NJ to Cut Government, Raise SomeTaxes

New Jersey residents can expect higher prices for cigarettes, car registrations and casino perks and businesses will pay more in taxes, fines and fees under a $23.6 billion budget proposed by Gov. James E. McGreevey on last week.

After months of blaming a projected $6 billion deficit on faulty revenue estimates, McGreevey said state revenues would grow modestly under his plan, though he kept short on specifics.

"We're doing it without raising sales taxes and without raising income taxes. We're doing it without reducing our state aid to local governments and school districts. And we're doing it by keeping faith with our most basic priorities and fundamental values that brought us here in the first place," McGreevey told a joint session of the Legislature.

Lawmakers must pass the budget before July 1, the start of the 2002-2003 fiscal year.

The budget will grow by 1.5 percent over current spending and keep popular tax rebates in place while increasing money for state troopers, security measures, cancer research and reading programs.

Most of the money will come from businesses. The biggest budget increase is a $1.9 billion jump in the corporate business tax, a 66 percent increase.

McGreevey promised to close loopholes in the tax structure that allowed some of the state's biggest employers to pay only $200 in state taxes a year.

State government itself was cut. McGreevey proposed increasing money only for the Department of Education, Health and Human Services, Labor and Transportation.

The state will also save $76 million from early retirements, salary freezes for managers and cabinet employees, he said. That means another 1,000 cuts to the state payroll through early retirement, attrition or "if necessary, layoffs," McGreevey said. In January, McGreevey ordered 1,200 layoffs.

"State government has to do more with less," McGreevey said.

Tobacco money also helps balance the budget. New taxes on cigarettes will collect an estimated $200 million and the state will borrow $1.1 billion from the national settlement with cigarette manufacturers.

Another $33 million will come from a new tax on complementary rooms and meals offered by casinos and hotels. And fees from motor vehicle services will increase by $76 million.

The governor also announced he had signed an executive order combining the three autonomous authorities that run the New Jersey Turnpike, Garden State Parkway and the Atlantic City Expressway.

"It's time to do away with these redundant authorities which behave like shadow governments," McGreevey said.

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Author: 6-ABC