N.J. budget cuts, tax hikes urged
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Friday, January 27, 2006
By JONATHAN TAMARI
Gannett State Bureau
TRENTON
In a sweeping set of recommendations that includes doses of pain for taxpayers, schools, state workers and government, a group advising Gov. Jon S. Corzine calls for broad tax increases and spending cuts in order to bring long-term reforms to New Jersey's budget.
Recommendations for possible reforms include a temporary tax rate surcharge, a broader sales tax, including the prospect of taxing clothing purchases, a higher gas tax and taxes on 401(k) retirement plans.
The report by Corzine's Budget and Reengineering Government Transition Policy Group also calls for across-the-board cuts in current state spending, a new office to streamline state government and improved financial oversight.
The changes are aimed at reversing what the authors called two decades of overspending that has racked up debt and left the state without money to pay for road projects and school construction.
"Failure to implement fundamental change will have grave consequences," such as higher property taxes and reduced state services, the report said. It later adds, "Clearly, sacrifices will have to be made. Pain will have to be shared."
Corzine's office cautioned that the report was only a draft, but Republican lawmakers quickly assailed the pitch for tax increases.
The six-page memo, densely packed with what it calls difficult choices, recommends raising the retirement age for public workers and revising the list of school districts that get millions in additional state aid each year under the Abbott vs. Burke state Supreme Court rulings.
The recommendations are called "a blueprint for reform," rather than a plan for one specific budget. Corzine will likely unveil his first budget in March, leaving little time for such widespread changes.
Corzine's aides stressed Thursday that the report was not final.
"This is a draft of a draft," said Corzine spokesman Anthony Coley. He said the final report could be released as early as today.
Republicans immediately criticized the tax plans, and some Democrats said other options should come first.
"It is troubling that before he has even had an opportunity to explore possible spending cuts the governor is being urged to increase taxes," Assembly Minority Leader Alex DeCroce, R-Parsippany-Troy Hills, said.
Assemblyman Louis Greenwald, D-Voorhees, the budget committee chairman, said he supported plans to make government more efficient but not tax increases.
"I don't think you ever look to raise a tax until you've exhausted government waste," Greenwald said, echoing comments he made last year when the Assembly beat back similar plans for tax hikes. Lawmakers also added millions for discretionary grants.
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