Anger Grows Over NJ Tax Hikes

TRENTON, NJ – April 2, 2002 — He swore not to raise taxes, sort of.

Gov. James E. McGreevey's public promise was to not increase the sales or income taxes. That left open tax increases on cigarettes, businesses, casinos and for people who live in New Jersey and work in Pennsylvania.

The governor also wants to raise what it will cost to register a car, get a boat license or do business.

All of that has angered the politicians who are being asked to pass these new laws and the people who will pay the new taxes.

"It's always one step," said Gloria Brown of Trenton. "This is just the beginning of more taxes."

In the $23.7 billion budget McGreevey proposed last week, the governor asked for more than $1 billion in new tax money.

The biggest slice comes from the $1.9 billion in taxes on corporations, a 66 percent increase.

Another $200 million more would come from a 50 cent increase on the tax for a pack of cigarettes.

Opponents claim the McGreevey budget has dozens of other hidden costs for state residents. Fees to register a boat will likely go up, giving the state $2.5 million more a year in revenues.

McGreevey has proposed increasing the costs for insurance companies and other businesses who buy records from the Division of Motor Vehicles.

Health insurance companies would see an increase in certain fees.

Corporations that counted on a scheduled tax cut left over from the Whitman administration will lose that as McGreevey plans to rewrite tax laws to generate more money from corporations.

"The corporations, they're number one," said Trenton resident Andrew Paul, 86, who argued that businesses should pay more.

But lawmakers who must pass the changes pushed by McGreevey say no.

"He thinks we're all rubes here in the state of New Jersey. We know what taxes are," said Sen. Diane Allen, R-Burlington. "He promised he wasn't going to raise taxes and he's raising every tax he can find."

Other new taxes include charges for free hotel rooms, meals and shows in Atlantic City Casinos.

Residents who commute to Pennsylvania would pay more taxes under a plan to eliminate an arrangement that allows them to pay taxes only in New Jersey.

McGreevey defends all the increases with the same argument.

"It's a matter of fairness," McGreevey said Tuesday in an interview with The Associated Press.

Corporate tax laws allowed big business to pay as little as $200 a year in taxes, McGreevey said.

The interstate agreement let tax money flow out of New Jersey and the casinos must pay taxes on rooms they charge patrons, so why not on those given out as a business incentive, the governor said.

"At the end of the day citizens will pay taxes. But what is fundamentally wrong is if your neighbor is not paying taxes while you are," McGreevey said.

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Author: 6 ABC-AP