The $29.8 billion state budget proposed by Gov. Jon Corzine last week includes good and bad news for Bayonne, local officials say.
The budget – if passed as proposed – would increase taxes statewide by $1 billion and cut back on some tax benefits homeowners currently enjoy.
Households with a combined income of more than $75,000 would face increased tax burdens.
“It is clear that Gov. Corzine left no stone unturned in his quest for budget cuts and savings.” – Mayor Mark Smith
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“There’s pain enough to share in this budget,” said Smith. “It is clear that Gov. Corzine left no stone unturned in his quest for budget cuts and savings. To slash $4 billion in state spending is no small feat and it is reflective of the serious nature of the current economic crisis.”
Changes from the past include raising the tax rates on incomes over $500,000, taxing lottery winnings over $10,000 for the first time, and continuing the 4 percent surcharge on corporate taxes.
So called “sin taxes” would see an additional tax of 12.5 cents for each pack of cigarettes and increasing taxes on alcohol by 25 percent.
With the exception of senior citizens, homeowners, with incomes above $75000, would lose the ability to deduct property taxes from their income taxes for one year.
Property tax rebates would remain unchanged for seniors and homeowners with an income under $50,000; a cut of one-third for those with incomes between $50,000 to $75,000; and no rebates for those with a family income above $75,000.
Good for education, hospitals
Assemblyman Anthony Chiappone said the good news is that the state budget will add $200 million in state aid to schools.
“In Bayonne, that’s good news, as our school aid will appear to remain unchanged, accounting for another $8 million above 2007 figures for the second budget year,” he said. “Senior rebates will be preserved and seniors will receive the same amount as last year.”
Of critical importance for Bayonne and Jersey City, Chiappone said, is the fact that this budget shows no significant reductions statewide for Charity Care. Charity Care helps the uninsured with medical bills.
“With Bayonne Medical Center struggling to stay afloat, and Jersey City Medical Center facing huge Charity Care costs as well, this part of the budget allocating the same levels of Charity Care to our hospitals is literally a life and death aspect of the budget, which recognizes the dire plights of our hospitals,” Chiappone said.
Smith agreed.
“The governor obviously went to great pains to defend education funding, children’s healthcare, hospitals and homeland security. This is a budget that defends working class family values,” he said.
The new budget includes $25 million for preschool expansion, an increase in direct school aid by $300 million, and funding for food banks, hospital Charity Care, and worker retraining. Smith said the governor rescued schools from devastating aid cuts.
Corzine has been negotiating with state employee unions for wage givebacks and job furloughs that will go along with his spending cuts. He has also proposed a one year tax increase on people making over $500,000 a year. Spending cuts include reductions in the Homestead Rebate Program and personnel reductions through wage freezes and furloughs. Faced with declining revenues, the governor has to cut expenses while curtailing programs and services.
“In these trying times, I have to commend Governor Corzine for taking a serious, hard line approach at cutting state spending while still maintaining baseline programs which provide the safety net for our seniors, our children and the handicapped and disabled,” said Smith. “This is a very tough budget that has pain for everyone but it is a responsible spending plan given the dire fiscal nature of these times.”
Smith said the tough choices the governor had to make are similar to the ones the city administration is considering.
“One thing is for sure, the people can’t pay any more in taxes,” said Smith.
Chiappone said on the negative side, state colleges are facing cuts, with New Jersey City University slated to receive $1.5 million less than last year.
“Although tuition programs have increased, I have concerns that if the state colleges do not implement sufficient recommended furloughs, tuitions may have to be increased,” Chiappone said. “To me, this is unacceptable.”
He also takes objection to the furlough polices that impacts lower salary state employees.
“Instead, I will seek to have increases that were made in administrative salaries rolled back so that lower tier workers do not have to make unnecessary sacrifices,” he said. While municipal aid has been cut, a plan that is being put before the state legislature would allow municipalities to defer some of their pension costs, which could trim millions off both Bayonne and Jersey City budgets.