That figure is the difference between the two year income projections from the State Treasurer and from the Office of Legislative Services. At a hearing before the Assembly Budget Committee, State Treasurer Andrew Sidamon-Eristoff called the difference “insignificant” while not answering Chairman Louis Greenwald’s question about how to reconcile that difference.
Even though the income estimates have improved, the treasurer admitted that his office has not done any contingency planning in the event of what he calls an “unfavorable” decision by the Supreme Court in the pending school funding case.
While both Sidamon-Eristoff and Greenwald touted the need for property tax relief, the Treasurer’s approach depends on further sacrifices by public workers in their health benefits. Assemblyman John Burzichelli (D-Paulsboro) contended that as the economy improves, the poor and middle class that have assumed the “shared” sacrifice in the past few years should be at the front of the line for relief as the state’s economy improves.
Burzichelli and Sidamon-Eristoff debated the assertion that New Jersey’s taxes are driving the wealthy from the state. The treasurer cited some anecdotal evidence and pointed out that the difference between the highest and lowest tax rates is a factor of five. Yet, he didn’t mention the income ratio between the highest and lowest of the state’s wage earners, which is undoubedtly greater.
Sidamon-Eristoff said the Governor has recommended increasing the contribution to the pension fund, but interestingly his rationale had to do with the state’s credit rating rather than out of any apparent concern for pension holders.
In response to a question from Chairman Greenwald, the treasurer explained that New Jersey’s lag in following the national employment recovery is due to the fact that we are about a year ahead of other states in reducing public sector employment, a “good thing” in his world. He is projecting New Jersey’s unemployment rate will be 8.4% by the end of next year as the private sector starts hiring.
Assemblyman Albert Coutinho (D-Newark) questined the treasurer on the slow pace of jobs recovery in New Jersey. Coutinho pointed out that employers are not hiring because the economy is soft, and we need to do more to stimulate job creation.
The Treasurer cautioned that the improvement of our financial news does not indicate that we should increase state spending. Like Dr. Rosen this morning, Sidamon-Eristoff pointed out the huge structural deficit that still needs to be addressed.
Chairman Greenwald pointed out that today’s session concludes the hearing phase of the budget process. But I’m sure we will be hearing more about the budget between now and November.