04/25/2008
Corzine freezes property tax rebates
In an effort to save the state $85 million, Gov. Jon Corzine has announced that property tax rebates will not increase this year. The rebates, for those that qualify for them, will equal 20 percent of 2006 property tax bills, not 20 percent of 2007 bills. The bottom line is that most households with a total income of less than $100,000 will receive the same rebate this year as they did last year -- even as their property taxes increased.
Assembly Speaker Joseph J. Roberts Jr. called for ending the current practice of mailing property tax relief checks and instituting a state income tax credit instead. "Essential property tax relief needs to be provided in a more efficient way," Roberts said. "Allowing taxpayers to apply for their property tax rebate through their income tax forms makes common sense." Last year it cost New Jersey about $10 million to process and distribute the rebate checks. The speaker plans on introducing legislation creating the tax credit next month when the Legislature returns to Trenton.
Unemployment insurance fund tax hike
Gov. Corzine recently proposed putting $260 million into the unemployment insurance fund to avoid an automatic $350 million payroll tax increase on the New Jersey business community. Federal law requires the state to maintain a minimum balance in the unemployment insurance fund, and if the balance dips below that level on March 31 of any year, employers' unemployment insurance contributions increase automatically on the following July 1.
In an effort to avoid implementing this tax, the governor has proposed moving the trigger day to June 30 and infusing the unemployment insurance fund with cash from the state's general fund surplus. This infusion would repay some of the $4.7 billion in unemployment insurance funds that have been diverted since 1993 to balance past budgets. Gov. Corzine has made the restoration of the fund a priority. His administration has never authorized or approved a unemployment insurance diversion.
New Jersey lost 10,000 jobs in the first two months of the year, which has precipitated more New Jersey residents using the unemployment insurance fund. Sens. Sweeney and Kean, while offering support for this shift, have proposed legislation that would block any future "raids" on employer and worker generated state funds to avoid this type of crisis in the future.
NFIB/New Jersey continues to monitor this issue and its potential impact on our members.
Department of Agriculture saved
Gov. Corzine recently backed off his unpopular plan to abolish the New Jersey Department of Agriculture, saying he is considering "alternate budget reductions." He announced last week that any spending cuts restored by the Legislature must be replaced by reductions elsewhere. He told reporters that, "We will have to figure out where we have financing to substitute for things people feel, maybe properly so, are priorities they would rather sustain. I many not be in total agreement, but I'm open to it."
The Senate Budget Committee members agreed. Senate Majority Leader Steve Sweeney said, "We have a lot more issues that are a lot more important for $500,000. This is a fight we don't have to fight."
Recently, in an effort to show their united opposition to the governor's proposal to eliminate the Department, New Jersey farmers brought their tractors and livestock to the Statehouse. More than 1,000 farmers gathered outside the governor's office protesting the elimination of this critical department.
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