"We're having budget hearings," Manzo said. "But the poll numbers show that people in New Jersey don't want an increase in the sales tax, and I agree with them."
Last month Gov. Corzine introduced a $30.9 billion budget that includes $2.5 billion in cuts and constrained growth. Total state spending growth has been constrained to $2.6 billion and the use of one-time revenue sources has been reduced by 80 percent compared to the average of the previous four fiscal years.
The new budget proposes $1.9 billion in tax increases and $2.5 billion in spending cuts.
Corzine said the budget was grounded in four principles: The state must stop spending more than it takes in; must stop borrowing from the future and using gimmicks to pay today's bills; must rely much more heavily on cuts in spending and savings than new revenues to balance the books, and, finally, the state must be smart in finding ways to mitigate these dramatic cuts to protect the most vulnerable in our state.
The state faces a huge shortfall, largely because of its increasing debt payments, its unfunded pension and health-care obligations.
"New Jersey's state finances need to get back onto a sound long-term footing, consistent with the values of our people and I am determined to deliver that end through our final budget," Corzine said. "The continuous use of the state's charge card to pay current operating expenses and stuffing bills into the desk drawers covering up our crises are over."
Manzo is discouraged by the need to increase the state's sales tax, saying that such a move would hurt Hudson County disproportionately as it will other poor urban areas around the state.
"It is a regressive tax that will have the greatest impact on working families throughout the state," he said.
Although Manzo admitted that Corzine did cut spending more than he increased taxes, Manzo disagreed with some of the areas that were cut.
"Not everything was cut," Manzo said. "The governor kept money in the budget for the anti-gang initiatives, and put more money toward some programs for the very needy and family care."
Manzo said he had met with Corzine early in mid-April to talk about his proposed Smart Bill.
"I agree to use some of the Smart Bill savings to cut the taxes from the state's millionaire tax," Manzo said, referring to a budget device introduced last year that increased the income tax levy to the state's highest income earners. "This would allow us to avoid the sales tax and still balance the budget."
As proposed by Corzine, the state budget produces $1.9 billion in new revenue and will primarily be funded though a one percent increase in the sales tax. This increase will cost the average New Jersey family of four an extra $5 a week or $260 a year. To lighten the burden on those with the least ability to pay, the budget also includes a proposal to ensure that households with earned incomes of less than $25,000 pay no state income tax. This will help alleviate the cost of the sales tax increase for low-income families.
Manzo said despite the caveat, the sales tax will still impact working people most, and said the state should take a closer look at the Smart Bill he proposed last year that would reduce property taxes by shifting the burden of paying for education from property taxes to income taxes of higher bracket earners in the state. Under this proposal, even those paying in increased income tax would get the benefit of lowered property taxes, and the bill would produce about $700 million in this year's budget.
"The sales tax will only bring in $1 billion," Manzo said. "I think the difference could be made up with cuts in other areas."
Manzo also opposes other changes in the budget such as the $2 increase in the Medicaid co-pay.
Corzine has promised to deal with the high level of property taxes, but said this week that the state budget issues must be resolved first. The state budget must be completed by July 1.