The Star-Ledger

Coalition Advocates Further Tax Raises

The Star-Ledger — Thursday, March 30, 2006

BY JOE DONOHUE
Star-Ledger Staff

Gov. Jon Corzine is drawing fire for proposing $1.5 billion in tax increases for the cash-strapped state budget, but a coalition of citizens groups and union yesterday said he isn't going far enough.

The Fairness Alliance yesterday called for nearly $800 million in higher taxes to restore cuts in higher education and other areas targeted by Corzine.

The groups, which include the New Jersey Education Association and the Communications Workers of America, two powerful unions, urged a $462 million income tax increase for more than 100,000 taxpayers who earn $200,000 to $500,000, and more than $300 million in extra business taxes and suspended tax breaks.

"This change would ... add a further measure of equity to New Jersey's overall tax structure and call upon those among the most able to pay to contribute more of their fair share," said Jon Shure, president of New Jersey Policy Perspective, a liberal think tank and alliance leader.

The groups did not specify how the extra taxes should be spent. Shure said restoring some of Cor zine's proposed $169 million cut for higher education would be a start, along with more property tax relief. He said it "strains the notion of fairness" to continue tax breaks for businesses "at a time of crisis when college students, Medicaid enrollees, property taxpayers and others are called on to sacrifice."

Two years ago, the alliance persuaded the Legislature to boost the income tax rate on taxpayers who earn more than $500,000, a move that netted $800 million. It now would impose the same 8.97 percent rate on all taxpayers who earn more than $200,000 – up from a top rate of 6.37 percent.

But Corzine's pending $30.9 billion budget already is meeting resistance in the Legislature because of its tax increases, which include boosting the sales tax from 6 to 7 percent. A spokesman for the governor and lawmakers of both par ties voiced little enthusiasm for more tax increases.

"After proposing $2 billion in budget cuts, the governor concluded that the sales tax, not the income tax, should be the primary tool for generating new revenue," said Anthony Coley, the governor's spokesman. He added that the governor shied away from major business tax increases to try to stimulate the economy.

Assemblyman Louis Greenwald (D-Camden), the Assembly Budget Committee chairman, said, "We'll entertain anybody's recommendations, but before we look to raise taxes, these groups ought to look how we can save money." Assemblyman Kevin O'Toole (R-Essex), another committee member, called the alliance plan "a terrible idea. The problem is we tax too much and we spend too much."

The alliance generally gave Cor zine good grades for his first budget. "The Corzine budget makes a good start toward putting New Jersey on a firm financial footing – important if the state is to have a government that meets the needs of its citizens and invests in the future," said Ev Liebman, a representative of New Jersey Citizen Action, an alliance member.

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