New Jersey Budget Fiscal Year 2007

Governor Jon Corzine submitted a $30.9 budget for fiscal year 2007, a 9.2 percent increase in spending over last year. The proposed budget increases spending by $2.6 billion and imposes $2 billion in new or increased taxes.

Note: The state expects to collect a minimum of $600 million more over last year on existing taxes and fees.

Update: Budget address may be read here and the Budget in Brief here.
Update: II: Additional budget details have been added – specific programs and dollars

Cuts to State Government

• Reduce state aid to colleges and universities - $117 million
• Layoff 300 state workers not protected by civil service and cut an additional 700 jobs through attrition - $54 million [Not really a cut - spending for state worker salaries will increase by $200. Net increase in spending - $146 million]
• Reduce municipal aid - $40 million

Spending Increases

• State worker pension fund payments - $1.1 billion
• Property tax rebates - $529.8 million (Average rebate will be $358)
• Debt payments - $483 million
• Medicaid - $358 million
• Increase salaries for unionized state workers - $200 million
• Abbott school construction - $115 million
• Child welfare agency - $114 million
• Environmental Protection Programs - $109 million
• Capital improvement projects - $80 million
• New special education program - $19.5 million
• Expand eligibility for health insurance for children - $5 million
• State Rental Assistance Program - $15 million
• Mental Health services - $10 million
• Temporary Assistance for Needy Families (TANF) - $7 million
• After-school programs - $7 million
• Food Distribution Program - $4 million
• Gang reduction Programs - $2.3 million
• Family planning programs- $2 million
• Halfway Back prisoner transitioning - $1 million
• Gun Violence Prevention - $750, 000

Tax Cuts

• Increase the income tax threshold where residents pay no tax from $20,000 to $25,000
• Provide a cut to families earning less than $30,000. Total cost for both tax cuts - $105 million.

New Taxes

• Hospitalprovider tax (5.5% tax based on non-Medicare hospital revenue) - $430 million
• Extended sales tax to some previously untaxed goods and services - $200 million
• New 2.5 percent tax surcharge on Corporations - $60 million [retroactive to 1/1/06]
• New tax on the sale of commercial property - $17 million
• New water tax of 4 cents per 1,000 gallons to be collected by water utilities - $12 million

Increase Existing Taxes

• Increase sales tax from 6 to 7 percent (Effective July 1, 2006) - $1.3 billion
• Increase the cigarette tax by 35 cents to a national high of $2.75 per pack - $80 million
• Increase wholesale taxes on wine (14 percent), beer (42 percent) and liquor (1 percent) - $12 million

Increase Fees and Charges

• Increase vehicle registration fees on those costing $45,000 or more and vehicles with an EPA rating of lessthan 15 miles per gallon - $17 million
• Sliding scale fees to use after-school and summer programs in Abbott School districts.(Fees will only be charged to families earning more than $60,000) - $30 million
• Charge Medicaid recipients a $2 co-payment per prescription drug, up to $10 per month - $13 million
• Charge Medicaid recipients a surcharge for emergency rooms for nonemergency health problems - $1.1 million

"We're going to re-scrub the budget," said Senate Budget Committee Chairman Wayne Bryant (D-Camden). "The last thing we will consider is any revenue raisers."