In this proposed spending plan, there's good news and bad news. The good news involves property taxes and the schools. The budget will see about $16.6 billion dedicated to property tax relief, including cutting property taxes by 20 percent for most property owners. Also, the budget also provides $580 million in aid to the state school districts, a proposed average 3 percent increase. However, the poorest school districts, known as Abbott districts, received no increase - or, in the case of Jersey City, saw a decrease in money.
"The real news of this budget isn't what's in it, but rather what's not," admitted Corzine, "and what will never be in future budgets unless, together, we do something to further restructure the state's finances." Worse yet, the budget remains flat for the state's "Charity Care" program that reimburses hospitals for poor or underinsured patrons who come into emergency rooms and must be treated. Local legislators, who have until June 30 to approve the budget, are concerned about hospitals losing the funds.
Concerned about the hospitals
"The proposed budget is a classic good news-bad news scenario," said 32nd District Assemblywoman Joan Quigley, who also works for the newly-named Hoboken University Hospital, last week. "It helps the municipalities and it helps most of the schools. But the budget severely hurts the hospitals, especially with a reduction in Charity Care." This year will be the sixth consecutive year that Charity Care remained fixed, despite increasing costs. "Much like the 17 million patients they treat each year, New Jersey's 81 not-for-profit hospitals are ailing," said Gary Carter, the president of the New Jersey Hospital Association, last week.
Selling the toll roads
Another item of concern for local legislators is the possibility of leasing the state's toll roads in order to pay for budget shortfalls. The term Corzine likes to bandy about is "asset monetization," or the selling of or leasing state assets. In Corzine's budget address, he again touted the benefits of such a plan.
"Potentially, asset monetization could reset the state's finances by dramatically reducing our debt burden, and consequently reducing debt service," said Corzine. "Monetization could free up as much as a billion dollars or more in every year's budget - long into the future."
In recent weeks, State Sen. Ray Lesniak authored legislation that would lease two of the state's most traveled highways to private investors for 75 years. Lesniak has made the case that the lease agreement could generate for the state as much as $15 billion, allowing the state to pay some of its $50 billion debt and to invest funds in schools. But not everyone sees the rosy picture that asset monetization paints.
Assemblyman Louis Manzo (D-31st Dist.) has been a staunch opponent of leasing the Turnpike and Parkway to someone else. In particular, the Turnpike has at least 10 exits that run through Hudson County, and an estimated one-third of Turnpike workers reside in Hudson County. Manzo, in an interview last week, said his concern comes from studying what will happen to the Indiana Toll Road as its state government is considering leasing the roadway, and the Chicago Skyway, which was leased to private companies.
"Tolls on the Indiana [road], when leased, would be scheduled to be hiked 70 percent in 2011," said Manzo. "That could lead to a situation where more trucks and cars will be going onto side streets, creating more traffic." Quigley said she is not in favor of the leasing of the Turnpike, but would be in favor of other money-making ideas such as selling naming rights of state parks or leasing the operation of the New Jersey Lottery, which won't have as much an effect on someone's pocketbook.
Property tax relief
"This is a property tax relief budget, and it will mean more in the wallets of New Jerseyans fighting to make a living in the Garden State," said state Sen. and Bayonne Mayor Joseph Doria (D-31st Dist.) in his response to Corzine's address. Doria's Senate district covers Bayonne and parts of Jersey City. The overwhelmingly positive aspect is that most of the state's 2 million property tax payers will receive an average of $1,000 in relief - $750 of which is new money that will come from the revenues from the increased state sales tax that went into effect in 2005.
Under Corzine's proposed $2 billion tax relief program, those with incomes up to $100,000 would be covered for 20 percent of property tax bills; 15 percent for those with incomes from $100,001 to $150,000, and 10 percent for those earning $150,001 to $250,000. The program would be a welcome sight for residents of Hudson County towns such as Bayonne and Guttenberg, where in 2006 taxpayers paid $7,101 and $6,729, second and third to Kearny for highest property taxes in the county.
Assemblywoman Quigley said the budget is definitely "good news" for Hudson County taxpayers. Quigley represents in the Assembly parts of Jersey City as well as East Newark, North Bergen, Secaucus, Harrison, Kearny, and Fairview. Quigley also looks forward to Corzine sticking to an agreement he made with Quigley and other legislators. He agreed to keep his firm stance of capping municipal tax levies at 4 percent, but making exclusions for items such as health insurance and guaranteed employee contracts, both known to increase budgets.
This year's budget is welcome news for a number of Hudson County school districts. Among those districts seeing the largest increase in school aid was Guttenberg, which will receive $3.9 million for the 2007-2008 school year, a 12.9 percent increase from 2006-2007. That was followed by Bayonne getting $37.9 million for 2007-2008, an 11 percent increase from the previous school year, and North Bergen getting $39,421,313, a 10 percent increase. The district that suffered the biggest blow was Jersey City, which saw a little over $3 million decrease in aid from $428.5 million to $425.3 million for the upcoming school year. The decline is less than 1 percent shrinkage.
But that means Jersey City taxpayers may have to make up the difference, which doesn't sit well with Assemblyman Manzo. Manzo represents Bayonne and part of Jersey City in the Assembly. Manzo on Tuesday sent a letter to Education Commissioner Lucille Davy expressing dismay at the situation facing Jersey City with the shortfall in school aid. "Clearly, this will hurt the local taxpayer, as they will be the ones charged with compensating for the $3.2 million deficit," stated Manzo in the letter. "Simply put, our already over-burdened taxpayers cannot afford to pay one more dollar with regard to the school portion of property taxes."
Manzo also said in the letter that he directed the state's Office of Legislative Services to draft two bills. One would re-appropriate back into the budget the $3.2 million stripped from the Jersey City School District. The second bill will reconfigure the current formula for assessing tax-abated properties for the school portion of the property tax bill, which would produce more monies for the school district. Residents of tax abated properties, especially in Jersey City, make their payments directly to the city and that money is not allotted to the school district.
Ricardo Kaulessar can be reached at email@example.com