Monday, June 25, 2012
A RESPONSIBLE BUDGET THAT PLANS FOR A TAX CUT, BUT WITHHOLDS IMPLEMENTATION
Trenton – Senator Paul Sarlo, chairman of the Senate Budget and Appropriations Committee, issued the following statement on Monday after the Senate approved (24 – 16) the state budget for Fiscal Year 2013:
“This is a smart, responsible budget that reflects economic reality. This is a balanced budget that stays within our means. It addresses our needs and our priorities, but it does not spend what we do not have.
“It’s not an ideal budget – but economic conditions are far from ideal. I wish we were able to address more priorities, but this is the best budget under the hard economic conditions that continue to impose difficult challenges on the state and on the lives of working people in New Jersey
“Our budget spends $62 million less than the governor’s proposal and sets aside $183 million more in the surplus.
“It plans for a tax cut but it doesn’t commit to it. This is a responsible budget that is guided by economic reality – not by political ambition. It sets aside the first year costs of $183 million to support the Democratic plan to provide middle class property tax relief, but it withholds implementation until we have confidence the money is there. We want property tax relief but we will be responsible and patient in implementing it.
“We aren’t denying the governor a tax cut. But it’s like with a kid. We’re putting the cookies on the table and saying ‘Be good and you can have them later.’
“Nothing will be lost to the taxpayers by being patient. The plan isn’t scheduled to take effect until next January so we should use the six months to gauge the economy and state revenues. This schedule may not satisfy the Governor’s political timeline, but it is the responsible thing to do for New Jersey. We convinced the Governor that we are right with our tax relief plan that targets middle class property taxes and he is wrong in wanting income tax cuts for the wealthy. He should come to accept that we are also right by being responsible and patient in implementing the plan.
“I do possess a serious concern about this budget. It is based on the Governor’s revenue estimates that appear to be overly optimistic. He will certify revenue growth of 7.2 percent, one of the highest rates in the country. Most economists and fiscal experts believe his figure is not realistic. Most states are predicting growth closer to 3 percent. The total for all states is 4.1 percent, according to the National Governors Association.
“New Jersey ranks 47th in the country in economic growth. Our GDP decreased by 0.5 percent while it grew by 1.5 percent for all states combined. Only Alabama, Mississippi and Wyoming are worse. That’s not an economic comeback, it’s an economic setback.
“The state’s unemployment rate is the fifth highest in the country, a full point above the nationwide rate and higher than all our neighboring states, we have the second highest mortgage foreclosure rate and the state’s poverty rate is the highest it has ever been.
“And, property taxes have increased by 20 percent over the past two years as a direct result of the governor’s actions. This is a middle class burden Democrats want to address with our plan for tax relief.
“Many members of the Legislature would rather use lower, more conservative revenue projections for the budget. But the Governor is the only one with the legal authority - the constitutional authority - to certify revenue projections. I hope the Governor’s revenue projections come through. I hope the national economic recovery grows strong and New Jersey’s economy performs even better. But the responsible thing to do with the tax cut is to be patient.
“While our resources are limited, this plan adds a number of priority needs. It includes a tax savings we can afford now: the Earned Income Tax Credit. Actually, we are reinstating the reductions the Governor made when he cut the credit from 25 percent to 20 percent, resulting in an effective tax increase for the working poor. If anyone needs and deserves tax cuts it is the working poor.
“Another important addition to the budget is more support for nursing homes. We have a moral responsibility to provide more support for nursing homes. Also, we are rejecting the full increase in court fees the governor included in his plan and restoring cuts he made to legal services. We should not allow financial obstacles to hinder access to the legal system for the poor. Justice may be blind, but it shouldn’t be broke. And, we are adding investments in child care and cancer screening.
“This is a budget that represents the unified priorities of Democrats, that addresses the important needs of the people of New Jersey and that reflects the difficult economic conditions that confront us all. It is a budget that is consistent with the Governor’s priorities. Most importantly, this is a budget that is responsible, that makes the smartest use of our resources, that recognizes economic reality and that maintains stability in the state’s fiscal condition and prepares New Jersey for the future.”