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New measures could generate $240 million in additional revenue
BY ROB DUFFEY
BETTER CHOICES BUDGET CAMPAIGN
COMMENTARY
The Better Choices Budget Campaign urged lawmakers to enact more revenue raising measures to fill the multi-billion dollar gap in the FY 2010 budget and denounced recent calls to limit revenue as potentially disastrous in a budget that already makes over $4 billion in deep cuts to environmental protection, health care, and property tax relief for lower and middle income residents.
"Too many of these planned cuts go to critical services like job training, after-school programs and health care programs that help working families weather an economic downturn," said Eva Bonime, Executive Director of the New Jersey Working Families Alliance and coordinator of the Better Choices Budget Campaign.
In the weeks leading up to last Thursday's introduction of the $28.6 billion budget into the legislature, there has been vigorous debate over how to fill the $6 billion gap between projected expenditures and revenue. Recently Republican lawmakers and business lobbyists have targeted newly proposed revenue streams such as increased income taxes on wealthy residents and ‘sin' taxes on cigarettes, alcohol, and lottery earnings. Among the objections to the proposals were statements that the wealthy residents and corporations would leave the state. But the Better Choices Campaign maintained that cutting services in a recession was poor policy and targeted revenue increases make good economic sense, and cited several recent analyses. They pointed to a 2008 study by Douglas Massey, Cristobal Young and Charles Varner of Princeton University, who found that the "half-millionaires" tax passed by Governor McGreevey had little to no effect on the migration rates of wealthy New Jersey residents.
Campaign representatives also noted that over forty of the state's top economists and public policy experts wrote to Governor Corzine arguing that in a recession it is unwise to balance budgets by cutting services and support for lower and middle income residents. They asserted that it was preferable to increase taxes on those most able to shoulder the burden.
"While we agree that the state has deferred its responsibilities and relied on one shot gimmicks to cover up its fiscal woes, the answer isn't cutting vital programs. If we are facing a revenue shortfall, the answer is more revenue and not less," said Rex Reid, political representative from AFSCME Council 1, an endorsing member of the Better Choices Budget Campaign.
The campaign also pointed to a 2008 survey conducted by the Bloustein School at Rutgers University which found that over 95% of 150 top executives claimed they would stay in New Jersey for the quality of its workforce, education, and healthcare.
"It's things like good schools, top notch health care, and clean air and water that will keep business in New Jersey. That's why we need to invest in our state's quality of life during good times and bad," said Jeff Tittel, Director of the Sierra Club New Jersey Chapter, a Better Choices sponsor.
The Better Choices Campaign reiterated their call for additional revenue measures to help mitigate budget cuts. Ray Castro, senior policy analyst at New Jersey Policy Perspective, outlined the Better Choices Budget Plan, which could produce an additional $240 million in funds to mitigate some of the more severe budget cuts.
The first proposal would raise income taxes on New Jersey residents making between $300,000 and $500,000 to 8.5%.
The second measure would raise the current 4% surcharge on corporate business tax to 8% and net an additional $80 million in funding.
The private sector will save us if we only give it a fighting chance.