State Budget - Record - New try at ending impasse

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Published in the Bergen Record, Sunday, June 256, 2006

New try at ending budget impasse

Sunday, June 25, 2006

By JOHN P. McALPIN
TRENTON BUREAU

Legislators facing a constitutional deadline and a governor dead set on raising the sales tax will meet today to try and end a budget impasse that has raised fears of a state shutdown.

One compromise offered would approve Governor Corzine's call to raise the sales tax, but dedicate at least $600 million of the new money to property tax relief. Assembly Speaker Joseph Roberts, D-Camden, was cool to the idea, and questioned the need for the tax increase if legislators can find cuts in the $30.9 billion budget proposal.

"If we can find $500 million in other responsible cuts or revenue raisers, as I believe we can, then is a sales tax hike really necessary in the first place?" Roberts said Saturday. Senate President Richard Codey, who crafted the compromise, could not be reached for comment.

Assembly Democrats are focused on budget cuts as a way to eliminate Corzine's proposal for $1.9 billion in tax increases, the largest of which raises the sales tax from 6 cents to 7 cents on the dollar. Lawmakers must find about $1.1 billion to replace the sales tax increase.

"The governor honestly believes a penny is necessary. We respectfully have a different opinion and we are trying to convince the governor of responsible alternatives for reaching the shared goal of a balanced budget," Roberts said.

Assembly Republicans offered a package of $2.2 billion in budget cuts that many Democrats quickly called unworkable. But some of the GOP alternatives may find their way into the final budget and Democrats have at least $200 million in budget cuts already offered to Corzine.

"Their suggestion to cut commissions and boards by $3.5 million is something new we'll look at," Roberts said. "There may be others, but we've been reluctant to release all of the various ideas that we have been discussing at the negotiating table. Clearly, they understand the public's conclusion that we should try to identify cuts before raising taxes."

Still, both sides remain so far from a final budget deal that Corzine has said that the state will be shutting down parks, road projects and even Atlantic City casinos if a budget is not passed by next Friday, the constitutional deadline. This past Friday his administration made public a series of memos that outlined just how many services could be halted until the deal is done.

"To be honest, the Friday memos were not terribly productive," Roberts said. "But, that said, we are as determined as ever to join hands with our Senate colleagues and work with the governor to work out our differences and hammer out a budget that works best for New Jersey taxpayers."

Corzine spokesman Anthony Coley declined to detail the progress on the budget talks.

"Discussions will continue," Coley said. "The governor is hesitant to have budget negotiations in the newspapers."

Change in style

The last-minute budget tensions between Corzine and the Legislature, reflect in part, Corzine's transition from a CEO-style of fiscal management, where upheaval of a restructuring may take several years to produce a positive result, to a more political style of governing, where upheaval is avoided at all costs.

Corzine bluntly laid out a "hard choices" budget in March. He sternly warned that it may be painful, that it was going to mean cuts and tax increases, but it was necessary to put the state on a sound-footing for the long-term.

"The task must go forward -- no matter how tough the choices -- with a readiness to share the sacrifices," he said in his March 21 speech.

That perspective has put him on a collision course with Roberts, a Camden County Democrat who has been a steadfast opponent of Corzine's most politically dicey budget fix, the 1-cent hike in the sales tax.

In Corzine's view, the sales tax hike as well as a $169 million cut in higher education funding, a freeze in public school and municipal aid and a decision to cut court-mandated aid to 30 of the state's poorest schools, is the bitter medicine New Jersey residents must swallow now in order to restore the state's long-term fiscal health.

But that philosophy frightens some lawmakers worried about their short-term political survival. The hike, with a combination of other cuts, leaves lawmakers with much to defend on the campaign trail, but little to proudly tout in the 2007 legislative elections.

"It's the kind of strategic planning you find in the corporate world," said David Rebovich, a Rider University political scientist and a longtime analyst of New Jersey politics. "You don't find this in the political world."

Meanwhile, public opinion polls show the public has little enthusiasm for the plan. A June 16 poll by the Quinnipiac University found that 60 percent opposed the sales tax hike, with 34 percent approving of it.

Those numbers still send tremors of fear through the ranks of Democrats, who are still haunted by the tax revolt ignited by former Gov. Jim Florio's tax hikes enacted in 1990. That $2.8 billion package, which included also included a sales tax hike from 6 percent to 7 percent, galvanized an unusual coalition of groups, such as the gun lobby, teachers union and public employees, who were angered by other Florio policies. A year later, Democrats lost majority control over both houses of the Legislature; the sales tax was repealed the following year.

Anti-tax rally

Corzine's budget did spark an anti-tax rally in Seaside Heights on Saturday. Organized by Bogota Mayor Steve Lonegan, the event drew 100 people despite bad weather.

"The legislators in Trenton have let us down and now it's up to us to take over. That's what a democracy is," said Lonegan, director of Americans for Prosperity, which staged the rally. Lonegan, a staunch conservative who ran for governor last year, led a similar campaign to halt state borrowing.

Mike Bonacci of Cliffside Park said he attended the rally because he is fed up with high taxes.

"Enough is enough. New Jersey is getting so expensive that people have to move out. I've lived here all my life, and I don't want to go anywhere," he said.

Vince Micco, a Rutherford resident who is running for Congress in the 9th District, said the rally was meant to "counter drunken spending in Trenton."

"Working-class people are disappointed in Corzine. We're looking at our paychecks and we want to fight back," he said.

Lonegan said the rally is one of a number of his group's efforts, including an online "No Corzine Tax Hike" petition and ongoing TV and radio ad campaigns against the budget proposal.

Trenton Bureau Chief Charles Stile contributed to this article.

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