Corzine signs 'recession' budget

June 29, 2009 4:19:50 PM PDT
New Jersey Gov. Jon S. Corzine has signed a new $29 billion budget into law. The spending plan that takes effect Wednesday raises $1.3 billion in new taxes on businesses and residents. It eliminates property tax rebates for the those under 65 who make more than $75,000 annually.

The budget increases so-called sin taxes on liquor, wine and lottery winnings over $10,000. It raises income taxes for one year on the wealthiest and extends a 4 percent surcharge on corporate business taxes that was set to expire.

The budget relies on $2.2 billion in federal stimulus money.

Democrats say the budget is responsible and prudent in harsh economic times. Republicans say it relies too heavily on federal stimulus money and other one-time revenues.

Here are budget highlights:

INCOME TAXES

-Raises income taxes for one year by .75 percent on family income over $400,000, moving that top tax rate to 10.25 percent.

-Eliminates, for one year, property tax deduction on next year's state income tax for all taxpayers who earn more than $250,000, and caps deductions at $5,000 for those who earn $250,000 or less.

PROPERTY TAXES

-Eliminates property tax rebates for non-senior citizen, non-disabled homeowners with incomes over $75,000.

-Provides two-thirds of last year's rebate amount to homeowners who earn between $50,000 and $75,000. Those rebates are to average about $700.

- Provides last year's rebate amount to all senior citizens, disabled people and to others who earn under $50,000. For senior citizens, the rebates would average about $1,200; for non-seniors with incomes under $50,000, they would average $900.

-Eliminates property tax rebates for renters.

-Maintains property tax freeze program for senior citizens - worth an average of more than $1,000 per household.

SIN TAXES

-Raises tax rates on wine and liquor - but not beer - by 25 percent.

-Increases taxes on cigarettes to $2.70 per pack - up 12.5 cents from the current tax.

-Taxes lottery winnings over $10,000.

STATE EMPLOYEES PAY AND JOB SECURITY

-Freezes salaries for state employees, delaying a 3.5 percent raise that was scheduled to go into effect this year until 2011.

-Requires 10 unpaid furlough days for workers, but gives them get seven paid days off they can use starting in 2011.

-Avoids layoffs for union-represented state workers through 2010.

EDUCATION

-Increases spending in public school classrooms by $374 million.

-Increases college tuition aid grants by $37 million.

-Decreases aid to schools by $94 million, largely by deferring $560 million in pension contributions for school employees.

-The federal economic stimulus contains $2.2 billion that goes directly into various items in the budget - much of it for education.

HEALTH COSTS

-Decreases money to hospitals by $20 million.

-Increases aid to county psychiatric hospitals by $15 million.

-Expands Family Care program to provide health care for children by $149 million.

MUNICIPAL AID

-Decreases aid to cities and towns by $31 million, or around 2 percent.

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