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NEWS RELEASE
Governor Jon S. Corzine
February 22, 2007
FOR MORE INFORMATION:
Anthony Coley
Brendan Gilfillan – 609-777-2600
GOVERNOR CORZINE INTRODUCES 2008 BUDGET
“This budget confirms my commitment to meaningful property tax relief and does so in the context of the fiscal principles we’ve established and fought for last year,” said Governor Corzine. “This budget is financially disciplined and restrained, responsibly balanced with honest numbers and doesn’t rely on any strategies that mortgage our future.”
Property tax relief constitutes 82 percent of the $2.23 billion increase over last year’s budget. Excluding funding for property tax relief, total spending is up by less than two percent. Recently concluded contract negotiations will also yield immediate and long term cost savings for pensions, benefits and other large operational costs. This will address the long term unfunded liabilities facing the state pension and health benefits plans.
To help slow the increase in property taxes, Governor Corzine has proposed $580 million in new school aid and an additional $8 billion in aid to school districts. These funding increases will be spread across every school district in
The budget also includes $339 million in additional tax cuts. Expanding the Earned Income Tax Credit will save 200,000 low-income families $64 million. The budget also allows the S-Corp and AMA business taxes to expire, resulting in tax savings of $275 million for
The Governor’s budget message is available online at:
http://nj.gov/governor/news
A budget summary is also available online at:
http://www.state.nj.us/treasury
Homeowners, schools get bigger share of budget
Thursday, February 22, 2007
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Homeowners and suburban schools will get a bigger share of the $33.3 billion state budget Governor Corzine is expected to introduce today, which avoids a tax increase by slashing its surplus and banking on a growing economy.
Corzine will also use his second budget address to denounce the tradition of lawmakers tacking on pet spending projects in the final stages of the negotiations.
Last year, more than $300 million in local projects such as fire stations, sidewalk repairs and civic groups, was added to the budget.
The assault on "pork" spending comes as federal investigators are examining whether some lawmakers or their family members personally benefited from this late-stage spending. Top legislators have been subpoenaed and some have turned over budget-related documents.
The governor's spending plan for fiscal 2007-08 will reflect an increase of more than 7 percent from the budget adopted last July.
For most
"This budget is not designed to please any constituency other than the taxpayers of this state," Abelow said.
That tax credit -- which goes to homeowners who earn less than $250,000 a year -- is paid for through an increase in the sales tax passed last year.
The bulk of the credit will go to homeowners earning less than $100,000, but Corzine has yet to sign the legislation creating the plan, which passed the Legislature earlier this month.
"There will be no tax increases," Abelow said, a first for a state budget since 2001.
Another change from recent budgets: An increase in direct aid to public schools.
Suburban school districts can expect $200 million -- an average increase in state aid of about 3 percent, although many may receive more, Treasury officials said.
After several years of flat funding, the increase in state aid is also expected to help keep local property tax bills in check. School taxes account for about two-thirds of each bill. The state has not increased its aid as costs -- including teacher salaries and benefits -- have risen in local districts.
Corzine is also prepared to announce a new aid program for schools offering full-day kindergarten in districts that have high numbers of low-income students. That will account for another $100 million in new aid, officials said.
Overall, aid to public schools will account for about one-third of the total budget proposal.
Towns, which have also seen their aid frozen in recent budgets, will get more aid through a new $34 million program.
Corzine has used what little new money is available to help cut property taxes, Abelow said.
"It is by far the largest category of our spending," he said.
Union accord
The state will save $40 million in this proposed budget from a new contract with the Communications Workers of America, the largest state worker union, Abelow said. That deal, announced Wednesday, gives union workers a 13 percent raise over four years. It also calls for workers to pay a portion of their health benefits, a first for union contracts, and will raise the retirement age for new workers.
Corzine is expected to tout the deal with the CWA in his speech before the joint session of the Legislature today.
The governor came under criticism last year when he urged lawmakers to back off plans to cut benefits through legislation. The Democrat-controlled legislature grudgingly conceded, but that put pressure on Corzine to deliver promised savings.
Lawmakers praised Corzine and the deal, which must be ratified by the union workers.
"While there is always more to be done to reduce the staggering costs of the state's pension and benefits systems, this contract agreement is a huge step in the right direction for both employees and taxpayers," said Assemblywoman Nellie Pou, D-Passaic.
Some local union leaders immediately balked at the terms, and two local CWA leaders said they would advise their members to vote 'no.' But five other union local presidents on Wednesday said they support the deal, setting up a potential public feud over whether to ratify the contract.
Property tax relief
The new property tax credit is one of the largest state programs in recent history.
In
Senior citizens will get either a $1,200 credit, the same as their current rebate, or the 20 percent cut on the tax bill, whichever is greater. Renters would get a rebate of $150 -- double the past amount.
The property tax credit was the centerpiece of the special legislative session that Corzine opened in late July with the declaration that New Jersey's tax system -- which fostered the country's highest property tax bills -- was "broken beyond the point of minor adjustments."
The median tax bill last year for
Corzine is expected to pledge some money to other programs. Colleges and universities will share an additional $50 million -- the same amount cut from their aid last year, Abelow said.
Another $50 million will be spent on health care programs including money for autism initiatives, stem cell research and cancer treatment.
Specific details will be available in the coming days, Abelow said.
Email: mcalpin@northjersey.com
State budget: No new taxes
By TOM HESTER Jr.
Associated Press
Taxes wouldn't increase, schools and municipalities would see their first state aid increases in years and property tax relief would be boosted under Gov. Jon S. Corzine's new budget plan, officials said Wednesday.
Corzine is slated to unveil the spending proposal to lawmakers this morning.
The $33.3 billion plan will include a 3 percent aid increase for schools and a 2 percent increase for municipalities -- money the schools and towns use to help control property taxes, which are the nation's highest and have been increasing about 7 percent per year.
"The main thing is, there are no tax increases and an extraordinary amount of property tax relief," said Senate Majority Leader Bernard F. Kenny, D-Hoboken. "Those are the cornerstones of the budget."
Treasurer Bradley Abelow said nearly half the budget will be devoted to some form of property tax help, including $2.3 billion that will cut property tax bills by 20 percent for most homeowners.
"This budget reflects the spending priorities of property tax relief," he said.
Assembly Budget Chairman Louis D. Greenwald praised the proposal.
"This should be called the Property Tax Reduction Act," said Greenwald, D-Voorhees.
But the spending proposal -- saddled with nearly $3 billion in state debt -- includes no increased money for state college and public school construction or open space preservation, nor does it include extra funding to help uninsured residents.
It also doesn't fully fund the state's obligation to public worker pensions, and Sen. Barbara Buono said the increased state aid wouldn't help with property taxes.
"That increase will be negligible," said Buono, D-Metuchen. "It's just not going to cut it."
The plan does not rely on oft-discussed proposals to sell or lease state assets such as the New Jersey Turnpike and the lottery, but Abelow said Corzine will discuss such moves today.
According to Abelow, the spending proposal would expand a tax credit for working poor families, eliminate two business taxes and provide $50 million more for state colleges and universities, which saw aid cut last year.
Corzine also will discuss how lawmakers traditionally have slipped extra spending into the budget just before its adoption, a practice being reviewed by federal investigators who on Friday subpoenaed documents on such spending from legislative leaders and staff offices.
Republicans have called for Corzine, a Democrat, to crack down on such spending. Meanwhile, Senate President Richard J. Codey, D-West Orange, has proposed requiring legislators looking to modify a budget to publicly request changes.
"I'm going to have a formal proposal that I'll lay down that extends beyond what the Senate president has put on the table," Corzine said.
That would involve eliminating most spending of the type added by legislators last year, including hospital grants, giving the governor three days to review the final budget and publishing a document detailing how the final budget was developed, Abelow said.
The school funding increase would be $310 million, while the municipal aid increase would be $32 million.
Bill Dressel, New Jersey League of Municipalities executive director, said that increase would quickly be erased by increased pension costs for public workers.
"It's not going to dramatically reduce our reliance on the property tax," Dressel said.
The budget plan relies on $40 million in savings from a new state worker contract that would increase salaries for next four years but force employees to contribute to their health care for the first time and put more toward their pensions. The deal still must be ratified by union members.
Last year's $31 billion budget increased taxes about $1.8 billion to help fill a $4.5 billion budget hole. Corzine's proposal to increase the sales tax from 6 percent to 7 percent sparked a standoff with fellow Democrats in the Legislature that resulted in a weeklong state government shutdown in July.
Published: February 22. 2007 3:10AM
Last property tax reform bills clear Legislature
Posted by The Star-Ledger February 22, 2007 3:02PM
The Assembly gave final approval today to measures that would set up new county school superintendents with veto power over local districts' budgets and eliminate pension benefits for future elected and appointed officials, effectively wrapping up the Legislature's eight-month effort to rein in property taxes.
Both measures, already cleared by the Senate, now await Gov. Jon Corzine's signature, along with the centerpiece of the property tax reform effort, a proposed 20 percent property tax credit, and other reform measures.
Assembly members voted 41-30 to approve the county superintendents bill (A4) as it had been changed by the Senate earlier this month. The bill to make changes to the pension system (S17) passed 57-16.
Action on the bills marks the end of the Legislature's consideration of the reform proposals put forth by four special Legislative Committees that spent the summer considering ways to rein in property taxes. In all, the Legislature adopted about one-third of the 98 reforms the special committees proposed.
Contributed by Dunstan McNichol
In budget speech, Corzine promotes idea of cashing in on assets
Posted by The Star-Ledger February 22, 2007 12:15PM
Gov. Jon Corzine told lawmakers today that
In his annual budget address to a joint session of the Legislature, Corzine promoted the idea of selling or leasing state assets such as the Turnpike or Lottery to raise money to preserve open space, rebuild infrastructure and make other investments in the state's future.
"The economic potential from restructuring the state's interest in our asset portfolio is too significant to ignore, whether that asset is the Turnpike, the Lottery, naming rights, air rights, or whatever," Corzine said. "Potentially, asset monetization could restructure the state's finances by dramatically reducing our debt burden, and consequently reducing debt service."
Known as "asset monetization," the sale or lease of state assets could free up as much as $1 billion or more a year in the budget long into the future, the governor said, by reducing the amount of money the state now has to devote to paying off what it has already borrowed.
"We spend twice as much to pay investors as we do to support student aid, charity care, prescription drugs and parks, combined," Corzine said.
Corzine said he does not have any specific recommendations for cashing in on state assets yet, but told lawmakers: "When we are ready, we'll be back."
The governor also called on lawmakers to "put an end to the midnight spending sprees" and adopt a more "open" process of adopting state budgets.
"We have tough choices coming," Corzine said, "and the public needs to trust we are working for them - not ourselves, not our friend, not anyone else."
Corzine said he is sending a letter to the Democratic leaders of both houses "outlining further steps to build accountability." They include deadlines so both the public and governor will have time to review the budget before it is finally passed.
If adopted, those reforms would radically change past patterns of late-night budget sessions in which lawmakers decorate the proverbial "Christmas tree" with hundreds of millions of dollars of pet projects, a process that is currently under federal investigation.
Corzine also demanded passage of "long-overdue" legislation to prevent officials from holding more than one elected office simultaneously. Such a bill was in position for final approval today but hit a snag when the Assembly and Senate could not agree on its wording.
Corzine, however, said Assembly Speaker Joseph Roberts (D-Camden) and Senate President Richard Codey (D-Essex) "have made a personal commitment that a ban on dual office-holding will be passed and sent to my desk before it's time to sign this budget" at the end of June.
"If we are truly serious about restoring the public's trust in government - about restoring their trust in us - it's time to act on these reforms, sooner rather than later," Corzine said.
Unveiling a $33.3 billion state spending plan for the fiscal year that begins July 1, Corzine said it contains no new taxes or gimmicks, is responsibly balanced and provides "the largest increase in direct property tax relief in
Compared to last year's budget stalemate, which saw state government shut down for a week, Corzine said some might call the new budget proposal "boring."
"I suspect that nowadays in
Noting almost all of the new spending is devoted to property tax relief, Corzine said he was pleased he was able to reserve $100 million "for new initiatives that will have both short- and long-term paybacks."
They include $10 million for stem-cell research, $9 million for a new state comptroller to fight fraud and waste, and $5 million for autism.
They also include $20 million for a "consolidation fund" to encourage schools and local governments "to share services and reduce costs," Corzine said, giving credit for that initiative to Assembly Speaker Joseph Roberts (D-Camden).
The largest single new initiative - $64 million - would expand the earned income tax credit program to cover almost 300,000 more working families living close to poverty.
"Considering our tough budget last year, I'm very pleased we could fund these modest, but important, initiatives," Corzine said. "Still, I'm almost embarrassed to highlight them because they are a fraction of what we really should be doing."
Corzine spoke for about 34 minutes and was interrupted by applause 17 times. (In last year's budget address, in which he asked for a penny increase in the state sales tax, Corzine was only applauded three times.)
State law requires passage of a balanced budget before the start of the new fiscal year on July 1 in order for the state to spend money on anything other than essential services.
Contributed by Robert Schwaneberg
