Thursday, July 06, 2006

New Jersey Shutdown - Day 6

From the Star Ledger:

Assembly panel to consider budget bill

The Assembly Budget Committee plans to consider a budget bill today, the first spending plan put on the table since Gov. Jon Corzine ordered a shutdown of state government six days ago when lawmakers failed to meet the July 1 constitutional deadline for a new state budget.

Introduced late last night, the proposal will not contain the one cent increase in sales tax Corzine has proposed. That issue has caused a s stalemate between the governor's office and the Assembly.

“This is a balanced budget that does not push our current obligations into a drawer and does not increase the sales tax,” said Assemblyman Louis Greenwald (D-Camden), the budget committee chairman.

Before the committee meets, Corzine will address the special session of the Legislature at 9 a.m. It will be the third straight day he has done so. In his first two speeches he implored both houses to accept a compromise or come up with an "acceptable alternative" to his plan.
...
The Assembly proposal is expected to net $320 million by extending the current 6 percent rate to several currently untaxed services or items. They include security services, magazines, computer services, seasonal rental properties and temporary employment services.

It also would save $100 million by dropping a proposed 10 percent increase in taxpayer rebates, and restore about $120 million of the $308 million that Corzine wants to cut from colleges and universities.

Treasurer Bradley Abelow withheld comment about the Assembly's plan last night. Corzine has said he would likely veto a budget that did not include a sales tax increase, though he has promised to consider any offering.

29 Comments:

Anonymous Anonymous said...

Is this the best the WALL STREET wizard corzine can come up with?

What happens next time?

7/06/2006 06:34:00 AM  
Blogger chicagofinance said...

WSJ Ed & Op-Ed


The Jersey Boys
July 6, 2006; Page A14

The New Jersey budget meltdown is finally hitting essential government services: Atlantic City's casinos. Schools and parks are one thing, but how dare the politicians interfere with gambling. Without a state budget for five days now, the Garden State can't pay its state workers, who include the casino inspectors who follow Donald Trump's money.

The gambling shutdown will cost the state some $1.3 million a day in lost taxes, but Governor Jon Corzine and the Democrats who run the legislature still won't end their showdown at the spendthrift corral, also known as Trenton. The legislators are convinced that Mr. Corzine is leading them down a path to political ruin by insisting on raising the state sales tax to 7% from an already high 6%, and they're probably right.

But Mr. Corzine, who has three years left in his term, wants to guarantee himself a big new source of permanent revenue. The sales tax hike would raise $1.1 billion or so a year, in a budget that is some $31 billion. What neither side wants to do is cut into much of that spending, so Democrats in the legislature would instead prefer to raise other taxes, which they hope are not as politically combustible.

The sales tax would cost the average New Jersey family about $275 a year -- which is a few seconds of interest income for Governor Corzine, a mega-millionaire from his days at Goldman Sachs. Back when he was running for the U.S. Senate in 2000, Mr. Corzine felt differently about a previous sales tax increase. "I would not have raised the sales tax $1.5 billion, which I think falls the most on those people who have the least ability to pay," he said in the May 11, 2000, Democratic primary debate.

The legislators may also be worried that voters could soon figure out that New Jersey is already one of the most heavily taxed states in the nation. The nearby table has the lowlights. (By the way, the 50th state in business friendliness is New York. Is it something in the Hudson River?) New Jersey voters keep electing these tax-and-spendaholics, so we suppose they get what they deserve.


Op-Ed

Flee New Jersey, Raise Your Standard of Living

For the benefit of others considering joining the "exodus of businesses, high net worth individuals and working families" from New Jersey ("Jon Corzine Florio," Review & Outlook, July 1), allow us to personally illustrate the economics.

In 2004 my wife and I (she's a physician, I'm a management consultant) became two of the 60,000 net departures from New Jersey when we moved to Colorado. Since then our incomes have remained about the same and we live in a home worth 20% more. In contrast, our state income tax rate is 35% less, our property tax burden is 87% less (that's not a typo!), and because these changes reduce our AMT, our federal income tax rate is 37% less—and this is all in comparison to pre-Corzine tax rates. In short, we keep more of what we earn and enjoy a higher standard of living. Right now, New Jersey needs higher taxes like the Delaware River needs more water.

Donald D. Gallo
Golden, Colo.

It's probably impolite to delight in the travails of others, but how else to react to the delicious political farce unfolding in New Jersey, whose voters have only themselves to blame. Democrats fighting Democrats over how much to increase taxes and then shutting down the government until somebody "wins"!

National Republicans should highlight New Jersey as another glaring example of what total Democrat control of government can do, much like the 1992- 94 Democrat federal monopoly. As political theatre, New Jersey doesn't get any better.

Ken Artingstall
Glendale, Calif.

7/06/2006 06:39:00 AM  
Blogger grim said...

I have a sinking feeling we are going to get hit with an increase in the disability tax.

That would most certainly tip the scales of those who are currently pondering an exodus.

grim

7/06/2006 06:53:00 AM  
Anonymous Anonymous said...

Well,

NJ is first in the country in
Property Tax burden.

NJ is 49th in Corp. Friendly.

Nice going to the pols. in
Trenton.

7/06/2006 06:55:00 AM  
Blogger Grim Ghost said...

The WSJ's oped would be a little more palatable if the same editorial page hadn't during the Christie Whitman administration continually urged her to cut taxes, even if meant borrowing. The WSJ's editorial page in essence enshrined fiscal irresponsibility.

This is not a partisan issue either, since McGreevey carried on the same ignoble tradition of borrowing and using fiscal gimmicks.

Now the chickens have come home to roost. I did not vote last year, but I think Corzine's budget is making the best of a bad situation. Yes, I would like to see more cuts in spending as well, but politically that would not have been possible.

I also think that the so-called exodus from NJ is being overblown -- I've said before that I think the census projections are inaccurate and like the last census, 2010 will see a big upward revision

7/06/2006 07:28:00 AM  
Blogger Grim Ghost said...

I should add -- an increase in the state sales tax is the least likely to cause an exodus. Far less than an increase in corporate taxes or income taxes.

7/06/2006 07:39:00 AM  
Anonymous Anonymous said...

The whores in Trenton have
killed this State.

Both Parties, one is bad as the
other.

NJ is a welfare State.

22k workers in Human Services
alone.

That one of the give away departments.

Hospitals is another give away
dept.

It goes on and on.

No wonder people are leaving the
state.

7/06/2006 08:08:00 AM  
Blogger Metroplexual said...

I am leaving NJ as soon as my wife gets a transfer.

7/06/2006 08:29:00 AM  
Blogger RentinginNJ said...

My wife and I are going to check out Raleigh\Cary NC over Labor Day weekend. We have already spoken to a realtor to show us some houses.

This is just another check in the "time to leave" column.

7/06/2006 08:55:00 AM  
Anonymous Anonymous said...

Another day the govt is closed. Another day I dont notice a dam thing different. Please stay closed.

7/06/2006 09:02:00 AM  
Blogger Grim Ghost said...

I would have to take around a 50% pay cut if I left NJ. And places that I could find near comparable salaries like California have even higher prices.

So, no I'm not leaving NJ barring unusual events.

7/06/2006 09:10:00 AM  
Blogger Metroplexual said...

I am looking at Phoenix. I have a sister who lives in Tucson and my sister married to the professor might be moving there soon. Houses out there don't have big yards, but I don't want one. Taxes are low, weather is better except in the summer when it really gets hot for two or three months. It beats shovelling snow. In two years the house prices will be 30-40% cheaper IMO. Rents are a fraction of NJ.

A 3 bdrm 1500-1800 house will run you $900- $1,200 (school district dependent). A 4bdrm will run $1,100 up. BTW these are nice places with community pools, gyms and other amenities.

7/06/2006 09:17:00 AM  
Anonymous Anonymous said...

In Charlotte NOrth Carolina,
people actually commute from
South Carolina.

Its about 20 miles, and even
cheaper than NC,

Your cost basis drops by about 50%.

Not bad.

However, in the south the jersey
attitude does not fly.

7/06/2006 09:42:00 AM  
Blogger grim said...

From the Star Ledger:

Corzine: 'We can do this today! Today! Today!'

In the sixth day of an unprecedented state government shutdown prompted by a budget stalemate, Gov. Jon Corzine put a new compromise plan on the table and declared: "We can do this today! Today! Today!"

Exhorting lawmakers to "end this mess" Corzine drew a sustained standing ovation from lawmakers in a joint session of the state Legislature by saying that the deal can be reached today.

He also revealed that he had a new plan that would provide "billions of dollars" in long-term property tax relief, something Assembly Speaker Joseph Roberts (D-Camden) had wanted in his long stand-off with Corzine over the governor's plan to raise the sales tax from 6 percent to 7 percent.

Assembly Democrats last night offered a budget that would not include any sales tax increase and instead would expand the tax to new items and tax other services. In the long budget standoff, Roberts has said he would not accept a sales tax increase unless it was dedicated 100 percent to property tax relief. Corzine says the sales tax is needed to put the state's finances on solid footing after years of deficits.

Corzine, addressing the Legislature for the third consecutive day, did not directly respond to the Assembly Democrats' plan. He once agains said he wants a "responsible budget" with recurring revenues.

Aides to the governor said Corzine has offered a new plan that would provide 50 percent of the sales tax increase to property tax relief each year if voters approve it in a constitutional amendment. Using a constitutional amendment would mean lawmakers would be forced to use half the sales tax for property tax relief even if there is a big budget crunch. The new plan modifies a deal offered by Senate President Richard Codey (D-Essex).

7/06/2006 10:36:00 AM  
Anonymous Anonymous said...

" In the long budget standoff, Roberts has said he would not accept a sales tax increase unless it was dedicated 100 percent to property tax relief."

Let's take money from you, run it through a program that will skim 40% off the top (after all, we need to pay people to process your property tax rebates!), and then send it back to you. Brilliant!

7/06/2006 10:50:00 AM  
Anonymous UnRealtor said...

Did Corzine or others suggest ways to cut spending?

A novel concept I know, but just asking.

7/06/2006 10:54:00 AM  
Anonymous Anonymous said...

nj is a welfare state.
why would we cut the give a ways

They made sure the welfare checks
went out the other day.

If anything they want to add to the
aid.
NJ has 22k employees in Human
services alone.

7/06/2006 11:25:00 AM  
Anonymous Anonymous said...

The whores in Trenton will
feather their nest. Watch.

and the pay for the overpaid
state workers will be retro.

7/06/2006 11:26:00 AM  
Anonymous gary said...

Greater than 50% of the work force in this state works for the NJ government. I'm still flabbergasted 2 days later.

7/06/2006 11:30:00 AM  
Anonymous Anonymous said...

Gary, pull your bottom jaw up, already.

Although, I have to admit, working in Somerset county, I really am amazed at the drive on Route 1 without the state workers.

My normal 1 hr commute took 13.5 minutes flat this morning.

Stay home, I say.

7/06/2006 11:31:00 AM  
Anonymous Anonymous said...

If this continues perhaps
the shamelss pols. will open
food kitchens for the state workers.

7/06/2006 11:34:00 AM  
Anonymous Anonymous said...

Perhaps corzine can loan that
cot he has in his office to
one of the clerks.

Think he would change the sheets?

7/06/2006 11:35:00 AM  
Anonymous Anonymous said...

Well here we are. day 6.

The Gov. and the legislature
are at odds.

They don't want to risk the gig.
Voter wrath if they cut spending,more taxes on an already
fleeing population.

Hundreds of millions in net worth
has left the state already.

Selling assets,,,next. NJ turnpike
owned by a chinese company.

How 's that for an idea.

7/06/2006 12:26:00 PM  
Blogger DebtVulture said...

Unrealtor,

I think the Republicans have proposed some spending cuts. Yeah, novel idea. We've had tax increases (of one kind or another) for 6 years and we still can't balance the budget. Does not help when spending increases 10%+ per year. Doesn't anyone in government have any shame? Make some hard decisions and cut some spending!

7/06/2006 01:14:00 PM  
Anonymous Anonymous said...

"The headlines in the newspapers...have hastened the process." NNJ,

Governor got his sales tax increase.

7/06/2006 01:17:00 PM  
Anonymous Anonymous said...

cite Jim Hooker, NJN.

7/06/2006 01:19:00 PM  
Anonymous Anonymous said...

Ladies and gentlemen , boys and
girls. I believe we have a settlement.

Yee Haww, let 's go to AC.

7/06/2006 02:14:00 PM  
Anonymous Anonymous said...

I'll be at the New "Pier at Caesar's"

7/06/2006 02:19:00 PM  
Anonymous Anonymous said...

Anon 1:26...while the sales tax increase is the done deal, I kinda liked your selling assets idea.

I mean after all, isn't that what normal folk have to do when faced with bankruptcy, etc.? Garage Sales!

NJ could theoretically have sold LBI, for example, to PA, together with an easement on 195.

Cool.

7/06/2006 02:27:00 PM  

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