TRENTON, NJ (AP) -- The New Jersey Legislature on Thursday approved a recession-year budget that raises $1.3 billion in new taxes on businesses and residents but preserves property tax rebates to homeowners with limited and fixed incomes.
also in the article...budget hightlights
INCOME TAXES | PROPERTY TAXES | SIN TAXES | STATE EMPLOYEES PAY AND JOB SECURITY
EDUCATION | HEALTH COSTS | MUNICIPAL AID
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The last-minute restoration of rebates to 500,000 homeowners became possible because a tax amnesty program collected nearly $500 million from corporations and individuals. Some 1.1 million seniors and low-income residents will receive rebates this fall, about half the residents who got checks last year, to buffer the highest property taxes in the country. Those under age 65 making more than $75,000 and renters will see their rebate suspended in the year ahead.
Gov. Jon S. Corzine, who must sign the budget before Wednesday, when it's due to take effect, praised fellow Democrats and chided Republicans after hearing about the party-line tallies in both houses of the Legislature.
``It is unfortunate that not one Republican member of the Legislature saw fit to support a budget that reduces state spending by 12 percent - an unprecedented downsizing - at the same time it responsibly protects spending on education and provides billions of dollars in much needed property tax relief,'' Corzine said.
The Senate vote of 22 to 17 came at 11 p.m., after two hours of debate.
Before the vote, Republican Sen. Anthony Bucco, R-Denville, called the budget ``the worst in state history.'' But Senate Budget Committee Chairwoman Barbara Buono, D-Edison, said lawmakers ``worked hard to distribute the burden of billions of dollars of spending cuts across the board.''
Earlier, the Assembly debated for four hours before voting 45-34 to approve the budget.
In that chamber, majority Democrats defended the budget as responsible and prudent in harsh economic times. Republicans panned it as over-reliant on federal stimulus money and other one-time revenues, and too burdensome on overtaxed businesses and residents.
``We're in Disneyland; let's all go home,'' Assembly GOP budget officer Joseph Malone of Bordentown told colleagues before the vote. ``If any in this room can feel pride in this budget, they are out of touch with middle-class working New Jerseyans.''
But Assembly Budget Committee Chairman Lou Greenwald, D-Voorhees, viewed the spending plan more positively.
``Even in these tough economic times, we are going to be able to make investments in core programs and services that strike at the heart of our New Jersey values, and we should be proud of that,'' Greenwald said. ``As we look at what is happening in other statehouses across the country, we might also begin to realize that things could be much worse.''
With Corzine and the entire Assembly running for re-election in November, Democrats have been eager to get the bad-news budget behind them.
The budget increases so-called sin taxes on liquor, wine and lottery winnings over $10,000; it raises income taxes for one year on the wealthiest New Jerseyans; and it extends a 4 percent surcharge on corporate business taxes that was to expire.
The budget relies on $2.2 billion in federal stimulus money; counts on savings from a wage freeze and furloughs for state workers; and defers pension and debt payments. It also increases funding for public school education and charity health care; and maintains aggressive anti-foreclosure programs that have served as a national model.
Assemblyman Joseph Cryan, D-Union, a member of the Assembly Budget Committee, said the proposal preserves needed funding for food and utility aid, housing and rental assistance and charity care.
``This budget is difficult,'' Cryan said. ``But it's also an opportunity for us to shape a society that better protects the dignity and basic rights of our brothers and sisters.''
Republicans, however, accused Democrats of making election-year choices that push New Jersey - already one of the most heavily indebted states - to the brink of bankruptcy. They said the budget is particularly onerous on middle-class residents, more than a million of whom will see their rebate checks vanish. Republicans said all that amounts to $2.8 billion in tax increases and a deficit of more than $8 billion for next year.
BUDGET HIGHLIGHTS
INCOME TAXES
- Raises income taxes for one year by .75 percent on family income over $500,000, moving that top tax rate to 10.25 percent.
- Eliminates, for one year, property tax deduction on next year's state income tax for all taxpayers who earn more than $250,000, and caps deductions at $5,000 for those who earn $250,000 or less.
PROPERTY TAXES
- Eliminates property tax rebates for non-senior citizen, non-disabled homeowners with incomes over $75,000.
- Provides two-thirds of last year's rebate amount to homeowners who earn between $50,000 and $75,000. Those rebates are to average about $700.
- Provides last year's rebate amount to all senior citizens, disabled people and to others who earn under $50,000. For senior citizens, the rebates would average about $1,200; for non-seniors with incomes under $50,000, they would average $900.
- Eliminates property tax rebates for renters.
- Maintains property tax freeze program for senior citizens - worth an average of more than $1,000 per household.
SIN TAXES
- Raises tax rates on wine and liquor - but not beer - by 25 percent.
- Increases taxes on cigarettes to $2.70 per pack - up 12.5 cents from the current tax.
- Taxes lottery winnings over $10,000.
STATE EMPLOYEES PAY AND JOB SECURITY
- Freezes salaries for state employees, delaying a 3.5 percent raise that was scheduled to go into effect this year until 2011.
- Requires 10 unpaid furlough days for workers, but gives them get seven paid days off they can use starting in 2011.
- Avoids layoffs for union-represented state workers through 2010.
EDUCATION
- Increases spending in public school classrooms by $374 million.
- Increases college tuition aid grants by $37 million.
- Decreases aid to schools by $94 million, largely by deferring $560 million in pension contributions for school employees.
- The federal economic stimulus contains $2.2 billion that goes directly into various items in the budget _ much of it for education.
HEALTH COSTS
- Decreases money to hospitals by $20 million.
- Increases aid to county psychiatric hospitals by $15 million.
- Expands Family Care program to provide health care for children by $149 million.
MUNICIPAL AID
- Decreases aid to cities and towns by $31 million.
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