TAX NEWS - June 2010

New Jersey Tax: Dems still posturing over tax

TRENTON — How good could this state be if elected officials spent their time working to fix problems instead of trying to one-up their opponents, like kids in a sandbox?

Assembly Democrats will try to override Gov. Chris Christie's veto of the "millionaires' tax," and although they frame it as a heroic effort to provide property tax relief for the disabled and elderly, it is an attempt to embarrass the governor.

As people who have followed this issue know, the Democrat-led Legislature and Democratic Gov. Jon Corzine wrote last year's so-called "millionaires' tax" to expire on Dec. 31, which it did. When it died they knew Christie would be governor in about three weeks and that he was on record as being against any new taxes.

Were they sincere, the Democrats could have passed a new "millionaires' tax" and Corzine could have signed it into law before Christie hit town and figured out which key fits which door in the State House.

Heck, if they really cared about the sad state of economic affairs they would cease with the games and try to get property tax relief for everyone, as Christie is doing with his proposed 2.5 percent cap on tax hikes, something else the Assembly Ds are gaming.

The "millionaires' tax" bill passed with 46 votes. To override it, they need to have all 47 Assembly Democrats onboard plus seven Republicans, which is not very likely. A veto override was made difficult on purpose; it was last tried in 1997.

One of the reasons Christie gave for not wanting the "millionaires' tax" or other new taxes is that they drive from New Jersey the people who create jobs and who have money to spend. That migration is the subject of a Forbes article by Jon Bruner who analyzed IRS data to find out where the better-off folks are going.

Florida and Texas did well. Here's what reporter Bruner said:

"The dominance of the list by Florida and Texas . . . makes sense to Robert Shrum, manager of state affairs at the Tax Foundation in Washington, D.C., since neither state has an income tax."

The other political game afoot is stalling passage of the 2.5 percent property tax cap constitutional amendment. The Legislature has to get its work done by mid-July if it is to be on the November ballot.

Gannett State House bureau chief Mike Symons asked Assembly Speaker Sheila Oliver, D-Essex, about that, and she said she wants to take time with it. She said she especially wants to hear from mayors and school districts.

More than 200 mayors have endorsed the 2.5 percent plan, which allows exceptions for only debt service or voter override. As has the New Jersey Taxpayers Alliance, whose tax-fighting president, Jerry Cantrell, said, "Reasonable voices have continuously warned that out-of-control spending and lack of definitive corrective actions were setting the state up for a colossal property tax crisis."

Spending in many of the 604 school districts, where they routinely hand out generous contracts as if money grows in the Pine Barrens, is a big part of the problem. No need to find out where they stand; they won't like any restrictions on their ability to raise your property taxes to keep the gravy train on track.