The New York Times

Hearings Open On Taxing Rich To Raise Property-Tax Rebate

The New York Times — Tuesday, June 15, 2004

By LAURA MANSNERUS

TRENTON, June 14 — The Legislature opened hearings Monday on Gov. James E. McGreevey's proposal to raise the tax rate on New Jersey's wealthiest residents, in the first income-tax increase in this tax-averse state in 14 years.

The added tax, known as the millionaire's tax even though it would kick in at $500,000 in household income, would be entirely dedicated to property tax relief - a proviso that has won it the backing of consumer advocates and retired taxpayers.

"Property taxes in New Jersey increased 52 percent over the last 10 years," Marilyn Askin, the president of the New Jersey chapter of the AARP, told two legislative committees. "People on fixed incomes cannot afford this situation to continue."

Ms. Askin was among representatives of more than a dozen groups that addressed the General Assembly Appropriations Committee and the Senate Budget Committee. The panels also heard complaints about the measure, although many came from tenant groups that did not oppose the millionaire's tax but said the plan did not increase property tax rebates for renters. Several committee members said they would consider amending the bill to raise the rebates for renters.

Both committees are scheduled to take up the bill again on Thursday. Votes are expected to follow party lines, and Mr. McGreevey's party, the Democrats, control both houses.

"It is wildly popular with voters," Staci Berger, the program director of New Jersey Citizen Action, a nonprofit advocacy group, said of the plan. Ms. Berger said many people gave checks to the group in its nightly door-to-door canvassing. Ms. Berger said Citizen Action members had made 500 calls to legislative offices just on Monday and had collected thousands of postcards. In a similar campaign, Ms. Askin said, the AARP routed more than 500 callers to their legislators in nine days.

The plan would raise the income tax rate in the highest tax bracket to 8.97 percent from 6.37. The increase would raise about $800 million, to be distributed in annual property tax rebate checks. The maximum rebate would increase to $1,200 from $775 for elderly, disabled and low-income people, and to $800 from $250 for other middle-income homeowners.

Some business groups told the committees that a tax increase would discourage entrepreneurs, and an economist, David Shulman, called it "a powerful message to corporate decision-makers: stay away."

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