Key to N.J. budget may lie in debates
Analysts fear tax-collection estimates could be too high.
TRENTON - Debates this week could determine whether recuperating Gov. Corzine will be forced to redo his budget proposal.
Nearly half of Corzine's $33 billion budget plan is devoted to property-tax relief, and it calls for no tax increases and focuses heavily on helping homeowners handle America's highest property taxes. It could become the first state budget since 2001 not to increase state taxes.
But legislative budget analysts worry that the plan relies on overly optimistic tax-collection estimates. They have predicted the state will collect $625 million less in taxes than Corzine has projected.
If that proves correct, Corzine will have to rework his plan to fill the gap.
The Assembly budget panel is set to meet tomorrow and the Senate budget panel Wednesday to review updated tax-collection estimates.
The update is seen as vital since it follows April's income tax filing deadline.
Treasury Department spokesman Tom Vincz said the department hadn't finished its latest revenue estimates.
"While this snapshot is somewhat earlier as compared to previous years, and will change again as we close out the fiscal year, we'll report some mixed results and no major surprises from the pivotal spring collection period," Vincz said.
Treasurer Bradley Abelow has said the April tax returns should clarify the picture, although he told lawmakers in March he was already aware caution was needed.
"We must be mindful that any additional spending or dedication of revenues should be accompanied by an offsetting reduction in spending or increase in real, recurring revenues," he said. "When we come back in May, we will accept the responsibility to make changes to ensure that we remain in balance."
Republicans contend that could mean a tax increase.
"There is an obvious question posed by these numbers," Assemblyman Frank Blee (R., Atlantic) said when the legislative estimates were released. "If the state ends up short of cash in June, who will be expected to pay more to make up for that gap? Unfortunately, in one way or another, it will most likely be our state's taxpayers."
Corzine is working from the governor's mansion in Princeton as he recovers from an April 12 automobile accident in which he broke his leg, 11 ribs, collarbone and sternum. He resumed work last Monday, and said completing the budget was his first priority.
He acknowledged complaints that the spending proposal leaves many key needs unmet, including school and state college construction; antipoverty, health care and hospital needs; and open-space preservation.
"We're getting slammed pretty hard on some of those areas where we're not spending money," Corzine said. "But that is so that we can fit the property-tax-relief initiative inside the kinds of spending that we need."
The budget includes $2.3 billion for a recently approved plan to send tax-rebate checks averaging $1,051 to most homeowners.
The state constitution requires adoption of the budget by July 1. Last year's budget wasn't adopted until July 8 amid a showdown between Corzine and fellow Democrats in the Legislature over the governor's proposed sales-tax increase, which was enacted after it was agreed that half the money raised from it would go to property-tax relief.
Corzine said he didn't want to see a repeat of that fight, which closed much of state government and Atlantic City casinos for a week.
"We want to get that budget done early so there are no chances of delay, hopefully in the first 10 days of June," Corzine said.