Governor threatens using regulations to keep Casinos from running ads against tax hike.

WASHINGTON – Picture it: A politician extorts a certain industry for a sum of cash. The industry decides to run a campaign to get public opinion on their side. The politician then moves to make that campaign illegal. Sound like a tinpot dictator in a banana republic?

It is actually New Jersey in 2003. For the second straight year, Gov. Jim McGreevey (D) has proposed raising taxes on the state\’s most taxed industry and largest private sector employer – Atlantic City casinos. But critics, including Americans for Tax Reform (ATR), the nation\’s leading taxpayer advocacy organization, say there is no justification for raising taxes on any product, service, or industry, given that the state is expected to receive at least $1.7 billion next year in new revenue from a federal "bailout" without raising taxes.

Meanwhile, this year\’s debate comes with a new twist. Gov. McGreevey and his key allies are seeking to use the regulatory process from barring ads in opposition to the proposed tax increases. And this is leaving New Jersey taxpayers feeling like they live in Nicaragua instead of East Brunswick.

"First, people compared Jim McGreevey to Jim Florio, the Garden State\’s last tax-hiking governor," said taxpayer advocate Grover Norquist, who heads ATR in Washington. "Now Jim McGreevey is becoming the Daniel Ortega of America\’s governors."

A recent analysis by ATR found that New Jersey\’s government will receive more than $1.7 billion of new tax revenue in fiscal year 2004 without raising taxes. The increase comes from $561 million of federal aid (part of President Bush\’s tax cut), $630 million of revenue that was underestimated in the fiscal year 2003 budget, and $600 million of new revenue stemming from improved economic growth. Moreover, with the new Borgota hotel, Atlantic City will be generating $350 billion of new revenue for the state without raising taxes. Yet, McGreevey continues to push for $700 million in new taxes.

"You can only tax something so much until it goes away," continued Norquist. "This is like selling the rope he\’ll hang New Jersey\’s economy out to dry on."

Casinos pay 80 percent of the property taxes in Atlantic City, 30 percent of the County budget, and contributed $1 billion for the redevelopment of Atlantic City, more than $4 billion to aid senior citizens and the disabled, and pay the cost of for the state to regulate them.