New NJ Budget Tax Increases

As predicted here, Corzine's budget that passed this week including a partial restoration of the property tax rebate program due to increase tax amnesty collections of 500 million dollars. Rebates have continued for Seniors and are restored for those making up to 75,000 dollars per year(at a 2/3 rate). It does eliminate the rebate for renters which I never understood anyway.

From the Burlington County Times:

The recession-year budget raises $1.3 billion in new taxes on liquor, cigarettes and the wealthy. It extends a 4 percent surcharge on the corporate business tax that was to expire, and realizes $500 million by suspending rebates to renters and higher income homeowners. Republicans say all that amounts to $2.8 billion in tax increases.

The article goes on to note the increased tax on residents earning over 500,000 dollars per year. In addition, to those making over 250,000 per year, next year you cannot deduct your property taxes. For those under 250,000 per year, your property tax deduction is now capped at 5,000. Check out your tax bill, I bet many of you out there are about to get a tax increase and you don't even know it.

What is missing from this budget is cuts. Real cuts. And that is why Corzine is still doesn't get it. The only people who will get it from this budget is the citizens of New Jersey. And they are going to get it in ways they never imagined.

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Corzine's (and the Democrat's) Budget Problem

Jon Corzine just submitted his version of a budget this week with apparent lukewarm support only from his Democrat cronies in the legislature. This budget is likely to dramatically decrease Corzine's approval in the state due to the dire situation of the state's finances. Corzine in his budget address on March 10 claimed that he is a champion of cutting the budget:

To that purpose, the budget I am proposing for FY 2010 totals $29.8 billion - that's $1 billion less than the first budget I presented in 2006. Stop and think about it, since 1947, every governor before me has grown spending over their four years.

With this proposal, we will have reduced spending two years in a row and will literally spend less than in the first budget I presented in 2006. This isn't a matter of debate or nuance. It's a fact.

Let's examine this statement. He compared his drop in spending to the budget he submitted in 2006. For those of you who believe that facts should trump malarkey (I used that word in preparation for St Patrick's Day), here is the budget statement for the budget he submitted in 2006:

Governor Jon S. Corzine’s proposed Fiscal 2007
Budget seeks to restore fiscal integrity to the State
of New Jersey. This $30.9 billion Budget is an
important first step in a multi-year process to
reestablish prudent fiscal management. A
fundamental principle reflected throughout this
Budget is that we, as a State, must pay the bills for
the current operations of State government. We
cannot continue to defer the costs of our decisions
to future generations, or even until next year. This
simple practice of matching current expenditures
with current revenues has been missing from State
budgets for too long.

So, truth check one is on track. But what about the budget that acting Governor Codey submitted in 2006? Shouldn't that have some relevance on "Governor Spending Cut"? This is from the Budget brief for 2006:

Acting Governor Codey’s $27.4 billion proposed Fiscal
2006 Budget is an honest and responsible budget that
has State government living within its means and meets
the challenge of reining in government spending while
at the same time not recommending any increase in the
sales tax or income tax rates. Despite nearly a billion
dollars in increases for mandatory entitlements, the
proposed budget is $614 million, or 2.2%, below the
$28 billion budget enacted in fiscal 2005. In contrast,
the Fiscal 2005 Budget actually increased spending by
17% from the year before. In fact, the reduction
proposed for fiscal 2006 is the largest spending cut in
State history, both on a percentage basis and in its
amount.

So the real facts are that Governor Corzine is proposing spending 2.4 Billion dollars more than the budget that Codey submitted before he became Governor. And those were much better times than today. So Corzine while claiming the mantle of a spendthrift, is lying through his teeth. He raised spending 3 billion dollars his first year in office and now pats himself on the back for not getting anywhere near what Codey did as temporary Governor the year before he took office. I cannot consider this rhetoric or nuance, Mr Governor. You are dishonest.

Another dishonest portrayal is the claims about how the prior Republican Governor ran the state into the ground. Here is Christie Todd Whitman's final budget brief:

The total budget recommended by the Governor for
fiscal 2001 is $21.253 billion, an increase of $1.278
billion, or 6.4%, over the current year. Over the
seven budgets of the Whitman Administration, the
annual growth in appropriations has averaged 4.5%.
This compares to 6.3% in the prior administration.

Let's summarize what we have gotten from Corzine and McGreevey and their Democratic counterparts. Budgets that have grown from 21.2 billion dollars to 30 billion dollars. That represents growing the budget of this state 150% in the 8 years they have been in office. Our taxes are out of control and the only thing that has grown in the state are corruption arrests for New Jersey politicians (mostly Democrats) and the state workforce.

This Governor and legislature could have made an effort to get spending under control. They could have created a rainy day fund in good times to protect the state from economic downturn. They could have exhibited at least a semblance of fiscal self control. But they haven't. And we continue to pay for it.

And now, as the Governor tries to claim that flat lining spending increases will balance a budget devastated by the personal misfortune of many Wall Street "Rich People" that Corzine likes to point to when he is ginning up his class warfare act, he is being dishonest once again. And guess who is going to pay the price?

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I work in software marketing, so a substantial chunk of my paycheck comes from commissions. Can you imagine if I went to my boss and said, "Gee, Gerry, our commissions are down. So instead of X% per million dollars, you need to give me X+3% per million so I can stay revenue-neutral." He'd laugh in my face.

But that's exactly what Governor Corzine is doing. Tax revenues are down, so he's going to raise taxes: by a billion dollars or so!

Meanwhile, he's cutting less than 10% of spending (about 3 billion from a budget of, what, about 33 billion last year). And by the way, some of that so-called cut is rebates and deductions -- in other words, he's cutting back on letting us keep our own money.

Even when he's cutting spending, he's raising taxes.

And you'd be able to see that clearly if we had a budget to look at. But we don't.

For that matter, we can't see anything clearly. What are your priorities, Jon? You gave us some ideas in your budget address, but I can't tell how sincere you are. I can't tell whether my dollars are going to, say, Planned Parenthood (even though they had a surplus) or stem-cell research (even though the voters have given that idea a resounding "no").

So should he now get to hide behind an opaque wall until people actually have to vote on his budget? Should there be no debate?

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When he ran for governor, people talked about his financial savvy. If we had known then where the Wall Street Warriors would get us, maybe we wouldn't have been surprised that he's less than he's cracked up to be.

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I keep thinking about the budget as if it were weight. Putting on 60 pounds is a lot easier than taking it off, and you're better off not putting on the pounds; but if your weight is a problem then you have to figure out what habits made you heavy, fix those habits, overcompensate until you're down to a normal weight, and then start maintenance.

As a state, we've gotten fat on taxes. We shouldn't have increased spending as much as we did, but since we have, we should find out where the increases have gone to, how many are mandatory vs. discretionary, and what the real benefit is: how our quality of life has improved.

Then we should start remedial efforts. We'll have to strip out unnecessary stuff, even stuff we really like. We'll argue among ourselves about what's discretionary vs. what's mandatory. It won't be fun.

And then we'll have to keep off the weight.

Much easier said than done, of course.

Comment from Dennis: Jake, I think we miss the fact that Corzine is following the same script that Obama has followed at the Federal level. Gin up the crisis, use urgency to eliminate debate and pass a poor bill without appropriate review. We all know the stimulus went through under the "urgency" banner yet Obama waited 5 days to sign it into law. That was a scame pure and simple. Corzine has never had any new ideas so it is not surprising that he will do the same with NJ's budget. Message to the voters: Suckers!

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Corzine Tax Increase on All of NJ

The Governor announced his budget plan yesterday. He made a point to be Obama'esque by citing the global economic condition rather than his own mismanagement for the poor state of NJ's economy. As a matter of fact, he tried to balance the "i inherited the problem (from his Democrat counterpart?) with the economic situation. He proudly spewed Obama by announcing tax increases on those making more than $500,000 per year as if everyone didn't expect there was more to his populist pap.

Well there was. He quietly announced a proposal to not only eliminate the rebate program for everyone but seniors thereby increasing taxes on most of the homeowners int he state, he also announced the elimination of the deduction for mortgage interest in income taxes. I caught this last night and alerted Jake but I didnt get a change to do the research before the folks at NJ.com did commenting on the budget.

That could translate into a double whammy for non-senior homeowners earning between $75,000 and $150,000. Not only would they lose their rebate, they would also miss out on hundreds of dollars in savings from the deduction.

A homeowner earning $95,000, for example, would not only lose a $1,000-plus rebate. Scrapping the property tax deduction would take away another $350 or so, according to state figures.

But that isnt all:

According to income tax data from 2006, the most recent available, there were 469,300 tax returns in the $80,000- to $150,000-income bracket. Those taxpayers had an average savings of $356 from the deduction. The average savings was $175 for the 258,500 tax returns in the $50,000 to $70,000 range.

The proposed budget would offer rebates averaging $900 for non-seniors earning less than $50,000 annually, and checks averaging $700 for non-seniors making between $50,000 and $75,000.

Last year, Corzine's budget included rebates averaging $665 for households earning $100,000 to $150,000. Households earning up to $100,000 received checks averaging $1,115.

So guess what all of you New Jersey resident who voted for hope and change and a new way of doing things? You voted for a middle class tax cut that apparently amounts to $13.00 per month for most people. Review this post and you will realize that thanks to your Obama loving Governor, you are already in the hole by quite a large margin. You thought it was the OTHER GUY who was going to be taxed.

You were wrong.

Read the entire article here.

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Obama - The Earmark King!

During the campaign last year, candidate Obama insisted that the would not sign earmark loaded legislation if it came across his desk. He promised hope. And he promised change. From the AP:

President Barack Obama plans to sign a massive spending bill to keep the federal government running, but he is cracking down on lawmakers' penchant for stuffing such legislation with billions of dollars in pet projects.

Apparently, the 8,600 earmarks(Taxpayers for Common Sense) in the budget bill are not really earmarks. Just as the trillion dollars of pork in the stimulus was not earmarks either. But wait, the Obama team has a new spin(from Yahoo):

Orszag said: "We want to just move on. Let's get this bill done, get it into law and move forward."

Said Emanuel: "That's last year's business."

Let's examine this. Allegedly, voters picked change. The only change in this budget is that former President Bush would not sign it. So the Democrat congress held it over until President Obama took office. And he signed. Earmarks and all.

Change you can believe in.

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Tax Tea Party Movement Growing!

(photo from Instapundit)

I have avoided writing on this as many other bloggers have been taking the ball on organizing that advertising Tax Tea Parties all over the countrty. There have been significant events in Kansas, Denver, Seattle, Chicago and DC in the past two weeks. It has been enjoyable to watch but it really seems to be building.

From Michelle Malkin:

Seattle on Monday. Denver on Tuesday. Mesa AZ on Wednesday. Overland Park, Kansas today. What a week, huh? We got the anti-stimulus, anti-entitlement protest ball rolling — and now the movement, spurred further by CNBC host Rick Santelli’s call for a “Chicago Tea Party,” is really taking off.

David Hogberg at Investor’s Business Daily has a nice piece out today spotlighting the growing taxpayer revolt the rest of the MSM won’t cover. He interviewed our registered commenters Liberty Belle Keli Carender, who spearheaded the Seattle anti-pork protest, and HuskerGirl Amanda Grosserode, who organized today’s anti-stimulus demonstration against Democrat Rep. Dennis Moore in Overland Park, KS.

Read the entire post by Michelle here. If this thought has crossed your mind, you will not be disappointed following these links. I would also recommend Instapundit's coverage of some of these events including some awesome pics!

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Will NJ Property Tax Rebates be cut?

This just in from Newsday:

Gov. Jon S. Corzine said Friday that he is considering suspending property tax rebates next year as New Jersey faces a multi billion dollar budget gap.

The governor said all options are on the table for his 2010 budget proposal, which he plans to present to state lawmakers on March 10. State budget makers are looking for ways to close an estimated $6 billion deficit. That figure doesn't include federal stimulus money the state expects for budgetary relief.

It was just a matter of time that the Governor would notice that the state cannot afford the homestead rebate program. Last year, he tried to take it away but only pared things back a bit:

New Jersey residents get about $1.7 billion in property tax rebates annually.

Some homeowners saw their rebate checks cut or canceled last year. Those making more than $150,000 got no rebate, and those earning $100,000 to $150,000 saw their rebates decline by an average of $295.

While he said he is considering suspending the property tax rebates for some or all homeowners, Corzine on Friday would make no promises or predictions about next year's budget.

My issue with this program starts with the entire concept. If rebates are needed because property taxes are too high, the state should actually look at why. They would find that the unfunded mandates from Trenton and the wasted suctioning of school funds from non-city school districts into the inner city has put too much of a strain on local municipalities. That in addition to the fact that the state frankly has too much government. Too much local government. Too much county government and too much state government. I have mentioned before in this blog that I have lived in several states and New Jersey extracts more money for the least services of any state that I have lived.

So the underlying motivation for the rebate is to ignore the fundamental problem and patch it by sending out checks to homeowners. This is a kick the can strategy that does nothing to solve the problem, just postpones it to another day. And if that were the only issue with the rebate it would be bad, and irresponsible of our politicians and a demonstration of sheer government incompetence, but it would at least be understandable.

There is a built in bias in the rebate system against people who actually pay taxes in our state. This program has morphed into a giveaway program designed to put out checks ahead of elections to Democratic constituencies. This program provides checks to citizens that DO NOT EVEN PAY PROPERTY TAX. And it has continued to exclude the highest property tax contributors in the state due to income. Sort of a double progressive tax (you pay more for your taxes on income and then pay more for your property tax).

Now, I have heard from people who make the case that property taxes are built into rents but most studies will tell you that the market and location determines rental prices. Frankly, if you are going to make the indirect argument, retail shoppers pay a higher premium on property taxes as local prices for goods sold in retails shops are much more sensitive to property tax costs than rental units.

But the main point is that this program is no longer affordable. My suggestion would be to look closely at the Senior citizens impact and retain the program for SENIORS WHO PAY PROPERTY TAXES. They are often impacted severely for growth in their community. For seniors who rent, no rebate.

It's time for the adults in the room to eliminate their political pay-for-vote schemes and look toward helping New Jersey come out of this fiscal situation a stronger and more vibrant state. The alternative is that we can become Michigan. And that is not a pretty sight.

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