New Jersey State Budget Hoopla
Democrats in Trenton are still arguing over what taxes to increase and by how much to fund a 9.2 percent increase in state spending. Assembly Republicans have put forward a proposal to cut spending by $2 billion to avoid any tax increases, but Democrats have shown no inclination to address the root of the state’s financial crisis – spending.
New Jersey will be treated to this same budget drama every year until lawmakers in Trenton learn that state spending can not exceed the growth in the state’s private sector without dire consequences. The call for increases in state taxes means that state spending is outstripping the growth our personal and business incomes.
As everyone should know, when you or your business earns more, the state takes its share of your increased earnings. When you spend more, the state takes in more sales taxes. A growing economy produces additional tax revenue without a need for new taxes, surcharges and fees or increased tax rates. For example, without any change to tax rates, New Jersey will take in $1.135 billion more than last year from the state's income tax, a 10.7% increase.
Over the past five years New Jersey has been demanding and getting a greater percentage of our collective income through the enactment of new state taxes and fees. Corzine claims his proposed tax increases are necessary to clean up New Jersey’s financial mess. Lost in all the Trenton hoopla is the stark fact that the state will start the next fiscal year with a minimum of a $2 billion deficit.
That’s right, Corzine is projecting a $2 billion budget gap for 2008, assuming his $1.8 billion in tax increases are enacted this year, income tax revenue increases by an additional $1.190 billion and sales taxes bring in $236 million more next year. Corzine’s budget for 2008 will increase state spending by a minimum of 7.1 percent. The Governor has already set up a state budget crisis for next year by failing to cut spending this year.
"People of our great state are being imposed on because there's not a budget to consider," Mr. Corzine said. "There's no budget to veto, no budget to amend and no budget to sign."At today’s special legislative session, Assembly Republicans should hand Democrats last year’s state budget and ask them to post it for a vote. Spending will not exceed reoccurring revenue and the surplus can be contributed to the state worker pension funds.