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Urges adoption of additional taxes on SUVs and corporations to protect vital services
The Better Choices Budget Campaign today responded to testimony from New Jersey Treasurer David Rousseau on Governor Corzine's plan to close a staggering $9 billion gap in next year's budget. While the groups applauded the Governor's willingness to share the pain of the recession by increasing taxes on wealthy New Jersey residents, they maintained that the budget still asks too much of working families and pushed for full adoption of their three-tiered plan, including an increase in surcharges on corporations and a tax on gas guzzling SUVs. The Better Choices Budget Plan would raise an estimated $240 million in funds when the state is suffering an unprecedented drop in revenue.
At a press conference, representatives of the 38 member coalition urged Governor Corzine to pass additional revenue measures before passing a painful budget that raises property taxes on homeowners and tenants and cuts deeply into health care, environmental protection, and other vital services.
"The Better Choices Campaign has been calling on Trenton to share sacrifices more fairly for over a year, and the new income tax rate for wealthy New Jersey residents is another step in the right direction. But this budget still asks too much of lower and middle class New Jersey residents in terms of loss of vital government services, funding for critical programs and property tax relief," said Eva Bonime, Executive Director of the New Jersey Working Families Alliance and coordinator of the Better Choices Budget Campaign.
Treasurer Rousseau testified on Tuesday before the Assembly Budget Committee on a new plan to close an additional $1.6 billion gap precipitated by a drastic drop in revenue. The Governor's proposal raises income taxes on those making over $1 million per year by .5% and creates a new tax bracket for residents making between $400,000 and $500,000, raising their rates to 8%. In addition, the Governor is suspending the property tax deduction for residents making over $150,000, which is expected to draw an additional $160 million in revenue.
The Treasurer also announced a suspension of property tax rebates for those making under $75,000, except for senior citizens and the disabled, raising a total of $460 million in funds for the state. The suspension will end rebates this year for 740,000 homeowners and tenants.
"The rebate suspension amounts to a property tax increase on lower and middle-class tenants and homeowners in a time when many are rightfully worried about eviction and foreclosure," said Matt Shapiro, Director of the New Jersey Tenants Association.
The measures come with new cuts, including a suspension of an expansion of school aid to pre-K, a $25 million cut to municipalities, and $150 million in cuts to state departments. These new cuts come on top of $4 billion in cutbacks to after-school programs, reductions in Medicaid reimbursement for nursing home residents and increased out-of-pocket prescription drug costs, as well as dramatic drops in funding to the Department of Environmental Protection, the Department of Health and Senior Services, and New Jersey Transit.
Last week, the Better Choices Budget Campaign unveiled a plan to raise additional revenue through three measures. The first would also create a new tax bracket, but would set the floor at residents making $300,000 per year instead of $400,000 and tax the bracket at 8.5% instead of 8%, as the Governor currently proposes. The Better Choices bracket affects 4% of New Jersey residents and would draw an additional $20 million in new revenue.
The second measure would triple fees on gas guzzling vans and SUVs that weigh over 5,000 lbs. Registration for gas guzzlers less than two years old would go from $84 to $252, and from $71.50 to $214.50 for vehicles over two years old. The measure would raise $140 million. The third proposal would raise the current 4% surcharge on corporate business tax to 8% and draw in an additional $80 million in funding.
"We believe elected officials in Trenton should consider commonsense and environmentally sound measures like asking more of polluters, corporations, and residents making over $300,000 a year before considering more budget cuts and tax increases for middle and lower class families," said Mary Forsberg, Interim President of New Jersey Policy Perspective.
Coalition representatives maintained that they would continue their statewide campaign of door-to-door canvassing, town hall events and its grassroots letter-writing, phone calls, and e-mail drives.
"The wealthy and polluters need to pay more of their fair share than the Governor currently proposes, and our working families and most vulnerable residents can't afford to pay more either programmatically or financially. We are urging our elected officials in Trenton to take another crucial step forward and adopt the Better Choices Budget Plan in full." said David Pringle, Campaign Director for the New Jersey Environmental Federation.
The Better Choices Campaign was formed last year by environmental, housing, labor, education and community organizations to call for an end to short-sighted budget cuts and increased investment in New Jersey's future. Last year, many of the coalition's revenue proposals or versions of them appear in the state's FY10 budget, including:
* Adjusting the state income tax to more closely reflect ability to pay. The FY 10 budget increases the rate on people making more than $400,000 from 6.37 to 8%, those making $500,000 to 10.25% from 8.97%, and those making $1 million from 10.25 to 10.75%.
* Curbing business tax breaks and loopholes, including repealing sunsetting provisions for minimum tax on corporations with gross receipts of $100,000 or more and 4 % surcharge on corporate business tax liabilities for other corporations. The FY 2010 budget recommends keeping the 4% surcharge on corporate business tax liabilities. The minimum tax on corporations will remain. It is estimated that extending the 4% surcharge will bring in $80 million in FY 2010.
* Levying a 5 percent tax on lottery winnings. New Jersey currently does not tax lottery winnings, while, the federal government and 24 states do. State rates range from 3.4 percent to 8 percent and usually exempt from taxation winning under $600. The FY 2010 budget levies a new tax on lottery winnings over $10,000. This is estimated to bring in $40 million.
— ANDY LAGOMARSINO, NEWJERSEYNEWSROOM.COM
