Budget Clears State Legislature, Borrowing Continues, and the "H" Word
Posted June 27, 2008

The state budget cleared a major hurdle on Monday when both the Senate and the Assembly gave it a thumbs up, voting along partisan lines 23-16 and 45-34, respectively, in favor of the $32.8 billion spending plan. In all, the budget cuts state spending by over $600 million – or nearly 2 percent – as compared with last year’s budget. And while no one will dispute the benefit of overall spending cuts, support for the plans specific cuts is not as universal.

For example, the budget cuts aid to colleges, hospitals, and municipalities, the latter of which has many concerned that local towns will have to compensate by increasing property taxes. According to Assemblywoman Alison Littell McHose (R-Sussex), “[T]his budget guarantees that property taxes will continue to rise.” Assemblyman Joseph Malone (R-Burlington) and Assemblywoman Marcia Karrow (R-Hunterdon) agreed, calling the plan “a budget of lost opportunities” and “a sham,” respectively.

On the other side of the aisle, however, the sentiment was much different. Assembly Budget Committee Chairman Louis Greenwald (D-Camden) conceded “pain on every page” of the budget, yet stated, “It is the budget that the people of New Jersey requested. It is the budget that the people of New Jersey demanded.”  Senator Barbara Buono (D-Middlesex) characterized the choices the legislature made as “difficult decisions” but said her hope is that they “will translate next year into more needs being met.” Senate President and former Governor Richard J. Codey (D-Essex) remarked, “This budget clearly reflects the reality of our fiscal situation. Much like millions of Americans across the country, we have to do more with less. This budget required a lot of painful decisions, decisions nobody really wants to make but that had to be done.” And Governor Corzine called the budget “truly unprecedented.”

Yet, rhetoric aside, while the “decisions” belonged to the legislature, much of the “pain” now belongs to the people, and as has become the pattern of so many of our elected officials, the legislature has once again shifted costs of the spending cuts to the people. For example, while supporters of the budget proudly tout that it contains no new taxes – a statement that is technically true – the budget does eliminate certain tax relief, a fact that, for many, will translate into higher taxes.

As the Atlantic City Press reports, under the new budget, property owners with incomes less than $100,000 will still receive a rebate of approximately $1,115. But homeowners with incomes of between $100,000 and $150,000 will see their rebates drop by 40 percent – from about $1,115 to $665. And if you make over $150,000, you’re out of luck. Your rebate will be nonexistent. (This is a change from last year, when rebates extended to homeowners earning up to $250,000.) 

And as the Asbury Park Press reports, while “[r]ebates are supposed to equal 10, 15 or 20 percent of a household’s property tax bill, depending on income…no homes will get increases that would keep pace with rising tax bills.”

What’s more, renters’ rebates will also decrease. The Press notes, “Renters with incomes under $50,000 who aren’t seniors or disabled get $80 after getting $200 to $350 last year.”

Assemblywoman McHose called the property tax rebate yo-yo a “bait and switch,” noting that Democrats increased the rebates last year – an election year – only to decrease them this year. In Senator Leonard Lance’s (R-Hunterdon) words, “This of course is a property tax increase.” But perhaps Assemblyman Joseph Malone (R-Burlington) stated it best: “The much ballyhooed rebate and tax reform that was etched in stone is melting away like an ice cream cone on a 95 degree day in July. Eat it quick before it runs down the front of your shirt.”

Property taxes aren’t the only way taxpayers will be hit under the new budget. As the Asbury Park Press reports, “For the fourth time since 2002, the Legislature has delayed the phase-out of a tax added to utility bills since 1997.” Because of this tax, this year, taxpayers will fork over $62 million, and by 2013, the combined total, according to the Press article, will be $737 million.

The point of all this is that while, yes, the budget does cut spending, the legislature still wants to place much of the burden for these spending cuts on taxpayers instead of taking responsibility for its own out-of-control spending habits. Until the legislature fixes the root of the problem, New Jersey taxpayers will continue to bear the burden.

And on the borrowing front…

Do you remember the proposed constitutional amendment that would require voter approval before the state borrows money? Well on Monday – the same day the legislature voted “yes” to placing the amendment on the ballot this November – our elected officials approved borrowing $3.9 billion for school construction without voter approval! Assemblyman Richard Merkt (R- Morris) called the move “somewhat hypocritical,” but we believe Senate Minority Leader Tom Kean (R-Union) put it more accurately when he stated, “It’s the height of hypocrisy to borrow $4 billion at 3 in the afternoon and turn and say we won’t do it again a few hours later.” 

And in a word, that’s what this week’s legislative proceedings show: hypocrisy. On the one hand, legislators say they want to cut spending, but on the other they are unwilling to take the hard steps necessary and instead put the burden on taxpayers. On the one hand, legislators say the state should stop borrowing money and getting further in debt, but on the other they vote to borrow almost $4 billion.  On the one hand, legislators claim to support property tax relief, but on the other they take it away from many hardworking homeowners.  It’s far past time for our elected officials to stop preaching a message they have no intention of following or, better yet, to start practicing what they preach.

 

 

Archive