tate Treasury will receive more than $1.7 billion of revenue in the next year without tax increases.
WASHINGTON – Tax hikes in New Jersey are not necessary, given the revenue already predicted for the Garden State, according to Americans for Tax Reform (ATR), a taxpayer advocacy organization that released a statement vehemently opposing Gov. Jim McGreevey\’s (D) proposal to raise taxes by $700 m.
According to a recent ATR analysis McGreevey has proposed $700 million in new taxes for fiscal year 2004 in addition to the $2.43 billion tax increase enacted in fiscal year 2003. As such, if the proposed tax increases becomes law, taxpayers will be paying $3.13 billion in higher taxes in FY \’04 than before McGreevey came to office, which is greater than 1 percent of the state\’s economy. Furthermore, the two years combined will lead to taxpayers being forced to pay a total of $5.5 billion in new taxes since McGreevey was elected governor.
"How can McGreevey justify raising taxes when state revenues are increasing by more than 10 percent and another $1.7 billion of revenues are coming into the Treasury?" asked Grover Norquist, President of ATR in Washington. "The answer, of course, is the governor capitulating to the special interest government spending lobbies who helped get him elected."
The FY 2004 budget includes $561 million of federal aid, an additional $630 million of unanticipated revenues, and more than $600 million of new revenue stemming from federal tax cuts. This improved budget situation stems from three developments. First, state planners underestimated corporation business tax revenues by more than $700 million and cigarette taxes by $73 million. Second, due to new federal legislation, New Jersey will receive an additional $561 million of state aid with half designed to help close deficits. Finally, the state will see an additional $600 million of new revenue from increased economic activity resulting from President Bush\’s tax cut, most notably from the capital gains reduction. The last such tax cut saw New Jersey experience its greatest three year revenue collections from income taxes.
"Governments are greedy things," continued Norquist. "State governments went begging and pleading to the Feds for relief on their budgets, and as soon as they get the cash they turn around and spend it on permanent programs. Garden State taxpayers should make sure Gov. McGreevey doesn\’t make new commitments with their money once he and the spenders get their windfall," he concluded.