Here we go again.
Because of this – ahem – unexpected windfall, the state sudenly has half a billion dollars to spend that it previously did not.
Corzine and legislative leaders have vowed to put every penny toward property tax relief. Not sure if that will exactly be the case, but in fairness it’s probably pretty close.
The Senate and Assembly Budget Committees once again passed the FY 2010 budget, after it was recommitted following the discover of the windfall. That sets the stage for full passage on Thursday, still almost a week ahead of schedule.
But there were some changes, and sources say arguments over the details of those changes threw everything into a bit of chaos.
On Monday, the Assembly Budget Committee was set to meet at 11:00 am. After a delayed start and then plowing through some bills, they took a another break and didn’t come back until after 4:00 pm. The holdup was apparently an issue involving an increase in the health care premium tax.
Originally, the Corzine Administration wanted to raise that tax on group rates by 1.25%. Amerihealth, the Mt. laurel-based insurer went berzerk. As did Horizon. Amerihealth in particular said it would force them out of the market. But from what we have pieced together, the real holdup amongst the legislative leaders came from Senate President Dick Codey who went to bat for Horizon, and firmly dug his heels in.
I am certainly not privy to all the behind-the-scenes machinations ( although I will ceratainly try and find out ), but in the end the tax increase was only .3%. That’s a huge difference ( obviously ). And the same bill also restores the so-called one eighth rule – which is enormously complicated so here is the condensed: Companies doing the bulk of their biz in NJ would get taxed more if the one eighth rule were eliminated.
One final point here…now that the tax is greatly reduced it won’t be bringing in the $100 million in revenue the state was hoping for. So what will they do? Apparently the administration will use $60 mil or so from the “surplus lines guarantee fund” within the Dept. of banking & Insurance. What on earth that fund is or where it’s been until now is anybody’s guess.
So, there are a bunch of changes, and more will probably trickle out in the next few days. The question now is does the Senate have the votes to pass this budget? Democratic Senator Joe Vitale abstained yesterday on budge cmt., setting the stage for another vote scramble on Thursday by Dick Codey and the Dems.