When both houses of the New Jersey Legislature passed the new $29.4 billion state budget June 28 — which Governor Christie signed the next day — I was not one of those to vote in favor of it. It is not that I disagree with the budget principles of lower spending and lower taxes, but because I strongly disagree with the budget’s priorities.
Taxes in New Jersey are too high, which is why I supported our new two percent property tax cap legislation. The real challenge in New Jersey, however, is to change a 19th Century-based tax system, in which we fund local government services and public education almost exclusively through property taxes, in favor of a more equitable method.
Governor Christie’s budget cuts job-creating incentives for biotech and high-tech businesses that are New Jersey’s economic future. His budget raises taxes on hospitals and surgery facilities where New Jerseyans receive the healthcare they need. Over $1 billion to schools and municipalities is cut, effectively forcing local governments to raise property taxes, drastically cut services, or both.
And it’s all connected.
CNBC recently ranked New Jersey 22 of the 50 states in terms of business competitiveness. Of ten categories used to develop the rankings, New Jersey ranked second for education and fourth for access to capital, vital components of why companies choose to locate in the Garden State. Business growth depends upon a well educated workforce and companies looking to attract top talent know that strong schools are necessary components for their future development.
Unfortunately, the Governor’s budget priorities do not reflect the need to invest in these strengths. Instead, his spending plan provides an average $40,000 tax cut for those earning over $1 million per year while those earning minimum wage will pay $300 more in taxes and fees.
Over the past 30 years, policies that reward the affluent at the expense of the middle-class have created an unprecedented wealth gap in the United States. During this time, the top one-tenth of one percent of Americans saw their income increase 300 percent while the median wages of most Americans increased just 15 percent. Governor Christie appears to believe these policies are good for New Jersey and will help our economy grow; I strongly disagree.
The Governor’s budget eliminates funding for school breakfast programs and reduces support for school lunches. For some New Jersey children, this is the only nutritious meal they may receive all day.
Governor Christie’s budget reduces funding for our colleges and universities by nearly $200 million. This continues to place New Jersey in the dubious position of being 50th among the states in terms of our support for public higher education.
The Governor’s budget cuts adult medical day care for our most elderly residents, cuts funding for the disabled and significantly raises train and bus fares for commuters.
The Governor’s budget eliminates property tax rebates for everyone, including our senior citizens living on fixed incomes.
This fall, many parents will be forced to pay out-of-pocket for their children to play high school sports.
The Governor can and should talk of property tax cuts and budget caps – but until he address the fundamental problem of our over-reliance on property taxes – our core funding and taxing challenges will remain unchanged for all New Jerseyans.
The time to re-engineer how we fund the priorities that are fundamental to our state has arrived.
Currently, we rely on an outdated system of property taxation to fund what have arguably become the nation’s best public schools. We depend upon an outmoded income and sales tax system disconnected from job-producing paradigms and our clear successes in the bio-tech, pharmaceutical and green technology sectors.
New Jersey has great potential to offer all its residents real opportunity for success. We are strategically located between the first and the fifth largest cities in the nation. We have excellent transportation arteries, some of the best public schools America has to offer, great access to capital for business, and are widely known for our technology infrastructure.
These built-in advantages are what have made New Jersey successful.
Governor Christie can develop painful budgets that cut the very services needed for our economic transformation, pass property tax caps and propose all the “tool kits” imaginable, but until we develop innovative ways to invest in our people without continuing to tax them out of their homes, we are simply placing band aids on our core challenges that future governors and legislatures will continue to be compelled to address.
Assemblyman Gary S. Schaer (D-Passaic) represents parts of Bergen, Passaic and Essex Counties in the NJ General Assembly and serves as Chairman of the Assembly Financial Institutions and Insurance Committee and Vice Chairman of the Budget Committee.