax hospitals $430 million. Legislative leaders said the plan had no support. That means lawmakers must come up with another way to raise that sum or cut it out of the budget, in addition to the $1.1 billion they need to eliminate the sales tax hike.
Codey said the two sides are close to agreeing on which taxes to include. He and Roberts said they hope to meet the June 30 deadline for striking a budget.
Jonathan Tamari: jtamari@gannett.com
Budget standoff in Trenton
Corzine orders plans for state government shutdown
Tuesday, June 20, 2006
BY JEFF WHELAN AND JOSH MARGOLIN
Star-Ledger Staff
Facing an impasse with Assembly Democrats over his proposed sales tax increase, Gov. Jon Corzine yesterday refused to budge and ordered his Cabinet to prepare for a government shutdown.
It was a day of tough political talk, closed-door meetings and a noisy rally that brought thousands of public employees to the Statehouse complex to cheer the governor's plan. At day's end, legislative leaders stressed that they were working with Corzine to resolve their differences, but there was no immediate sign of compromise.
Facing a July 1 deadline to adopt a balanced budget, the Democratic governor sought to cast Assembly Democrats as fiscally irresponsible and said there was no choice but to raise the sales tax from 6 percent to 7 percent to bring in $1.1 billion.
"We are trying to get recurring revenues, the money coming in, to match the money going out, as opposed to just using the same old song about gimmicks and borrowing," Corzine said in a fiery speech to the labor rally. "Now I don't have a choice this year, in my view. It is a last resort."
Leaders of the Democratic majority in the Assembly last week bluntly told Corzine that the sales tax proposal was dead in the lower house. Assembly Speaker Joseph Roberts (D-Camden) reiterated that to reporters after a private meeting with Corzine yesterday. A recent poll showed voters oppose a tax hike to balance the budget by nearly 2 to 1.
"There is not support for it," Roberts said.
In his first public remarks since his tense meeting with Assembly leaders Friday, Corzine took aim at their stance during an appearance on Jim Gearhart's morning radio show on NJ 101.5.
Corzine said the Assembly has made "some good suggestions which we want to incorporate." But he also said their proposals -- which have not been made public -- would leave a $1 billion hole in next year's budget and not make a break with the fiscal policies of the past that have caused chronic multibillion-dollar budget gaps.
"The Assembly has basically come back with a proposal that looks to me like more of the same that we've seen over the years," Corzine said.
In contrast, Corzine said the Senate's suggestions are more in line with his plans, and he praised Senate President Richard Codey (D-Essex), who served as governor last year.
"Senator Codey is working very hard to try to have, I think as he worked to have, a more honest financial package. The Senate's proposal, at least as we've seen it, makes some sense," Corzine said.
Corzine said he hoped the Assembly and Senate would come back to him with a joint alternative to his plan early this week. But meanwhile, his administration prepared for the standoff to continue.
Maggie Moran, Corzine's deputy chief of staff, yesterday dispatched a memo to the governor's Cabinet ordering them to draft contingency plans for a "government shutdown." By Thursday, departments must detail for the governor what services are essential and what are nonessential and come up with plans for a shutdown of up to four weeks.
"In the event that the state of
Meanwhile, thousands of public workers rallied outside the Statehouse Annex in the noonday heat to show their support for Corzine's budget, which would put $1.1 billion into their pension funds -- the largest boost to the long-underfunded system in more than a decade.
In a brief but passionate address to the cheering crowd, Corzine quoted President John F. Kennedy in praising the labor movement as a force for democracy and social good. He also restated his opposition to efforts by Sen. Stephen Sweeney (D-Gloucester) and other Democratic lawmakers to seek $700 million in voluntary pay and benefit givebacks from state workers to avoid the sales tax increase.
State Police estimated the crowd at 5,000, though union officials said it was twice that number. It was believed to be the largest rally since 25,000 public workers crowded
Union leaders said they are lobbying feverishly -- through e-mails, telephone calls, postcards and face-to-face meetings -- to build support in the Democrat-controlled Legislature for Corzine's budget.
"We can't continue with the gimmicks and the one-shots that continually put us in these crises year after year," said Bob Master, legislative and political director for Communications Workers of America District 1.
Joyce Powell, president of the New Jersey Education Association, said, "We're concerned about where they are going to find the revenue. It shouldn't come from the backs of public workers."
Corzine met privately at his Statehouse office yesterday afternoon with Codey and Roberts, and the two legislative leaders held a joint news conference afterward.
"We're making some progress. We're not there yet clearly but we're going to continue to meet, continue to talk," said Codey, stressing that there's been "no yelling, no shouting" in the budget deliberations.
Codey, meanwhile, said there is "overwhelming" -- but not unanimous -- support for a sales tax increase among Senate Democrats, who have a narrow, 22-18 majority in the upper house.
Roberts said he was "very optimistic" that they would reach an accord this week to meet next week's deadline. He also defended the Assembly's proposals as fiscally responsible and said, "so we recognize the marching orders the governor has given us ... that there need to be recurring revenues or there need to be cuts" to replace the sales tax increase.
Corzine made one major concession yesterday, publicly dropping his plan to raise taxes on hospitals. Codey declared the proposal dead in the Senate last week.
"The hospital provider tax, I think it's a better idea than other people (do), but I've relented on that. There are fights you are going to have, that isn't the biggest part of my budget, and it's out," Corzine said.
Corzine also opened the door to some common ground with Sweeney during his morning radio interview. Last week, Anthony Coley, Corzine's press secretary, said the governor opposed Sweeney's proposal to cut lawmakers' salaries by 15 percent.
But Corzine said yesterday, "If they want to do that, God bless them."
Staff writer Joe Donohue contributed to this report.