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Archive for the ‘New taxes’ Category

Just when we thought there was a budget deal, a handful of defections in the Republican caucus threaten to derail it.

As far as Democrats are concerned, they had a deal with the Christie Administration. The Dem leadership would deliver four votes in the Senate and eight in the Assembly for the Republican sponsored budget bill. In other words all 17 Repubs in the Senate…all 33 in the Assembly would be voting for it. But in order for that to hold, all Republicans must be on the bill, and some are not doing what someone else promised they would.

In the Senate, I am told that Mike Doherty, Jennifer Beck and Diane Allen are holding out. Negotiations are ongoing ( Keep in mind…I could be wrong just ten minutes from now…but at some point on Wednesday that was definitely the case ). There are different reasons at play here, but there are a coupla issues that seem to be drawing the ire of the Repub caucus.  They are called “revenue raisers,” and as far as the Republicans are concerned that is a fancy way of saying ” new taxes.” One bill would establish new business fees, another would allow the government to snatch unused gift certificates. Let’s say someone buys you a gift certificate to eat at your favorite restaurant. You forget to use it, and fail to notice the expiration date. The state would be entitled to compensation for that. Obviously, this has upset business owners particularly the Restaurant Association.

As has already been widely reported: In the Assembly Michael Patrick Carroll and Alison Littell McHose are also no votes. They feel too much school aid is going to the Abbotts and they believe there should be a more equitable distribution to include needy rurals and suburbans ( remember, education is getting an $820 cut in this budget so every dollar counts ).

Anyway, Dems are disinclined to give the Governor more votes, so this may be a real test of his leadership within the party. And if Christie can’t get the Repbs to fall in line and he does come seeking more Democratic votes they will no doubt “come with a large price tag.”

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Well, if they did…perhaps they spoke to soon. And by “they” of course I mean me. Not just me…many others as well. The narrative last week was that the basic framework for a budget deal is firmly in place. But…here it comes…you ready…Here comes the cliche…the devil is in the details. bang.

Apparently last Thursday the principals were supposed to meet at Drumthwacket with Christie to finalize the budget. However, there were some differences of opinion over who that should be. I’m told that the Dems wanted to bring Barbara Buono, Paul Sarlo and Lou Greenwald to which Christie simply said, “no way.”

At issue are a handful of restorations. The D’s have reportedly dropped their ask from $400 to $200 million. But there are still some hang-ups over things like family planning, and no one seems to know what to do about Bergen County. Christie is not ready to concede the point on blue laws, even though both parties up in Bergen seem to want them to stay. The figure is reportedly $65 million in sales tax from allowing Sunday retail, which is a decently large number to fill in the budget. Although during a Senate budget hearing recently David Rosen said OLS “would need to do it’s own analysis” of the $65 million projection, which is a polite way of saying it might be wildly off the mark.

Well, we certainly know that Sarlo favors keeping the blue laws on the books, so that might explain why Christie wanted to keep him away. But what about the others?

All I know is that I hate missing the insider dinner or party. All your friends go, then every time they get together they reminisce about how much fun it was, and you feel all left out. Then they develop private, inside jokes from that night which you will never share or be a part of. Aw Man, I hate that.

Anyway, in the meantime both sides seem to be digging in on the budget. Dems now say they will vote to override the Gov’s veto of the  Millionaire’s tax…and someone from the front office appears to have strategically leaked a memo to the Ledger stating that preparations are underway for a government shutdown.

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When I was a kid and either dragging my feet because I wanted to put off going to bed, or avoid visiting someone I sorta hated…I was often told by parentals and the like  “let’s get this show on the road.”

It was an apt metaphor because big productions  ( like circuses and musicals ) sometimes travel, and in many cases I was literally putting on a show ( can you believe I was a slightly theatrical child who was also incredibly stubborn? Well, me neither! ).

Governor Christie is also taking the show on the road, in a matter of speaking. He was in Hoboken on Monday to sell the idea to taxpayers that a hard 2.5% cap will control the runaway growth in local government by keeping property taxes manageable.

It’s a show because it plays to his strengths. Christie is very good on his feet, and he relates well to the public. It’s also a show because in this case, the media was invited to watch but not to ask any questions.

Here are the numbers. Assuming the average property tax in New Jersey is $7200 per year. And the average tax went up 3.3%. That means that a hard 2.5% cap would only have resulted in $90 in savings for the average home last year. Not nothing of course, but certainly  ( as one Democratic lawmaker says ) not “the panacea” the hard cap has been made out to be.

When you couple the $90 in annual savings with a loss of a rebate check, it actually doesn’t do much to ease the burden households can expect next fiscal year.

The Christie Administration would argue that it is not a one-time fix…and that a hard cap will result in savings year after year by forcing local governments to live within their means.

Getting municipalities to trim their budgets and restrain their excessive growth??? Now THAT is a show worth watching. I might even DVR it.

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It’s that time of the year again. The New Jersey Press Association presents the Legislative Correspondent’s Club annual show.

Basically, the state’s  ( now dwindling ) press corps performs a series of skits and songs that mock the political and media elite of the Garden State. It is often quite funny replete with costumes, wigs and other flamboyant accessories that would make even Elton John blush.

As for my role…well, I am El Presidente this year. That means I don’t actually have to sing ( which is not my strong suit ). I have to deliver the introductory speech which is supposed to be funny and slightly mean spirited. Well, I don’t know how funny it shall be, although I’m working on it. It will most certainly be biting, and of course familiar.

Then of course, after the show is over, people get to stand around and hang out in a cocktail party-type atmosphere which is even more fun. And the whole evening is off the record. So, if you are remotely interested, I urge you to purchase tickets. Proceeds go to charity.

Contact Peg Stephan 609-406-0600 ext. 14. or pastephan@njpa.org

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By now it is no secret that Democrats may be on a collision course with Governor Christie over the so-called millionaire’s tax ( which is a bit of a misnomer because it actually kicks in at 400k, and those folks are hardly “millionaire’s” ). In fact, Repubs maintain that people above 400 already pay 41% of the taxes. And last year with that additional tax it was 43% ). So the question now is how does everybody find a way to save face and avoid what some believe to be a high stakes game of chicken.

As Republican Joe Malone pointed out during budget hearings this week, there is currently no bill to renew that top earner surcharge. Democrats seem to take Christie at his word that he will veto such a bill. So maybe the Democrats will send it to him and force his hand?Then both sides can fight it out and see who the public sides with.

One Republican lawmaker tells me “the budget may not get done before June 30.” Does that mean shutdown? One Democrat says it’s unlikely to happen, but if there is no budget, there is no government. It’s like the sign on the wall at the food court in Fast Times at Ridgemont High – “no shirt, no shoes, no dice.”

So, there is a proposal that Republicans may float to keep the state afloat…so to speak. Swap out $600 million in pre-k funds for school aid. It would basically eliminate the pre-k program which Christie said during the campaign “we simply cannot afford.” But Democrats hold it dear. they say studies show it’s effectiveness in getting kids acclimated to learning. And of course even the elimination of pre-k wouldn’t get us all the way toward making up the $820 million in school cuts. But, it would be a partial restoration. And with some districts forgoing pay raises ( who would later need to be rewarded ) you might come close. It would certainly avoid an awkward confrontation over the millionaire’s tax. And Dems may not wanna go down that road. If the government gets shutdown over higher taxes for the rich, Christie will be the darling of the national media. He might even grace the cover of Newsweek as the man who “stands up for Conservative principles.”

Bottom line is this: Republicans are making the transition from talking about what bad shape the state is in fiscally ( because of Democrats over the last 8 years ) into governing and “it hasn’t gone smoothly.” Moreover, now Republicans are starting to hear it on the local level as the threat of property tax increases looms, and little jonny’s lacrosse team will be no more. You have three new leaders with the Speaker, Governor and Senate Prez…perhaps they will find a way for everyone to chalk up a victory and leave for vacation on july 1.

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When the surcharge expired in December, there was no rush to renew it. Democrats were too busy with gay marriage, medical marijuana and a whole host of other issues that took up the lame-duck session.

So when Governor Christie says that Democrats could very well have renewed it, he is right. Of course Christie was screaming from the sidelines that they shouldn’t, but it didn’t stop the Dem legislature from doing a bunch of other things the incoming Gov did not want.

Here is the breakdown ( i’m plagiarizing a bit here ): If NJ taxable income is $400,000 to $500,000 the rate is 8%. If it’s $500,000 to $1,000,000 the rate is 10.25%, and if  income is over $1,000,000 the  rate will be 10.75%. These surcharges account for roughly $750 billion in revenue to the state.

That last top tax rate is pretty high, and has frequently been invoked by the new Governor as one of the reasons people are fleeing NJ for PA ( which has a much lower top tax rate ).

But Democrats say the Governor backed himself into a bit of a corner by saying these tough times call for “shared sacrifice.” Apparently, it should be shared by the low income and middle class people, not the top earners.

Politically speaking, one Democrat even told me “We are going to kill him on this.”

So, when Christie says the Dems could have renewed the surcharge, but instead they “wanted the issue,” there may be some truth in that. But it does not change the fact that it’s a potent issue if people see their property taxes go up to account for lost school aid. They may very well start wondering why the top earners don’t pay more to help out.

On the flip side, even without the surcharge, top earners still pay an awful lot in taxes. And at some point you want wealthy people staying here. Studies have shown that wealth is migrating outta state, so that’s not an ideological mirage, but a genuine concern.

Programming note: These blog posts are riddled with examples of creative spelling and grammatical inconsistencies. I scribble them in between doing my actual job which is reporting and producing TV stories for NJN News. Interesting concepts and facts are my focus, not necessarily the formalities of proper writing. And I can’t believe I just said that…somewhere Mrs. Silfen my third grade teacher is throwing up.

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Sometimes when we cover a certain story over several consecutive months, the conclusion can seem, well, anti-climactic.

Governor Corzine signed the fiscal year 2010 budget in a ceremony in back of the State House which left me with the question of  now what am I gonna cover?

The spending plan is $28.9 billion. That is smaller than last year and even smaller than the first budget Corzine signed back in 2006. He was joined by fellow Democrats who help shepherd the plan through exhaustive hearings in the legislature’s budget committees.

Not a single Republican voted for this plan, and several lawmakers issued statements condemning the governor for it. Chris Christie the Republican gubernatorial candidate said it raises $1.2 billion in new taxes, and more than a million people will also be losing their property tax rebate from last year.

Corzine was asked about new taxes on alcohol, wine and cigarettes, and he said they are “relatively small” when compared to property tax bills. However, he acknowledged his critics and their right to speak out against his spending plan.

Lest we forget this is an election year, and no doubt people are going to hold him accountable for how the state spends their money. I guess the question is how many folks will take their anger out on him at the ballot box in November?

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When you look at what is going on in New Jersey versus what is happening in NY State there is just no comparison.

In Albany, a 31-31 Senate deadlock has resulted in chaos, paralyzing key pieces of legislation like maintaining mayoral control of New York City schools.

While New Jersey has a had long and laborious process of approving the FY 2010 budget…and it did take the Senate until almost 11:00 pm on Thursday night to finally pass it, the work got done and it was completed several days ahead of the constitutional deadline. But perhaps most importantly, a spirited debate preceded passage.

Democrats are basically saying that this is the best and most responsible budget the state can produce given the unprecendented financial crisis and subsequent drop-off of tax revenues to the state.

Republicans counter that this budget relies on one-shot gimmicks ( like the federal stimulus money ) and raises taxes way beyond what any reasonable person would consider fair.

Liquor tax goes up. cigarette tax up. tax on businesses up. lottery winnings up. And those making more than 400k will also be paying more.

The two major parties can squabble over whether these were the best places to raise revenue but the bottom line is the budget is balanced and currently awaiting the Governor’s signature.

Democrats say government spending is the way to ignite the economy and get it back on track. Republicans say that will only grow the public sector instead of the private, and giving small businesses a break is the way initiate growth. It’s an age-old argument and like with everything, there is merit to both ideas.

Our coverage from last night is worth watching. particularly for lawmakers who took those arguments to the floor. Hey, it ain’t New York. At least in NJ they are still talking about the stuff that matters.

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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.

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Now we know most of the budget particulars for FY 2010…

rebates are gone for non-seniors – that’s about a million people for a savings of $900 million. Taxes will go up on people earning over $400 k ( the Corzine admin claims that is just 1% of the population ), and the Guv was forced to scale back his plan to expand Pre-Kindergarten programs.

So how does that shape up? Democratic leaders are arguing that basically it’s pain all around, and no one gets what they want.

But here is the key question since the Dems control the legislature and don’t need Republican votes to pass the budget…are there enough D votes to get this thing through?

Senators Ron Rice, Jeff Van Drew and Joe Vitale all appear to be on the fence. In fact, last week Vitale threatened to vote against the budget unless the Governor maintains funding for Family Care. That’s the program that provides health insurance for the working poor. The budget would keep it flat, in essence cutting the rate of growth and not allowing new enrollment.

But now Vitale says he will not be the one to hold the budget hostage. And as Majority Leader Steve Sweeney told me, in the end, they’ll have the 21 Senate votes needed for passage because no one program should be saved over anyone else’s pet project.

That’s a fair point. I suppose another fair point is that the Dems are not going to embarrass Corzine by voting against his budget in a  critical election year…or will they?

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