NEW JERSEY BUDGET GROWS BY 10 PERCENT

Last week Governor McGreevey introduced his Fiscal Year 2005 budget to the Legislature and the public. The Governor’s address is the beginning of the annual legislative process that concludes with the adoption of the budget at the end of the fiscal year on June 30. As a member of the Assembly Appropriation Committee, and a former member of the Budget Committee, I have seen many pieces of legislation that require a fiscal component. There were some very good things in the budget like: free community college tuition for graduating high school seniors at the top of their class; and overhaul of DYFS; and guaranteed health access for mammograms.

What is problematic is that Governor McGreevey’s current budget has grown by 10 percent from the prior year to $26 billion. Even more concerning is that the budget creates $4 million in deficit bond spending for operating expenses. This is tantamount to mortgaging your house to pay for groceries. What this means to the taxpayer is 20 years from now, long after Governor McGreevey has finished his term, those bonds will have to be paid using that years budget.

New Jersey currently has the highest cigarette tax in the nation. This is a good thing. We want to encourage teenagers not to start smoking, and adults who do, to stop. The Governor wants to increase that tax by $0.45 to help fund the charity care program. While that seems like a worthy increase, I feel that the State has outsmarted itself. By increasing the price, we are creating a situation where it makes sense for smokers, or bootleggers, to go to Pennsylvania or Delaware to purchase cigarettes. Thus we will see very little of the estimated $135 million that this tax is supposed to bring in.

There are other increases that were not mentioned in the budget address. Among these are the Realty Transfer Tax. This tax will be imposed on the sale of a home, and increase the tax of both new construction and resales. Basically what this means is that the seller of an average priced home in New Jersey ($300,000) will be responsible for paying an additional $485 in taxes, paying $2,200 instead of $1,715.

I urge all of the residents of New Jersey to learn as much as they can about how the budget procedure works. It is important because we are all paying for it through various fees and taxes. If you have any questions that you would like to find information on, please feel free to contact my office at asmcorodemus@njleg.org or 732-708-0900. If I can’t answer your questions immediately, I will find the answer and contact you.