NJ Watchdog: State debt hits $52,300 per taxpayer

Dead last: NJ debt hits $52,300 per taxpayer, study shows

New Jersey ranks worst in the country for state debt, according to a new nationwide study.

Each state taxpayer would need to pay $52,300 to erase New Jersey’s existing bills – including public pensions and retiree health benefits – reports Truth in Accounting, a think tank in Chicago.

Among “sinkhole states,” New Jersey was followed by Connecticut, $48,600 debt burden per taxpayer; Illinois, $45,000; Kentucky, $32,600; and Massachusetts, $27,400.

In the past year, the debt per taxpayer in New Jersey increased by $16,300, or 45 percent, according to the non-profit group.

The findings are consistent with a New Jersey Watchdog analysis of State Treasury records that found the Garden State’s pension and health benefit deficit for public workers is nearing $200 billion.

Earlier this week, New Jersey Watchdog reported:

• New Jersey’s public pensions are underfunded by $113.1 billion. The state bears $80.5 billion of that burden. Local governments are responsible for the remaining $32.6 billion.
• State and local governments are also on the hook for $81.4 billion in unfunded health benefits for retired and active workers. The state owes $65 billion; the local share is $16.4 billion.
• The total shortfall is $194.5 billion – more than $60,000 per household. The figure is nearly six times higher than New Jersey’s total annual budget, currently $33.8 billion.

At the present pace, those unfunded liabilities will exceed $210 billion next year.

The full story is online at http://watchdog.org/238675/nj-debt-taxpayer/.

STOP BREAKING PROMISES AND BURDENING MIDDLE CLASS WITH YOUR MISTAKES, CURRIE SAYS TO CHRISTIE

(Trenton) — As Governor Chris Christie prepares his budget plan for next year, New Jersey Democratic Party Chairman John Currie is urging the scandal-plagued governor to tell the truth about the State's fiscal situation and the impact his inflated revenue projections and poor financial decisions have had on New Jersey's middle class taxpayers in his Budget Address on Tuesday.

News reports indicate that Governor Christie’s poor economic stewardship has grown the state's budget shortfall to an estimated $565 million while New Jersey's middle class families have been forced to shoulder the burden. 

“For four straight years, Chris Christie has stuck it to New Jersey’s middle class families with his failed conservative priorities and shady accounting,” said John Currie, Chairman of the New Jersey State Democratic Committee. “He's broken promises to state workers and school children alike, and he's actually refused money from the federal government. It is cowardly for him to ask women, children, and the hardest working among us to shoulder the burden for his mistakes while he continues to inflate revenue projections and ignore simple fiscal realities. To restore common sense to the state budget, Governor Christie should first cut out all of his nonsense and tell taxpayers the truth.”

What to watch out for in the governor's budget blueprint:

    •    Increased Property Tax Burdens
As NJ Spotlight reported, during the last fiscal year, Christie decided "to shift property tax rebate payments, which average $518 for senior citizens making up to $150,000 and $409 for other homeowners earning up to $75,000, from May to August… to cover a $473 million revenue shortfall."

    •    Plans to Pinch Public Worker Pensions
Governor Christie reportedly is looking to further pinch from public workers' state pension funds in order to address the "nearly $1 billion" shortfall expected under the plan he enacted. This would be consistent with the national GOP playbook which calls for dismantling worker protections.

    ▪    Cuts that Undermine Educational Opportunity
Chris Christie’s ongoing fight with educators and the state’s educational system, have undermined the ability of New Jersey’s school children to learn and achieve their full potential. In 2010, the governor made $1 billion in cuts to education in violation of the law, putting at-risk and poor students at an increased disadvantage. 

    •    Excuses For Not Funding For The Transportation Trust Fund
Borrowing for the Transportation Trust Fund (TTF) under Christie will be at record high, while pay-as-you-go financing is at all-time low. As NJSpotlight explained the cost of the bond premiums used to plug a funding hole will be paid off by taxpayers in higher-interest payments over the next 31 years.

    •    Tax Cuts for the Rich
Data demonstrates that despite the blustery GOP rhetoric, trickle down economic policies (also known as tax cuts for the rich) do not work. And, as one Budget Analyst noted, “the state’s finances can ill afford talk of a tax cut.” 

    •    Rosy Growth Scenarios
New Jersey Policy Perspectives reported that the state’s reliance on “overly optimistic revenue projections means the state continues to face a budget shortfall – one that could be as large as $1.16 billion.”

    •    Health Care Cuts
As the Star-Ledger and Politifact reported, the nearly $7.5 million for family planning services that Christie eliminated from his first budget for fiscal year 2011 would have been matched 9-to-1 by federal funds. In other words, rather than saving $45 million a year, and provide more coverage, Christie chose to deny thousands of women access to mammograms and other basic health care services. 

Property tax burden up 13 percent under Christie, AP analysis shows

If you haven't seen the following article that was published the other day now is a good time to do so. The Associated Press did an in depth analysis and has shown that the tax burden for NJ residents has increased 13 percent since Chris Christie has been in office, the key poin tof the article being: “…[New Jersey] homeowners continue to shoulder the highest property taxes in the nation, with an average assessed house value of just under $300,000. The average property tax bill for owners of homes and apartment buildings last year was $8,100, up from $7,500 in 2009”.

You can link to the article on NJ.com or read it below:

TRENTON — The net household property tax burden in New Jersey rose 13 percent during Gov. Chris Christie's first three years in office — a number that reflects both his success in reining in local government spending and his inability to restore a relief program that was gutted by his predecessor during the Great Recession, an Associated Press analysis of tax data has found.

The growth is only slightly lower than it was in the last three years of Democrat Jon Corzine's time as governor, when the net tax bill went up 15 percent.

But it reflects a different approach: Christie, a Republican, has gone further to force local governments to keep costs down — and give them help doing it. Corzine also tried to control local government costs but did much of his work on trying to control taxes by expanding a rebate program, which he then cut.

Christie's approach differs from what he said on the campaign trail in 2009 when he unseated Corzine. Then, he pledged to control costs and to restore some of the relief programs that Corzine scaled back. Now that he is seeking re-election, this time against Democrat Barbara Buono, Christie is emphasizing how his policies have controlled costs.

Buono says that as governor, she would raise the income tax on high earners to bring back a bigger rebate program. "It's about what families are seeing in the bill and what they're paying every month," said her campaign spokesman, David Turner, "Right now, they're paying more."

Kevin Roberts, a spokesman for Christie, said the governor's views in 2009 represented his vision, not necessarily what he could accomplish in four years. He also said Christie found the state budget in much worse shape than expected, requiring him to reset priorities.

If re-elected, Christie intends to keep pushing to control school and local government spending and to offer taxpayers direct relief in areas where the Democrat-controlled Legislature has not gone along. "At present, we think there is still unfinished business," he said.

COMPARING CANDIDATES
The gubernatorial campaigns have used different and simpler analyses of tax growth, each to its own advantage.

The Christie campaign has focused largely on the property tax cap without mentioning that the real cost to taxpayers has risen faster than the bills.

Buono's campaign, on the other hand, has cited calculations that incorporate only the big tax rebate and credit program, making it appear that the average bottom-line property tax liability has risen more than it has.

The AP used records from 2006 to 2012 on statewide property tax levies and all the state's property tax relief programs to calculate the average net property tax bill. The aid programs range from the narrowly focused, such as one that pays disabled veterans' property taxes, to the general, including one that knocks at least $50 off the income tax bill for anyone who pays property taxes or rent. Some of the numbers used in the calculations came from estimates for 2012 provided by the state Treasury Department rather than final numbers.

While any broad-brush way of looking at taxes has its limitations, this approach attempts to show what has actually happened to tax liabilities.

CORZINE'S IDEAS
New Jersey officials have taken some steps over the years to try to lessen the tax burden, but homeowners continue to shoulder the highest property taxes in the nation, with an average assessed house value of just under $300,000.

The average property tax bill for owners of homes and apartment buildings last year was $8,100, up from $7,500 in 2009. The net cost after the relief programs was $7,600, up from $6,800.

Property taxes fund local government and New Jersey's relatively high-performing public schools, which account for the biggest share of the bill.

An income tax was introduced in 1976 with the intent of funding schools and property tax relief programs for homeowners. Elected officials have also tinkered endlessly with those relief programs.

Corzine imposed a 4 percent cap on property tax growth, though it had several exemptions.

And during his last two years in office, as the economy was sinking fast, he scaled back property tax relief to help balance the budget.

By the time he left office, non-senior citizen, non-disabled homeowners making more than $75,000 lost their rebates. In 2008, those making $75,000 to $150,000 had received rebates averaging around $1,000. Corzine also barred households bringing in more than $250,000 from deducting property taxes from their earnings on state income-tax forms.

CHRISTIE'S SOLUTION
Enter Christie, who in his campaign to unseat Corzine focused largely on taxes and blasted the incumbent for cutting the rebates as the economy faltered and people needed the money the most.

Christie promised to slow the growth of property tax bills — and he did by capping how much they could grow and passing cost-saving laws that have helped local governments comply. He also said he would restore the slashed property tax relief, though he said he might not be able to do it right away and did not promise a specific level that the rebates would be.

When Christie took office in 2010, the economy was still on the ropes and the state revenue outlook was not good — worse than he was led to believe, he often says.

A higher income tax rate on high earners had expired and Christie refused to bring it back, despite lawmakers' efforts to do so. The federal economic stimulus money that Corzine had relied on to balance his last budget had also run out. Things were so bleak that Christie made major midyear cuts to the budget that had been adopted under Corzine.

The deductions for higher earners — worth a maximum of $897 — returned in his first budget.

He also overhauled the rebate program, replacing checks that had been sent to taxpayers with credits applied to bills. The state did not issue any of the credits in 2010 and delayed this year's. The credits have never been returned for non-seniors with incomes over $75,000.

For senior citizens earning under $150,000 and non-seniors with incomes under $75,000, the benefit has increased gradually under Christie but still remains well under the rates in 2007, when the rebate program was at its largest.

5-YEAR GROWTH
The AP's analysis found that the average net property tax obligation in 2012 was 31 percent higher than in 2007. For those cut from the program altogether, the increase has been even greater.

The Christie administration says focusing on those numbers minimize the governor's property tax relief accomplishments.

The governor signed a law capping property tax growth at 2 percent per year — and with fewer exceptions than Corzine's 4 percent cap.

To ease spending pressures on towns, he also achieved a major breakthrough when he got a Democrat-run Legislature to go along with an overhaul of pension and health insurance for one of the party's main constituencies, public-sector employees.

His administration says that action will save local governments $900 million over its first three years and will save increasing amounts each year.

The governor did agree last year to plan for an income tax reduction based on the amount of residents' property taxes, a variation on the rebate and credit programs. But the Legislature balked, saying the state couldn't afford it. Christie, meanwhile, has rejected Democrats' calls to increase income taxes on high-wage earners to pay for property tax relief for people who make less.

Christie is continuing to push for a version of the tax cut and for more controls on local spending, including not letting government employees get paid for unused sick time when they leave and offering incentives for communities to share more services.

David Rousseau, a state treasurer under Corzine who now works at the liberal New Jersey Policy Perspective, said he believes Christie has focused on controlling government spending not because it's inherently better but because tight budgets haven't given him enough money to do more with direct relief programs.

But Charles Steindel, the chief economist at the state's Treasury Department, said Christie has also made a philosophical choice that could potentially lower taxes for years to come. "If you want to address the problem, it's better to deal with the ultimate driver, which is the cost side," he said.

Let's See How The Former Offensive Tackle Is Performing In Congress...

The Adler campaign for Congress (NJ-03) has releases a new TV spot that highlights Congressman Runyan’s votes in Washington that would dismantle Medicare. 

I like it, it's both humorous and effective; watch it below. 



Dismantling Medicare and replacing it with a voucher program has been the cornerstone of Congressman Runyan’s agenda, forcing future beneficiaries to pay an additional $6,400 annually shifts the burden to middle-class Americans to pay for tax breaks for millionaires, Big Oil, and companies that ship jobs overseas.

Shelley Adler believes that public service should be about helping people, not hurting them.

Romney Economics: Broken Promises: Romney's Massachusetts Record

Mitt Romney talks a lot about his time as a corporate buyout specialist, but you know what we don't hear very much about?

His experience as governor of Massachusetts.

That may be because he made promises to the people of his state during his '02 campaign that sound an awful lot like the ones he's making to the country today -- and he failed to deliver on them.

Just like now, he claimed his success in the private sector meant he'd be able to create jobs, cut taxes, and bring down the debt. He did the opposite.

Even as the rest of the country was enjoying a brightening economy, during Romney's term Massachusetts plummeted to 47th out of 50 states in job creation; manufacturing jobs declined at twice the national average; and for the first time since 1995, its unemployment rate was above the national average.

Long-term debt ballooned by more than $2.6 billion -- leaving the people of Massachusetts with the highest per capita debt of any state in the nation. State spending increased every single year, and Romney raised taxes and fees by $750 million per year -- leading to a higher state and local tax burden of $1,200 for every Bay Stater. Over his term, fees at public colleges skyrocketed by 63 percent, and during his first year, K-12 schools saw the second-largest percentage cuts, per student, in the nation.

All that in just four years.

Mitt Romney promised more jobs, less debt, and smaller government for Massachusetts based solely on his experience as a corporate buyout specialist. Turns out that being good at maximizing profits for yourself and your investors, but leaving companies bankrupt and workers without jobs, doesn't exactly prepare you to lead a state

AS a Matter Of Fact...Busting the myth: The real numbers show N.J. is not the most overtaxed state in the nation

By Mary E. Forsberg and Deborah Howlett
June 26th, 2011

Perhaps you’ve heard a politician or two, in an accusatory tone, declare New Jersey has the highest taxes in the nation. It’s become a rallying cry for the current administration. It is repeated as an indisputable fact by the media. But mostly it just sounds right to people, perhaps because it so neatly fits the cynical narrative of government waste, fraud and abuse.
The thing is, it’s not true.

Consider this from a recent press release by the Connecticut House Republican Party:
“Connecticut residents already pay the highest taxes in America.”

Or this from the Buffalo News editorial page: “New York is the most overtaxed state in the nation.”

Nope. According to the Orange County chapter of the Lambda Alpha economics society, “California is the most overtaxed state in the nation,”

And from a conservative pundit in Chicago: “I live in Illinois … the most overtaxed state in the union.”

But wait. There’s another. The vice chair of the Maine Republican Party has said, “Maine is currently the most overtaxed state in America.”

They can’t all be right.

For the record, New Jersey ranks eighth among all states when state and local tax revenues are compared as a percentage of taxpayer’s personal income, according to an analysis using data from the U.S. Census and the U.S. Department of Commerce, Bureau of Economic Analysis. It’s the cleanest comparison of the tax “burden” in all 50 states. New Jersey’s ranking drops considerably once you get past property taxes and look only at state tax collections.

Simply comparing total revenue collected from taxes in each state would produce a wholly inaccurate comparison because poorer, less-populated states would always appear to tax less. Measuring as a percentage of personal income, or on a per capita basis, provides necessary
context and a more accurate comparison among states.

Consider the big three state revenue sources in New Jersey — income, corporate and sales taxes — and then size up property taxes.

Income tax

On a per capita basis, New Jersey ranks seventh among states for income tax revenues, according to U.S. Census data. As a percentage of personal income, New Jersey ranks 19th among states.

It’s important to understand New Jersey is consistently at the top of lists that rank states in terms of median income and millionaires (those with at least $1 million in investable or liquid assets) as a percentage of households.

With all that wealth, the state also has a progressive income tax that collects significant amounts of its revenue from the wealthiest in the state and virtually none from the poorest, such as married couples whose incomes are less than $20,000 ($10,000 for a single person).
The progressive aspect of New Jersey’s income tax has evolved since the state’s first 2 percent flat tax was enacted in 1976. Public opinion polls show a vast majority approve of raising rates levied on income that exceeds $1 million a year.

Other states also have local income taxes. Philadelphia, for example, levies a 3.928 percent wage tax on residents and a 3.4985 percent wage tax on nonresidents on top of the state’s 3.07 percent flat income tax. Cities in New Jersey are barred from imposing income taxes on workers.

Corporate Tax

Corporate taxes in New Jersey rank ninth as a percentage of personal income and sixth when measured per capita.

New Jersey took in a little more than $2 billion in fiscal year 2010 from corporations, or 7.5 percent of all revenue collected by the state. However, 93 percent of the 252,000 corporations subject to New Jersey’s corporate business tax paid the state less than $2,000 each. Corporate revenues for the year surpassed $24.6 billion.

Sales Tax

Comparing revenue from the sales tax puts New Jersey 19th on a per capita basis and 36th when measured as a percent of personal income.

The state sales tax is often cited as one of the highest in the nation because of its 7 percent rate. However, it is applied more narrowly than sales taxes are in many other states.

Food, clothing and gas are exempt, for example. Depending how one looks at it, that is a loss to the state or a savings to taxpayers of about $2.6 billion.

Nor does New Jersey allow cities or counties to collect local sales taxes, which many other states allow.

Montgomery, Ala., levies a 10 percent sales tax (4 percent state; 6 percent local) on everything sold, including food.

In Georgia, a 12 percent combined state and local sales tax is the norm in some areas of the state.

Property Taxes

What’s abundantly clear, however you slice the data, is that New Jersey ranks among the top one or two states in the nation when it comes to property taxes, which are the only real source of revenue for local government in the Garden State. Last year, property taxes produced $25 billion in revenues, exceeding revenue from the state’s three major taxes.
* * *
In total, as a percentage of personal income, taxes in New Jersey rank about eighth among all the states. Considering it ranks near the top for median income and wealth, that designation hardly seems out of line.

But those are not the numbers pushed by anti-tax zealots. Groups such as the conservative Tax Foundation have cited New Jersey as having the highest tax burden in the nation, using a convoluted formula that doesn’t quite parse the intricacies of local tax laws.

For example, the Tax Foundation charges back to New Jersey the $2.6 billion in income taxes paid to New York by New Jersey residents who work in New York and must abide by New York tax laws, over which New Jersey has no control.

By the way, that $2.6 billion is not just a blip in the data. It is more than New Jersey collects from its corporation business tax, the state’s third-largest revenue source, and it is one of the largest income transfers from one state to another in the country.

All of this just points to the need to be careful when citing state rankings.
Some, such as the Tax Foundation’s, only obscure real facts because they allow politicians to cherry-pick data and use them to justify their political philosophy.

So the next time you hear someone say New Jersey is the most overtaxed state in the nation, look past the rhetoric and consider the real numbers behind the statement.

Check out the tax data tables here.