N.J. Gov. Corzine Signs $29B 'Recession Budget'

Jun 29, 2009 11:00 pm US/Eastern
N.J. Gov. Corzine Signs $29B 'Recession Budget'
TRENTON, N.J. (AP) ―


Taxes on New Jersey's top earners, smokers and wine and liquor drinkers will go up this week under the state budget Gov. Jon S. Corzine signed Monday.

Some homeowners also will not get their usual property tax rebates this fall, and state workers will have to take 10 unpaid days off under the new tax and spending plan.

The Democratic governor, who is up for re-election in November, had to slash spending because of a sharp decline in state tax revenue.

The budget, adopted last week by both houses of the state Legislature along party lines, calls for the state to spend $29 billion. That's $4 billion less than the budget Corzine signed a year ago.

"I'm the only governor of New Jersey since at least 1947 to cut the size of government," Corzine declared at a ceremony outside the State House on Monday.

The tax increases and other budget provisions take effect Wednesday.

Republicans have criticized Corzine for raising some taxes, refusing to lay off state workers and accepting $2 billion in federal stimulus money to help balance the budget.

They say Corzine's cuts are not deep enough for the state to avoid future budget problems.

"The tough decisions this budget passes on to hardworking New Jerseyans is a stark reminder our governor is unable to manage state finances or keep control of state priorities," Republican gubernatorial candidate Chris Christie said in a statement.

Corzine had proposed deeper cuts even after he introduced his budget in March. At one point, he called for canceling all property tax rebates this year.

But the state brought in $725 million in a tax amnesty program -- enough to save rebates for homeowners earning under $75,000, along with senior citizens and disabled voters.

Corzine said Monday that if more money comes in through tax amnesty or higher-than-expected income tax collections it will go toward further tax relief.

High-income taxpayers will see their taxes rise to 10.25 percent up .75 percent -- on all income above $400,000. That means the tax bill for someone earning $500,000 would rise by $750.

Taxes on cigarettes will go up 12.5 cents, making the total state tax $2.70 per pack.

Taxes also will go up on wine and hard liquor -- but not beer -- by 25 percent. That will raise the cost of an average bottle of wine by around 3.5 cents.

Lottery winnings over $10,000 will also be taxed. There had been no income tax on lottery winnings in New Jersey.

One of the few areas in line for more money is spending in the state's public-school classrooms.

It was no surprise that lawmakers adopted the budget last week and Corzine signed it before the July 1 deadline. Still, the signing avoids any possibility of a government shutdown, like the weeklong one three years ago.