Interest
groups to address budget
Corzine's proposals cause
concern
Saturday, March 04, 2006 • BY JOE DONOHUE •
Star-Ledger Staff
Gov. Corzine will meet with a variety of
special interest groups Monday to give them the bad news
about the budget and hear their ideas for dealing with
it.
He'd better brace for an
earful.
Two groups that will be attending the
all-day "budget summit" at Rutgers University, the New
Jersey Business and Industry Association and the New Jersey
State League of Municipalities, already are nervous the
governor is hinting at raising taxes or cutting state aid --
or both. The governor will introduce his budget March
21.
The summit, which is open to the public,
is being held from 9 a.m. to 2 p.m. at the Rutgers
University Student Center in New Brunswick.
Arthur Maurice, a lobbyist with the
business group, said Corzine's recent mention of a possible
gross receipts tax like one used in New Mexico made business
owners nervous. "We're hoping he doesn't propose it, because
we think it's just not appropriate for our economy," Maurice
said.
Likewise, William Dressel, the league's
executive director, said mayors are distressed over recent
reports that Corzine has directed departments to consider
cutting state payments to municipalities, counties and
school districts. Last year, municipalities alone received
$1.8 billion from the state.
"If state property tax relief funding to
municipalities is cut -- or even held level for yet another
year -- property taxes will go up even more than they
otherwise would," Dressel said.
That would create a heavier burden on
low- and moderate-income taxpayers because property taxes
eat a bigger share of their income, he said.
School boards, which received $9.4
billion from the state this year, also are on red alert.
Yesterday, acting Education Commissioner Lucille Davy
notified school administrators they should "plan
conservatively" because they may get less state aid next
year.
Anthony Coley, Corzine's spokesman, said
Monday's session will include comments by the governor,
along with presentations by the current treasurer, previous
state treasurers who served on the transition team and
cabinet members. The intent, he said, is to "bring together
New Jersey's leaders, policymakers and experts in an effort
to foster discussion and understanding about the state's
multibillion-dollar budget crisis."
Corzine mentioned the possibility of a
New Mexico-style gross receipts tax on a Feb. 16 radio
appearance. That caused shivers because New Mexico imposes a
gross receipts tax, which is like a sales tax, on 156
services, from legal work to billiard parlors to diaper
services, according to a study by the Federation of Tax
Administrators. By contrast, New Jersey taxes just one-third
that number.
Corzine could raise a bundle -- perhaps
$2 billion or more -- by imposing a gross receipts tax, or
by greatly expanding the items subject to the 6 percent
sales tax. But Mitchell Hersch, chief executive officer of
the Mack Cali development firm, said it could make the
state's oppressive business climate even less
inviting.
"The reality is that unless we can allow
business to prosper in New Jersey, it will be a very
short-term fix," he said.
Corzine will be following up his Monday
summit by trying to explain the budget crisis to citizens at
meetings Tuesday at Montclair University, Wednesday at
Monmouth University and Thursday at Rowan University. All
three town meetings will start at 7 p.m.
Joe Donohue covers state government and politics. He may
be reached at jdonohue@starledger.com or (609) 989-0208.
© 2006 The Star-Ledger. Used by NJ.com with
permission.
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