TRENTON – On Tuesday, Gov. Jon Corzine proposed a $29.8 billion budget to the state Legislature in a speech at the Statehouse in Trenton. Although the budget includes many cuts and tax increases, it also includes funding for pre-kindergarten education for 50,000 children.
Homeowners who make more than $75,000 a year will not get a property tax rebate check next year under Corzine’s budget proposal. The program will be limited to seniors and families making less than $75,000. To help fund the remaining rebates, the governor has proposed eliminating the property tax deduction on state income taxes next year for everyone but seniors.
The governor proposed a $400 million reduction in the state payroll through furloughs and a wage freeze, but warned that layoffs were also a possibility. “I believe it is far better for employees to share in these reductions and continue working than it is for savings to be achieved by the layoff of up to 7,000 workers,” Corzine said.
Businesses and the wealthy will see tax hikes under the governor’s proposal. Families making over $500,000 would be subject to an income tax surcharge. Corzine also warned businesses that the state could not afford another $500 million payment to the unemployment insurance trust fund to avoid a mandatory tax increase. In addition, the governor proposed a tax increase on alcohol and cigarettes.
Corzine proposed to reduce state pension funding further weakening the chronically under-funded system. “In better times, such an action would be unacceptable. But this is a time of unprecedented economic stress. It is the right choice to make,” Corzine said.
Republicans were critical of Corzine’s budget proposal, which is $1 billion less than his first budget plan from 2006. “Governor Corzine assured us in previous years that each of his budgets were cut to the bone and that he couldn’t possibly make additional cuts,” said Assemblyman Richard Merkt (R-Morris). “Given that his prior statements were the ‘truth,’ how can anyone possibly believe him now?”