A Real NJ Comeback
FOR RELEASE: Mar. 27, 2012
CONTACT: Press Office
Budget Panel Launches Review of Christie Spending Plan Looking Out For A ‘Real NJ Comeback That Includes A Middle Class Comeback’
Sarlo Says Property Tax Relief A Middle Class Priority
Trenton – Senator Paul Sarlo, chairman of the Senate Budget and Appropriations Committee, issued the following statement on Tuesday as the panel launched a critical review of the Governor’s spending plan for Fiscal Year 2013:
“Welcome to the first Senate Budget and Appropriations Committee hearing on the Governor’s proposed FY 2013 Budget. This is the time and the place to fully evaluate the Governor’s budget proposal with an open mind and our best judgment. It is the Governor’s spending plan, but it is our responsibility as a committee to produce a budget that best serves the needs of the people of New Jersey. This is a responsibility we take seriously.
“The importance of our work is heightened by economic reality. These have been challenging times for state finances and these have been hard times for many people – especially middle class families. While there are good signs of a national economy that is turning around; while there are some reasons for hope – we are not out of the woods yet. No one can say the “economic good times are back.”
“So, Mr. Treasurer, and my colleagues on this committee, that is why I sit here today somewhat puzzled by the Governor’s budget proposal. His plan would spend $32.1 billion, the second-largest budget in state history. It assumes a growth in state revenue of 7.3 percent. This is both the most optimistic assumption in the country and a rate more than 50 percent higher than the rates that our neighboring states are using as the base of their budgets.
“In fact, this budget – and the Governor’s rhetoric – have made a very dramatic and a very sudden turnaround. The Governor proposed this nearly record breaking spending level only weeks after he once again proudly told a national audience that he had cut $13 billion in spending when he came into office back in 2010. In fact, he spent two years telling everyone – especially his national Republican audience – that he made the tough choices; he made the hard spending cuts.
“Now, he has a different storyline. Now, he’s talking about the big spending in his budget. Now, he wants to talk about a “Jersey Comeback.”
“We all want a Jersey comeback. We all want good economic news. But we need to be realistic. We need to be responsible. And we need to do the things that will make a Jersey comeback real for the people of New Jersey. We want a real middle class comeback.
“Here in New Jersey, it is obvious that you can’t claim that you cut $13 billion and increase spending by almost 13 percent over two years.
“This budget marks the halfway point in the Governor’s four-year term in office, which means that there’s a record to hold up to the light of day and evaluate.
“In Fiscal Year 2011, the Governor’s first budget, the spending level was $28.5 billion. For Fiscal Year 2013, the Governor proposes to spend over $32 billion.
“What do we have to show for this Governor’s first two years of fiscal management?
- To begin, New Jersey’s unemployment rate continues to be higher than the national average – 9 percent to 8.3 percent now – and significantly higher than other states in the region.
- We are still living with the after-effects of the Governor’s historic cuts in aid to our cities, with layoffs of police, fire and first responders. New Jersey’s towns are receiving about $450 million less than what the State provided the year before Governor Christie came into office.
- Direct property tax relief to homeowners who pay the highest property taxes in the nation? Down $540 million, or about 31%, from the year before he became Governor.
- And, for 90% of New Jersey’s school districts, school aid is down under this Governor. It never recovered from the massive $1.1 billion formula aid cut that he inflicted in his first budget.
- So, although many school districts are thankful for not getting cut again, we are still living with the after-effects of the Governor’s historic cuts in school funding, cuts that took teachers out of the classroom and put upward pressure on property taxes.
“The funding he would “restore” with this budget helps, but it doesn’t make up for the harm he already did. His cuts – and where he cut – really added to the middle class burden.
“In his budget address, the Governor declared that New Jersey’s “fiscal house is now in order,” and presents his budget proposal as evidence of a Jersey comeback. I don’t know who or how many have benefited from his comeback . I certainly don’t see a middle class comeback.
“Which brings us to the most “perplexing” part of his budget proposal: an across the board income tax cut.
“After decimating property tax relief programs in his first two years, the solution in the third year is to ignore the tax that is, hands down, the most burdensome for middle class New Jersey families, The Governor doesn’t even acknowledge the 20 percent increase in property taxes over the past two years as a direct result of his policies; and this budget doesn’t “acknowledge” it either. The hard reality for middle class New Jersey is that any so-called Jersey comeback has not tackled the burden of property taxes.
“According to an OLS study, the real burden for the middle class is the property tax, not the income tax. Those earning $250,000 or less pay more in property taxes than income taxes. Only the richest 10 percent pay more in income taxes than property taxes.
“Yet, before us today, is a proposal that would provide an average tax cut of $218 per year to families earning under $250,000 The total distribution of the governor’s tax cut plan is just as unbalanced: 95 percent of taxpayers would get an average tax cut of $218 while the top 5 percent would get an average cut of $4,632 and the top 0.6 percent will save an average of $22,577.
“As we turn a critical eye to the Governor’s tax cut plan and to his budget proposal we will be looking out for the middle class. We will be looking for what helps the economy. We will be looking for what helps create jobs. We will be looking for what will ease the tax burdens for the middle class who have been hit hardest by the by the hard economy.
“Let’s make sure we do all we can to generate a real New Jersey comeback that includes a comeback for the middle class.
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