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Some Emerged Winners, and Others Losers in N.J. Budget

Thursday, July 3, 2014   (0 Comments)
Posted by: Greg Mayers
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Some Emerged Winners, and Others Losers in N.J. Budget 07/01/2014

Governor Christie lived up to his promise to veto tax hike proposals that he said would hurt New Jersey businesses and high-income earners. He also spared funds for cancer research in the $32.5 billion budget he signed on Monday.

But funding for property tax relief in the budget was reduced slightly, and that relief won’t go out until next year after Christie thwarted an attempt by the Democratic-controlled Legislature to instead have the relief paid out next month. The state payment into the public employee pension system, once slated to be $2.25 billion, was also reduced to $681 million in the final version of the budget signed by the Republican governor, a decision that unions say they will now challenge in court.

Among the winners in the new budget are businesses and corporations, millionaires, school districts, meadowlands district property owners, and cancer patients. Tax cuts for businesses and corporations have been ramped up to $616.5 million, and Christie has vetoed a 15 percent corporate surcharge proposed by senate Democrats. Concerning millionaires Christie also vetoed a 10.75 percent tax on income over $1 million, a tax that would have brought in about $725 million in new revenue.

Among the losers in the new budget are public workers and retirees, low-income and senior property owners, low- wage workers, women’s health clinics, and New Jersey’s credit rating. Regarding public workers and retirees, the severely underfunded pension fund’s payment was cut to just $681 million in the new budget, which positions the drowning fund in even worse shape for the future. The new budget decreased funding for the homestead property tax relief program in addition to administering delayed payments. This means homeowners who qualify for the program, seniors making up to $150,000 annually and other homeowners earning up to $75,000, will have to go more than a year without any relief even though property tax bills increased on average by $103 in 2013.

Finally, Christie made a series of spending cuts and other one-time budget adjustments this year after tax collections failed to live up to the governor’s revenue targets, and Wall Street ratings agencies took notice. They cited continued underfunding of the state’s pension system, the broader budget problems, and a lingering sluggish economy in a series of credit rating downgrades that’s left New Jersey’s bond rating better than only Illinois among all the states. And they warned additional downgrades, which can increase the state’s borrowing costs, could be coming.

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