As required by the NJ Constitution, Governor Jon Corzine delivered his new budget (Fiscal Year 2009) to a Joint Session of the New Jersey Legislature the last week in February and the next few months promise to be battle filled. In his budget message, Governor Corzine outlined his spending priorities for the upcoming year calling for cuts in state spending by $500 million. The Governor’s proposed budget contains no new taxes or fees.The good news is that there was no mention of increasing the Home Sales Tax, AKA the NJ Realty Transfer Fee. That is a tax on NJ residents selling their homes and is shared by the State and county. The $500 million reduction the Governor mentioned will be achieved by cutting 5,000 state jobs through employee layoffs and buyouts. He’s also asked for the elimination of the Commerce Commission, as well as the Departments of Agriculture and Personnel. The plan reduces state aid to hospitals, municipalities, and colleges and universities as well. It’s a sobering message, but as NJ Realtors we know that until the state is fiscally sound, growth will be inhibited. The budget cuts promise to provide some heated debate when the Appropriations Committee begins its review. State employees, municipalities, hospitals, universities and farmers all have a strong voice in Trenton and during the next few months they will make their voices heard.Governor Corzine also acknowledged New Jersey’s property tax crisis in his budget address. However, there was no mention of real property tax reform.Under his FY 2009 spending proposal, 70 percent of the state’s homeowners will receive exactly the same $1,000-plus rebate they received last year. However, households earning between $100,000 and $150,000 would see their rebates decrease and those over $150,000 annually would not be eligible.There are some increases in spending too. Governor Corzine wants the legislature spend more on educational aid and he’s called for a new school funding formula.
The FY 2009 budget now will be considered by the Legislature’s Joint Appropriations Committee, and the battle of Trenton begins. There is an end in site however, NJ’s budget must be adopted by July 1.
