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6-16-09 News from Trenton on State Budget in Senate and Assembly Budget Committees yesterday
'Budget moves step closer to passage' GANNETT STATE BUREAU "...Lawmakers in both the Senate and Assembly on Monday advanced the state's proposed budget and its accompanying $1 billion in tax increases into place for final approval later this week..."

NORTHJERSEY.COM, The Record, The Hearld News ‘Stile: Fast-tracked budget on inevitable roll’

"...This year’s $28.6 billion, propped up by federal stimulus funds, tax hikes on the wealthy and spending cuts, is being hustled through with virtually no debate or scrutiny — two weeks ahead of schedule. The budget is scheduled for final passage on Thursday..."

June 15, 2009

Budget moves step closer to passage

By MICHAEL SYMONS
GANNETT STATE BUREAU

Lawmakers in both the Senate and Assembly on Monday advanced the state's proposed budget and its accompanying $1 billion in tax increases into place for final approval later this week.

Democrats generally, though in some cases grudgingly, voted in favor of Gov. Jon S. Corzine's $28.6 billion state spending plan, which cuts expenses in part by eliminating — for one year, at least — property tax rebates for all but seniors and the disabled.

"None of us are happy with the budget, but hopefully next year the revenues will turn the corner and we'll be able to have a budget that doesn't require such painful choices to be made," said Sen. Barbara Buono, D-Middlesex, who heads the Senate budget committee.

Republicans voted against the budget and tax changes, which include higher levies on wealthy households, businesses, cigarettes, wine, liquor, lottery winnings and insurance premiums. They said the budget is temporarily balanced but unstable moving forward.

"What we have before us is the worst budget I've seen in 14 years in the Legislature," said Sen. Anthony Bucco, R-Morris. "If approved, its harm will linger for decades. This budget puts an awful burden on our children and our grandchildren. We are pushing billions of dollars in expenses into the future. A governor who promised to end gimmicks is using more irresponsible gimmicks than any governor in history."

Changes to the budget plan were unveiled Saturday, then endorsed 48 hours later. Among those were a 3 percent cap on increases in tuition and fees at state colleges and universities and withholding 5.25 percent of colleges' aid unless they reduce personnel costs through wage freezes, furloughs or other actions as the state is doing.

For the seventh consecutive year, a proposal to institute co-payments for prescriptions for Medicaid members has been scrapped, along with a plan to being charging patients for HIV/AIDS drugs.

Details of most of the tax increases have been clear since March. Business groups and, particularly, health insurers spoke Monday against a plan first unveiled last month to more than double the tax businesses pay on health insurance premiums.

One problem is that the insurance tax hike is retroactive to January, a cost that businesses haven't planned for, said New Jersey Chamber of Commerce vice president Jim Leonard.

"So I've been paying my insurance premiums. Now all of a sudden there's a 1.25 percent increase in that going back to January. That's very difficult to do. ... That is an example of the types of difficulties New Jersey is plagued with," Leonard said.

The budget debate, of course, takes place against the backdrop of the race for governor. Republican nominee Chris Christie Monday said New Jersey for three years now has the nation's highest tax burden and is the nation's least business-friendly state.

"Jon Corzine has failed as governor on the economy, his main claim to fame four years ago, and he has specifically lied to the people of New Jersey when he said that he would stand for middle-class tax cuts and cutting taxes for seniors and the middle class when he has done no such thing," Christie said.

Corzine's re-election campaign didn't respond, but Assemblyman John Burzichelli, D-Gloucester, said Corzine has been "at every turn a little bit ahead of the curve" in handling first the budget, then the state's response to the recession.

"History will look back on Gov. Corzine and will look at him maybe as America looked at President Truman, as being underappreciated in his time of service," Burzichelli said.

Assemblyman Joseph Cryan, D-Union, who is also the Democratic Party state chairman, criticized what he deemed "the continuing tear-down from some in the leadership of the state of New Jersey about the state of New Jersey itself, the continuing negativity."

Assemblyman Joseph Malone III, R-Burlington, said state officials and business leaders ought to focus on substantive reforms that would alter that perception, not cease talking about it.

"The reality is the reality, and if we continue down this road, it's going to continue that way," Malone said. He said real changes are needed, rather than "just putting a sugar coating over something that's not working."

Assemblyman Louis Greenwald, D-Camden, the chairman of the budget committee, said income taxes for the 99 percent of New Jersey residents not among the state's wealthiest are "incredibly competitive" with other states. He said the problems lie with property taxes — too many school districts and not enough tax options for local governments, which more or less can only turn to property taxes to raise revenue, he said.

"When you see that is the only option, that continues to spiral out of control, that is not a five- or six-year problem. That is a decades-old problem that you are finally, in my opinion, coming to the breaking point, that we cannot afford. And that is the future of this state. It will ultimately be the demise of this state, or it will be those that have the courage to address that issue," Greenwald said.

Additional Facts

THE BOTTOM LINE

Recap of tax changes in the proposed state budget:

• Suspension of property tax rebates
Only seniors and the disabled will get property tax rebates this year. Last year, homeowners with households incomes under $150,000 received rebates, but plans to limit rebates to those under $75,000 were expanded as the recession wore on this spring.

• Suspension of property tax deduction for some households
Households with incomes over $150,000 that aren't headed by senior citizens won't be permitted to deduct their property tax payments from their income taxes next spring. The budget plan originally suspended that for all nonsenior homes but was changed.

• One-year tax rate increase for incomes over $400,000
The tax rate would change from 6.37 percent to 8 percent on household income between $400,000 and $500,000; from 8.97 percent to 10.25 percent for income between $500,000 and $1 million; and from 8.97 percent to 10.75 percent on income over $1 million.

• Higher payroll taxes paid by employers
Because the balance in the unemployment fund has dropped so low, employers will be forced to pay an additional $350 million in payroll taxes starting July 1. The state is putting in $120 million of its own to avoid an even larger tax increase.

• Tax lottery winnings over $10,000
Lottery winnings currently aren't taxed in New Jersey. This would raise $8 million for the state. The state also wants to get into the multistate Powerball lottery, to generate an estimated $40 million a year.

• Extend corporation business tax surcharge of 4 percent
A 2006 law adopted in Corzine's first year imposed a 4 percent surcharge on corporate business taxes that's scheduled to expire June 30. This would delay that to raise $80 million for the state next year.

• Increase cigarette tax by 12.5 cents to $2.70 a pack
The state's cigarette tax was raised in 2002, 2003, 2004 and 2006. Federal taxes on cigarettes are going up 61 cents a pack April 1. This would raise $26 million for the state, though overall collections from the tax are projected to rise $18.5 million.

• Increase alcohol tax by 25 percent on liquor and wine, but not beer
Alcoholic beverage taxes generally haven't been changed since 1992. Rates currently are $4.40 per gallon of liquor and 70 cents per gallon for wine, sparkling wine and vermouth. This change would raise $22 million for the state.

• Increase taxes on accident and health insurance premiums
The tax on health insurance premiums is now 1 percent and would go to 2.25 percent. New Jersey insurers also face higher retaliatory taxes to other states as a result. Because large employers generally fund their own insurance, business lobbyists say this change will primarily affect businesses with between two and 50 workers.

 

 

NORTHJERSEY.COM, The Record, The Hearld News

‘Stile: Fast-tracked budget on inevitable roll’

Monday, June 15, 2009

By CHARLES STILE, COLUMNIST

The most startling development from the Day of Droning over the New Jersey state budget occurred in the State House cafeteria.

State Treasurer David Rousseau ate his lunch in peace without talking about line items or school funding formulas or uttering expletives to describe the Republican Party’s budget-balancing alternatives, like he did in front of a pack reporters in March.

“No one came over,’’ said Pete Cammarano, a Democratic lobbyist. “Not a single person.”

Why bother? The average influence peddler and pork-pursuing legislator knows that pestering Rousseau right now is a waste of time. This great Armageddon budget, stripped of rebates and packed with tax hikes is on the fast-track to final passage.

Governor Corzine and his fellow Democrats are desperate to make the 284-page document a footnote in the public’s consciousness as soon as possible. Corzine’s favorable poll ratings are plunging faster than tax revenues, and Democratic legislators are nervous about hitting the stump without vote-buying rebates for cover.

They have no intention of making any major, last minute revisions to the plan. Oh, there will be the occasional senator holding out his or her vote – in hopes of brokering a deal or scoring some appointment for an ally – but not for long.

To do so would mean more debate, more delay, more scrutiny and more opportunities for Republican’s to relentlessly recast the budget as an “attack on the middle class.” So great care was taken to tamp down on the theatrics. No threat of a government shutdown. No Rooseveltian fireside chats from Corzine to prepare voters for the rebate-sacrifice to come. Keep things moving efficiently along in a kind of numb aura of inevitability.

The strategy of stuffing the plan as far under the radar as possible started on Saturday, when legislators released the bill to an empty State House and a depleted press corps.

On Monday, the document faced the dreary, keep-the-questions-to-a-minimum hearing in front of somnambulant audiences staring down at their Blackberries.

Sen. Barbara Buono, the Middlesex County Democrat who has been in a perpetual audition to become Corzine’s lieutenant governor running mate — she has a SenBuono4LG account on Twitter — carried out her marching orders. She launched an unspirited defense that dwelled on the Democrats’ budget-balancing feats from last year. “We began the slow painful process of paying down our crushing debt,’’ she said in her preamble. “That was a monumental change.”

But by the time she got to “our revenues reflect the harsh realities of an economy in turmoil,’’ a reference to this year, no one seemed to care. She was followed by Sen. Anthony Bucco, the ranking Republican from Morris County not known for his electrifying oratory.

The strategy may be politically shrewd, but it is one of the most ironic derelictions of legislative duty in recent memory. For years, lawmakers faced criticism for cobbling together budgets at the last minute in those infamous round-the-clock bargaining sessions on June 30, the last day before the constitutional deadline.

This year’s $28.6 billion, propped up by federal stimulus funds, tax hikes on the wealthy and spending cuts, is being hustled through with virtually no debate or scrutiny — two weeks ahead of schedule. The budget is scheduled for final passage on Thursday after committees in both the Senate and Assembly approved it Monday.

Senate Minority Leader Tom Kean Jr., said he understood why. The longer the budget sticks around, the harder it will be to maintain Democratic votes. Republicans in both houses declared a party-line opposition to the bill on Monday.

“The budget is like a fish that looks great on the first day, but after three days it starts to stink,’’ Kean said.

But the Republicans haven’t shown much imagination or effort, either. To use a popular Corzinism, they have offered “tepid” alternatives beyond their “middle class-attack” message.

They, too, have put politics ahead of public interest, stepping aside so that Republican gubernatorial candidate Christopher J. Christie can glom the small pie of free-press with his strident critique of Corzine’s policies and character. Christie’s plan at the moment is to drive up Corzine’s negatives, not to provide a balanced budget.

Sen. Paul Sarlo, the Wood-Ridge Democrat, brushed aside criticism that Democrats were shoving the budget through without scrutiny. With the exception of a few minor changes, the bill is essentially the same plan Corzine updated a month ago.

“There is not one senator in the room that wanted for anything today,’’ said Sarlo, vice chairman of the Budget and Appropriations Committee. “But we have an obligation to the citizens that we represent to provide a balanced budget.”

Maybe so. But it was also Democrats strategy to pass the bill before anyone notices. And it was in the Republican’s best interests to let that happen.

E-mail: stile@northjersey.com
 

The most startling development from the Day of Droning over the New Jersey state budget occurred in the State House cafeteria.

State Treasurer David Rousseau ate his lunch in peace without talking about line items or school funding formulas or uttering expletives to describe the Republican Party’s budget-balancing alternatives, like he did in front of a pack reporters in March.

“No one came over,’’ said Pete Cammarano, a Democratic lobbyist. “Not a single person.”

Why bother? The average influence peddler and pork-pursuing legislator knows that pestering Rousseau right now is a waste of time. This great Armageddon budget, stripped of rebates and packed with tax hikes is on the fast-track to final passage.

Governor Corzine and his fellow Democrats are desperate to make the 284-page document a footnote in the public’s consciousness as soon as possible. Corzine’s favorable poll ratings are plunging faster than tax revenues, and Democratic legislators are nervous about hitting the stump without vote-buying rebates for cover.

They have no intention of making any major, last minute revisions to the plan. Oh, there will be the occasional senator holding out his or her vote – in hopes of brokering a deal or scoring some appointment for an ally – but not for long.

To do so would mean more debate, more delay, more scrutiny and more opportunities for Republican’s to relentlessly recast the budget as an “attack on the middle class.” So great care was taken to tamp down on the theatrics. No threat of a government shutdown. No Rooseveltian fireside chats from Corzine to prepare voters for the rebate-sacrifice to come. Keep things moving efficiently along in a kind of numb aura of inevitability.

The strategy of stuffing the plan as far under the radar as possible started on Saturday, when legislators released the bill to an empty State House and a depleted press corps.

On Monday, the document faced the dreary, keep-the-questions-to-a-minimum hearing in front of somnambulant audiences staring down at their Blackberries.

Sen. Barbara Buono, the Middlesex County Democrat who has been in a perpetual audition to become Corzine’s lieutenant governor running mate — she has a SenBuono4LG account on Twitter — carried out her marching orders. She launched an unspirited defense that dwelled on the Democrats’ budget-balancing feats from last year. “We began the slow painful process of paying down our crushing debt,’’ she said in her preamble. “That was a monumental change.”

But by the time she got to “our revenues reflect the harsh realities of an economy in turmoil,’’ a reference to this year, no one seemed to care. She was followed by Sen. Anthony Bucco, the ranking Republican from Morris County not known for his electrifying oratory.

The strategy may be politically shrewd, but it is one of the most ironic derelictions of legislative duty in recent memory. For years, lawmakers faced criticism for cobbling together budgets at the last minute in those infamous round-the-clock bargaining sessions on June 30, the last day before the constitutional deadline.

This year’s $28.6 billion, propped up by federal stimulus funds, tax hikes on the wealthy and spending cuts, is being hustled through with virtually no debate or scrutiny — two weeks ahead of schedule. The budget is scheduled for final passage on Thursday after committees in both the Senate and Assembly approved it Monday.

Senate Minority Leader Tom Kean Jr., said he understood why. The longer the budget sticks around, the harder it will be to maintain Democratic votes. Republicans in both houses declared a party-line opposition to the bill on Monday.

“The budget is like a fish that looks great on the first day, but after three days it starts to stink,’’ Kean said.

But the Republicans haven’t shown much imagination or effort, either. To use a popular Corzinism, they have offered “tepid” alternatives beyond their “middle class-attack” message.

They, too, have put politics ahead of public interest, stepping aside so that Republican gubernatorial candidate Christopher J. Christie can glom the small pie of free-press with his strident critique of Corzine’s policies and character. Christie’s plan at the moment is to drive up Corzine’s negatives, not to provide a balanced budget.

Sen. Paul Sarlo, the Wood-Ridge Democrat, brushed aside criticism that Democrats were shoving the budget through without scrutiny. With the exception of a few minor changes, the bill is essentially the same plan Corzine updated a month ago.

“There is not one senator in the room that wanted for anything today,’’ said Sarlo, vice chairman of the Budget and Appropriations Committee. “But we have an obligation to the citizens that we represent to provide a balanced budget.”

Maybe so. But it was also Democrats strategy to pass the bill before anyone notices. And it was in the Republican’s best interests to let that happen.

E-mail: stile@northjersey.com

 


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160 W. State Street, Trenton New Jersey 08608
609-394-2828