Daily Archives: June 27, 2011

>AS A Matter Of Fact…Democrats make a statement with budget plan of their own

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June 27th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Democrats have done an unexpected thing. With just days to go before a budget must be enacted, they have introduced their own budget – a “this is what we stand for” budget – with a companion millionaires’ tax to restore at least some of the Christie administration’s proposed program cuts.

That they did this shouldn’t be a surprise.

It’s common practice for the party that controls the Legislature to draft and sponsor the state budget. The Democrats control both houses just as they did last year.

But last year the majority party ceded budget power to the Republican minority, who produced a bill that closely resembled Governor Christie’s March 2010 proposal. Many expected the same to happen this year, so it’s somewhat surprising Democratic leaders have proposed a spending plan of their own.

Here’s what is being proposed [The actual list of changes has not been posted publicly although the press has been briefed and Senate President Sweeney’s office confirmed details]:

MORE REVENUE

$913 million from higher than expected revenue estimates: In March 2011, Governor Christie’s proposed budget planned to spend $29.4 billion in FY 2012. In May, when revenue projections were updated, the Office of Legislative Services (OLS) estimated that collections for the current year and next would be $913 million more than the Governor’s original March estimate. The estimate assumed the current tax structure would remain the same.

$550 million from the reintroduction of the millionaires’ tax: Last year, the legislature passed a millionaires’ tax bill that increased taxes on taxpayers with incomes over $1 million. Governor Christie vetoed the bill. The legislature could not override the veto. In this year’s bill, the additional tax revenue would be tied to additional aid for wealthier suburban schools. Part of the logic is that Republican legislators might be willing to vote for a bill to raise income tax rates on their wealthier constituents if that additional revenue stays in the wealthier school districts.

$300 million in funding shifts from programs that have unused balances: Not all programs spend their entire appropriation every year. Unspent funds either lapse and become unavailable to the program or they rollover and become part of the same program’s spending in the following year. This year the legislature has determined that $300 million is available to be cut from programs that have been over-funded in the past and added to programs that need additional support.

AMONG THE DEMOCRATS’ PRIORITIES

School Aid: The democrats’ bill would add at least $1.1 billion to school spending. Senator Sweeney said this includes the Supreme Court-mandated $500 million for the state’s poorest, urban districts and $600 million for defunded suburban school districts. Something to keep in mind is that the original Millionaires tax enacted in 2004 was tied to property tax relief for senior citizens. That connection made the bill palatable to some Republican legislators who represented senior citizens who would benefit from the property tax relief but would not be subject to the higher tax rates.

Property Tax Relief: It is said the bill would double Homestead Property Tax Rebates – not triple them as Christie said he would do.

Money not spent on the Homestead Property Tax Rebates would be used to unfreeze the Senior Freeze program, allowing new seniors to participate and raising the amount rebated. This program freezes property taxes for people over 65 who earn less than $80,000. In the current fiscal year, only seniors already in the program were eligible for the rebate and the amount was limited to the amount received in the prior year.

It is said an additional $50 million would be made available to communities with understaffed fire and police departments – aiding Newark, Camden and other communities with high crime rates.

Health Care: It is said the bill would restore $7.5 million in ideological cuts to women’s health clinics and $300 million for NJ FamilyCare and Medicaid to allow working parents to continue to obtain affordable health care coverage.

WILL THIS WORK?

By law, New Jersey must pass a budget by the end of the day on Thursday, June 30th. Passing a budget on time is a deadline the state has always taken seriously.

It is impossible to know now how the negotiations are going – if the Democrats will be successful in their attempt to share the sacrifice among all income groups and help the poor and middle class in this state. The governor vetoed a millionaires’ tax last year and has said he will veto it again. It seems unlikely Republicans would join Democrats to over-ride the governor’s veto, especially in an election year, although redistricting has left some Republicans in more Democratic districts.

In battles of the budget, the New Jersey governor holds most of the cards. He alone has the power to determine revenues and set the limit on funds available for programs. If Governor Christie doesn’t agree the state will collect an additional $800 million next year or if he vetoes the Millionaires’ tax and the legislature can’t over ride the veto, that’s money the legislature can’t spend. In addition, New Jersey’s governor has line-item veto power. Any program he doesn’t want funded can be reduced or eliminated. If this happens, the legislature’s only recourse is to override that veto if two-thirds of the legislators support the override.

The only successful override of a governor’s veto was in 1992. Governor Florio vetoed the entire budget passed by the then Republican-controlled legislature. The Republican budget had cut $1.1 billion from Governor Florio’s proposed $15.7 billion budget. At the time, the Republicans had a 27-to-13 majority in the Senate and a 58-to-22 majority in the Assembly. The override passed both houses with no votes to spare. (It was opposed by all Democrats and, in the Assembly, two Republicans.

Democrats now have a 24-to-16 majority in the Senate and a 47-to-33 majority in the Assembly, making veto overrides more difficult. So far none have been successful. Perhaps it will be this budget – this statement of what New Jersey ought to stand for – that will be the first success.

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Filed under As a Matter of Fact, Budget Battle, Democratic Budget, Democratic priorities, Gov. Chris Christie, Health Care, higher revenue, Millionaire'sTax, New Jersey Policy Perspective, property tax relief

>Captain Joseph Azzolina Memorial Bridge in Highlands/Sea Bright Awaiting Governor’s Signature

>Almost forgotten over all the commotion surrounding Thursday night’s pension and health care reform debate down in Trenton, was the fact that pension and health care were not the only business being debated and adopted that day.

Also approved by the Assembly Thursday night was legislation sponsored by Senator Sean T. Kean and Assemblywoman Mary Pat Angelini that designated the bridge which spans the Shrewsbury River, as the “Captain Joseph Azzolina Memorial Bridge”.
All that is left to making the naming of the bridge in honor of Joseph Azzolina is the signature of Governor Christie, which is expected to soon.

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Filed under Gov. Chris Christie, Highlands Bridge, Highlands New Jersey, Joseph Azzolina, Mary Pat Angelini, NJ State Assembly, Sea Bright NJ, Sean T. Kean, shrewsbury river

>APP: Middletown candidate to drop out of race after drug arrest, party leader says

>Just as I said Friday night, but now it is made official by Democratic Chairman Joe Caliendo, Alex Desevo is off the Democratic tickets a candidate in Middletown and a replacement will be soon be named.

Posted on the Asbury Park Press website just a bout 40 minutes ago:

MIDDLETOWN — A Democratic candidate for Township Committee who was arrested on June 18 on charges of possessing crack cocaine has agreed to resign from the race, a party official said.

Leaders of the Middletown Democratic Party planned to Monday, June 27, to find a replacement for Alexander DeSevo, 43, said Joseph Caliendo, who heads the party.

“Middletown voters aren’t going to want that kind of person,” Caliendo said. “I don’t know what happened with the young man. It’s between him and his conscience.”

DeSevo, a criminal defense attorney, was caught possessing crack cocaine and various drug paraphernalia at the Holmdel Motor Inn on Route 35, where he was staying with two women, police said.

Police became involved after one of the women showed up at the Holiday Inn in Hazlet, more than a half mile away, and said DeSevo had chased her from the Holmdel Motor Inn, according to authorities.

The party has until September to find a replacement for DeSevo, whose name will not appear on the November ballot, Caliendo said.

“This should not be an issue in the race,” Caliendo said. “We believe we have a good chance of winning this November, so we want to find a candidate who can really represent Middletown well.”

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Filed under Alex Desevo, Asbury Park Press, crack cocaine, Democratic Candidate, drug possession, Joe Caliendo, November Elections

>N.J. Republicans look to restore $7.5 million for women’s health care; Action comes after they opposed two Democratic bills to do the same

>Now that it’s coming down to crunch-time with the state budget and the entire state assembly is up for re-election this year, 13 republicans have decided to join the Democratic bandwagon and support women’s heath issues by looking to restore $7.5 million to the budget that Governor Christie decided wasn’t necessary.

These Republicans, lead by Assemblyman Domenick DiCicco (R-Camden), have opposed this measure for the better part of 18 months and are only now joining forces with the Democrats because polling has shown that Governor Christie’s job rating has plummeted among women and they are now vulnerable on the issue.

It’s a classic example of flip-flopping on an issue in order to secure votes in an election year, on an issue that is extremely important to many of their constituents. But I wonder how hard they will actually fight for women’s health funding once the Governor comes down on them?

The following article written by Tom Hester Sr., appeared over on NewJerseyNewsroom.com:

Much to the surprise of Democratic women legislators who have tried for over a year to get Gov. Chris Chirstie to the restore $7.5 million he cut out of the 2010-11 state budget for women’s health care, 13 Republican Assembly members on Friday announced they are sponsoring a resolution to restore the aid to the shaping 2011-12 budget.

Assemblywomen Linda Stender (D-Union) and Valerie Vainieri Huttle (D-Bergen) responded to the announcement by describing the unexpected Republican action as an 11th hour political ploy designed to pander to the women they have abandoned for the last 18 months.”

As recent as May 19, Christie disapproved of restoring the $7.5 million. In the past year, he vetoed Democratic bills to restore the aid. Republican legislators have supported the governor’s position.

The Republican resolution stresses that no money could be used for so-called family planning. Democratic women legislators insist the money would not go toward funding abortions.

The resolution was announced at the end of a week that featured the release of a Quinnipiac University poll that showed Republican Christie’s job rating has plummeted among women. All 120 seats in the Legislature are up for re-election in November.


Assemblyman Domenick DiCicco (R-Camden), the prime sponsor of the new resolution, said, “Everyone wants to provide healthcare for our neediest women and their children and this resolution will make that possible responsibly and compassionately. This funding is an effective use of our resources to make sure that every dollar we spend is used to treat disease or to keep women and children healthy.”

The resolution would allocate the $6.2 million to federal qualified health centers and $1.3 million for New Jersey Cancer Education and Early Detection.

No money would be allotted to Planned Parenthood and the resolution would change budget language from “family planning services” to “women and family health services.”

“This is an effective way to actually funding women’s health services without getting lost in political debate,” DiCicco said. “Anyone who is truly concerned about the well-being of New Jersey’s most vulnerable women and children can support this approach.”

When Sen. Loretta Weinberg (D-Bergen) introduced legislation to restore the $7.5 million on May 19. Michael Drewniak, Christie’s press secretary, said of the Democrats’ action, “It’s predictable that the majority party in the Legislature, led by Senator Sweeney, can’t resist the urge to open the public’s wallet as soon as a few extra dollars become available. We cannot throw out the sensible budgeting practices we’ve put in place just because of a modest increase in tax revenue.”

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Filed under Gov. Chris Christie, Loretta Weinberg, Medicaid, New Jersey Newsroom, women's health issues

>AS a Matter Of Fact…Busting the myth: The real numbers show N.J. is not the most overtaxed state in the nation

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By Mary E. Forsberg and Deborah Howlett
June 26th, 2011

Perhaps you’ve heard a politician or two, in an accusatory tone, declare New Jersey has the highest taxes in the nation. It’s become a rallying cry for the current administration. It is repeated as an indisputable fact by the media. But mostly it just sounds right to people, perhaps because it so neatly fits the cynical narrative of government waste, fraud and abuse.
The thing is, it’s not true.

Consider this from a recent press release by the Connecticut House Republican Party:
“Connecticut residents already pay the highest taxes in America.”
Or this from the Buffalo News editorial page: “New York is the most overtaxed state in the nation.”
Nope. According to the Orange County chapter of the Lambda Alpha economics society, “California is the most overtaxed state in the nation,”
And from a conservative pundit in Chicago: “I live in Illinois … the most overtaxed state in the union.”
But wait. There’s another. The vice chair of the Maine Republican Party has said, “Maine is currently the most overtaxed state in America.”
They can’t all be right.
For the record, New Jersey ranks eighth among all states when state and local tax revenues are compared as a percentage of taxpayer’s personal income, according to an analysis using data from the U.S. Census and the U.S. Department of Commerce, Bureau of Economic Analysis. It’s the cleanest comparison of the tax “burden” in all 50 states. New Jersey’s ranking drops considerably once you get past property taxes and look only at state tax collections.
Simply comparing total revenue collected from taxes in each state would produce a wholly inaccurate comparison because poorer, less-populated states would always appear to tax less. Measuring as a percentage of personal income, or on a per capita basis, provides necessary
context and a more accurate comparison among states.
Consider the big three state revenue sources in New Jersey — income, corporate and sales taxes — and then size up property taxes.

Income tax


On a per capita basis, New Jersey ranks seventh among states for income tax revenues, according to U.S. Census data. As a percentage of personal income, New Jersey ranks 19th among states.
It’s important to understand New Jersey is consistently at the top of lists that rank states in terms of median income and millionaires (those with at least $1 million in investable or liquid assets) as a percentage of households.
With all that wealth, the state also has a progressive income tax that collects significant amounts of its revenue from the wealthiest in the state and virtually none from the poorest, such as married couples whose incomes are less than $20,000 ($10,000 for a single person).
The progressive aspect of New Jersey’s income tax has evolved since the state’s first 2 percent flat tax was enacted in 1976. Public opinion polls show a vast majority approve of raising rates levied on income that exceeds $1 million a year.
Other states also have local income taxes. Philadelphia, for example, levies a 3.928 percent wage tax on residents and a 3.4985 percent wage tax on nonresidents on top of the state’s 3.07 percent flat income tax. Cities in New Jersey are barred from imposing income taxes on workers.
Corporate Tax

Corporate taxes in New Jersey rank ninth as a percentage of personal income and sixth when measured per capita.
New Jersey took in a little more than $2 billion in fiscal year 2010 from corporations, or 7.5 percent of all revenue collected by the state. However, 93 percent of the 252,000 corporations subject to New Jersey’s corporate business tax paid the state less than $2,000 each. Corporate revenues for the year surpassed $24.6 billion.
Sales Tax

Comparing revenue from the sales tax puts New Jersey 19th on a per capita basis and 36th when measured as a percent of personal income.
The state sales tax is often cited as one of the highest in the nation because of its 7 percent rate. However, it is applied more narrowly than sales taxes are in many other states.
Food, clothing and gas are exempt, for example. Depending how one looks at it, that is a loss to the state or a savings to taxpayers of about $2.6 billion.
Nor does New Jersey allow cities or counties to collect local sales taxes, which many other states allow.
Montgomery, Ala., levies a 10 percent sales tax (4 percent state; 6 percent local) on everything sold, including food.
In Georgia, a 12 percent combined state and local sales tax is the norm in some areas of the state.
Property Taxes

What’s abundantly clear, however you slice the data, is that New Jersey ranks among the top one or two states in the nation when it comes to property taxes, which are the only real source of revenue for local government in the Garden State. Last year, property taxes produced $25 billion in revenues, exceeding revenue from the state’s three major taxes.
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In total, as a percentage of personal income, taxes in New Jersey rank about eighth among all the states. Considering it ranks near the top for median income and wealth, that designation hardly seems out of line.
But those are not the numbers pushed by anti-tax zealots. Groups such as the conservative Tax Foundation have cited New Jersey as having the highest tax burden in the nation, using a convoluted formula that doesn’t quite parse the intricacies of local tax laws.
For example, the Tax Foundation charges back to New Jersey the $2.6 billion in income taxes paid to New York by New Jersey residents who work in New York and must abide by New York tax laws, over which New Jersey has no control.
By the way, that $2.6 billion is not just a blip in the data. It is more than New Jersey collects from its corporation business tax, the state’s third-largest revenue source, and it is one of the largest income transfers from one state to another in the country.
All of this just points to the need to be careful when citing state rankings.
Some, such as the Tax Foundation’s, only obscure real facts because they allow politicians to cherry-pick data and use them to justify their political philosophy.
So the next time you hear someone say New Jersey is the most overtaxed state in the nation, look past the rhetoric and consider the real numbers behind the statement.

Check out the tax data tables here.

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Filed under corporate taxes, Debrorah Howlett, income taxes, New Jersey, New Jersey Policy Perspective, property taxes, sales tax, tax burden