Rebates On The Chopping Block, Tax Increases Loom As Corzine Tries To Balance Budget

TRENTON – Don’t look for a property tax rebate check this year. Unless you’re a senior citizen, it’s probably not coming.

In a meeting with the Legislature’s top Democrats next week, Gov. Jon Corzine suggested that curtailing the popular property tax rebate program may be necessary to balance the state’s budget. Last year, New Jersey spent $1.7 billion on property tax rebates; $1.1 billion went to non-seniors.

Corzine and state lawmakers emphasized the senior citizen tax rebates would not be cut. “I can’t imagine the circumstances where any of the senior rebate programs are under threat,” the governor said.

Republicans were critical of Corzine, suggesting that he should find the budget savings in other areas such as special municipal aid distributed to certain cities or from employee overtime costs.

“I think the property tax rebate program is the only thing that we have in state government at the moment that provides any kind of tax relief to our citizens, and I think this Legislature and this governor should be very careful before they take that away,” said Chris Christie, a Republican candidate for governor.

The governor also talked about other options, including potential tax increases. Corzine is reportedly considering a five percent surcharge on the taxes paid by residents with incomes of $250,000 or higher. He is also said to be considering hikes to taxes on cigarettes, wine and liquor.

In total, the tax increases are expected to produce about $400 million in additional revenue.

Sen. Raymond Lesniak (D-Union) said he’s not against raising the cigarette tax but views an income tax hike on the wealthy as “a huge mistake.” As New Jersey tries to attract businesses, particularly those fleeing Manhattan during the recession, “it would be very counterproductive” to add to the tax burden of top executives, he said.

Mary Forsberg, acting president of New Jersey Policy Perspective, a liberal think tank, praised the idea of raising taxes on New Jersey’s wealthy residents “because the budget needs it and those are the people who can afford to pay.”

“They’re not as grossly overtaxed as they think they are. For people whose incomes are under a million dollars, they are paying less taxes in New Jersey than they would be in New York state,” she said.

In a radio interview this week, Corzine mentioned the possibility of requiring state workers to take 12 unpaid furlough days to reduce government payroll costs without resorting to layoffs. The governor is also said to be considering freezing wages for state workers.

The state’s largest public employee union, the Communications Workers of America, has said it is “an unfair labor practice” for Corzine to order furloughs or a wage freeze outside the collective bargaining process.

Corzine will formally present his budget to the Legislature next week. It is expected to be in the $29 billion range, down from the $31 billion revised budget this year.

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