Corzine Blinks, New Jersey Budget Deal Reached
Senate Majority Leader Bernard F. Kenny said a potential deal started to come together after Assembly Democrats realized there wasn't enough support for an alternative budget plan they had offered Wednesday.So here’s how the deal is going to work. The average New Jersey family will pay an additional $275 with an increase in the state’s sales tax from 6 to 7%. The new budget deal will supposedly allow part of the additional sales tax revenue to go for property tax relief.
"Hopefully we'll get a budget passed this weekend," said Kenny, who was in meetings with the governor throughout the day.
The governor's staff didn't immediately know Thursday how quickly shuttered activities such as horse racing, casino gambling and the lottery would resume. The casinos stood to lose more than $16 million a day while shut down, and the state would lose an estimated $1.3 million a day in the taxes they normally generate.
For the sake of the argument, let’s assume 100 percent of new sales tax revenue goes for property tax relief. And let’s also assume you’re a member of that average family. So you’re going to pay $275 more in sales taxes to, cross your fingers, get an additional $275 back in property tax relief.
But the budget deal calls for half of the money raised from the sales tax rate increase to be used to lower property taxes this year, and all of it to go for that purpose next year. So you’re going to pay $550 more in sales taxes over the next two years to get, cross your fingers again, $421.50 back. Every year you’re going to pay that additional sales tax and every year you can hope you’ll get it back. Now there’s a victory for New Jersey taxpayers.
Just keep in mind, all revenue from New Jersey’s income tax, estimated to be $11.72 billion this year, must by law be used for property tax relief. How’d that deal work out for you?
We don’t know about you, but the cost of New Jersey property tax relief is killing us.