No New Taxes Today, but No Guarantees for Tomorrow
Posted June 29, 2007

Be sure to take time to rejoice that this year’s state budget contains no new taxes or tax increases because Governor Corzine has indicated he can’t guarantee the same will hold true in the future.

In fact, unless the state enacts significant structural changes in tax and spending formulas, your taxes are on a one-way road to increase.

Nevertheless, with three days to spare before the constitutionally mandated deadline, Governor Corzine yesterday signed into law a $33.47 billion state budget. While finalization of the spending bill brought to a close legislative debate on the measure, sentiments among legislators remained mixed.

Senate Majority Leader Bernard Kenny, Jr. (D-Hudson) Chairman of the Senate Budget and Appropriations Committee, praised the budget as “giv[ing] residents record amounts of property tax relief and the clearest picture ever of how their money is being spent to support State services.” Kenny claimed that the budget is a “people budget” that increases school aid and local assistance while avoiding tax increases.

But these increases are a double-edged sword, and Senator Joe Kyrillos (R-Monmouth/Middlesex) argued that the lack of a new school funding formula and of municipal consolidation are the very structural problems that need to be addressed if legislators want to “fix our broken state.”

Meanwhile, Assembly Republican Leader Alex DeCroce (R-Morris) and Assemblyman Joseph Malone (R-Burlington) called the budget “an example of reckless spending and misplaced priorities that will put the state in a deeper fiscal hole.”

Echoing what Governor Corzine intimated, although for different reasons, DeCroce noted, “Not only can the state budget not support these massive spending increases, but New Jersey families can no longer afford the excessive tax burden this spending spree has created.”

Despite the hike looming in the future, however, many legislators this week were content to bask in the moment of the budget’s passage, while seeming to ignore the cliff that this state’s fiscal life is rushing towards.

In a statement to the Senate on the passage of the budget, the Governor himself ceded to the spending bill’s critics the fact that this year’s budget grew by $2.4 billion, or almost 8% from last year’s budget. But he was quick to justify the increase by noting that 80% of it “returns directly to property tax payers, leaving the real increase closer to 1.4 percent.”

Additionally, the Governor boasted of over 60 spending items he eliminated by using his line-item veto power prior to signing the bill.

All of this is little comfort, however, to the hard-working families who simply can no longer afford to live and work in New Jersey. According to a Monmouth University/New Jersey Monthly poll released this week, sixty percent of New Jerseyans indicated that their family’s income is not keeping up with the cost of living; only thirty percent responded that they were keeping up, and a paltry six percent indicated that they were keeping ahead of the rising costs.

Comparably, national numbers gathered by the Pew Research Center last fall showed forty percent of Americans falling behind, forty-four percent keeping pace, and twelve percent getting ahead.

The fact is, living in New Jersey is increasingly becoming a luxury that far too few families can afford. And a budget that claims to return 80% of increases to the people – while conveniently failing to point out that this money is first taken from the people and then redistributed – is not the right path for our state to take if we want New Jersey be an affordable place for families in the future.

Real reform is needed, and it is needed now.

Archive