New Jersey – Gov. Jon Corzine is considering raising income taxes on New Jersey’s wealthiest residents, a wage freeze and 12-day furlough for state workers, and increases in the cigarette, wine and liquor taxes, according to people familiar with budget negotiations.
Corzine, who will release his budget next week, is considering a 5 percent surcharge on the taxes paid by residents with incomes of $250,000 or higher, according to four people familiar with the budget who requested anonymity because they are not authorized to discuss the governor’s plans.
The Democratic governor is also weighing increasing the cigarette tax by 10 cents a pack as well as hikes to wine and liquor taxes as he grapples with a $7 billion shortfall. The liquor tax increases would not affect the tax on beer.
In total, the tax hikes would produce about $400 million in revenue, those familiar with the budget said.
Another $400 million in savings could come from freezing wages for state workers as well as requiring them to take off 12 unpaid furlough days, or one each month starting in July, according to an administration official.
The spending plan, which Corzine has projected in the $29 billion range, is still being finalized. Corzine is scheduled to present his budget proposal to the Legislature a week from Tuesday.
Corzine’s spokesman, Robert Corrales, declined comment.
Corzine’s plan would increase taxes on those with incomes over $250,000 by 5 percent of their current income tax bill. For example, a resident paying $10,000 would pay $10,500. The levy would affect about five percent of New Jersey’s population, and would only be charged for one year, according to the administration official.
(Source: NJ Star Ledger)
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4 Responses
It is a flaw in our system that the state’s have to balance their budget, forcing them to do dumb things during a recession. It might be better for the Federal government to give them a huge cash grant, directly, using money “created” by the Treasury and the Federal Reserve Banks. Tax increases and service cuts are unwise at this time.
A furlough is optimistic. Being realistic, they should cut pay scales (as was routinely done during the previous depression). Furloughs are more of an annoyance.
This is standard procedure. The governor’s office “leaks” out disastrous information to de-sensitive the public, and to test the public outcry.
However, the communist in Trenton does not seem to realize one important fact. Any person subject to this “surcharge” will not end up losing at their bottom line. They will simply remove/fire or lessen hours from some employee to compensate for the new tax.
The person on the bottom will always end up losing. Its that simple. But it sure sounds better to the uninformed lower class. Class envy usually works.
Until your fired.
I agree with #1. Public service pay scales are ridiculously overblown, especially when you are knowldgeable enough to find and add in the enormous fringe benefits that are bundled in. Years and years of guaranteed 5% pay increases and no changes to benefit packages that have increasing costs to the governments has made working in the public sector a lot better than it should be.
Sure, why not? Raise the cost of everything and give less and less in return. Is NJ expensive enough? Does the Governor have any ideas on attracting new business to the state? It doesn’t matter.