Governor Christie yesterday obliquely said he will not sign the version of a bill to increase the state minimum wage that passed the Assembly, and he continues to oppose a millionaire’s tax. Screw the poor and help the wealthy is his way toward a Jersey Comeback. It’s not working. The legislature, however, after passing Marriage Equality, rejecting two ill-chosen Supreme Court nominees, pressing the brake pedal on Christie’s education agenda, and proposing separate Assembly and Senate property tax relief programs is showing more pushback.
In the meantime the Office of Legislative Services based on May data now projects an additional $50-100 million reduction in revenue collections through June 2013, increasing the total shortfall to $1.4 billion. Governor Christie has modified his budget to reflect only a $705 million shortfall.
Particularly troubling has been the June report from U.S Dept. of Commerce:
“In 2011 real GDP increased in 43 states, with a national average of +1.5%. In NJ GDP decreased by 0.5%, and ranked 47th. The category of Real Estate, Rental, & Leasing contributed the largest percentage decrease for NJ: down 1.14% vs. an average decline nationwide of 0.32, ranking NJ 50th. Other declines were in Educational Services, Government, and Accommodations/Food Services.”
The sharp decline in Real Estate, Rental, and Leasing is disturbing not only because we rank 50th but because this category is so essential for any robust growth. In fact the just issued NY Federal Reserve Bank’s Indexes of Economic Indicators “for April show economic activity grew at a modest pace in New Jersey,” not at the much higher rate projected by Christie in his revised budget.
Christie has now given up on his 10-% tax cut plan which would have been a bonanza for the wealthy, and he signaled publicly at an AARP conference in Trenton that he would compromise with something akin to the Senate’s property tax relief program. However, given that to meet even his new reduced projection of revenue he must increase borrowing against the transportation fund, redirect affordable housing funds, and use other gimmicks, it is apparent that he will not have the monies to meet basic obligations and fund a property tax relief program.
The parallel Assembly bill calls for a millionaire’s surcharge, and yesterday Sen. Barbara Buono (D-18) said she will introduce Senate legislation instituting a millionaire’s tax and dedicating the revenue generated to fund the Senate property tax relief plan. If Governor Christie were to acquiesce to a millionaire’s tax, which is doubtful, there might be sufficient monies for property tax relief. Otherwise, the legislature should wait until later in the year, and review the level of incoming tax revenue before making any decision.
With Christie at the helm New Jersey is not enjoying a comeback. Its economic growth is modest, its unemployment rate is at a high 9.1%, and it is doing poorly in comparison with other states. Fortunately the legislature is pushing back, and it is not a minute too soon as the budget must be finalized by the end of this month.