From the Associated Press:
Assembly lawmakers on Tuesday said the state should weigh allowing cities and towns to impose their own taxes as more woes were predicted for New Jersey’s troubled state finances.
The Legislature’s budget official predicted the state will collect $289 million less in taxes next fiscal year than Gov. Jon S. Corzine has estimated as economic activity slows in the coming months.
“It should be clear that most of the risk in this forecast is on the downside, and it is easy to imagine plausible economic scenarios in which the outcome is considerably more dire,” David Rosen, the legislative budget and finance officer, told Assembly lawmakers.
Corzine’s $33 billion budget already calls for cutting spending by $2.7 billion to try to right finances plagued by high debt and taxes.
A $289 million shortfall would require either additional cuts or increased taxes, but Corzine has said he currently doesn’t support tax increases. He has also said he wouldn’t be surprised if less revenue came in than was estimated.
But Greenwald said lawmakers should look at how other states let municipalities charge their own taxes.
New Jersey local governments raise nearly all their revenue from property taxes, which average $6,800 per property owner in New Jersey, twice the national average.
But New York, for instance, allows local governments to add their own sales taxes. Many states and cities allow local income taxes. Some have a personal property tax on cars, trucks, motorcycles and other vehicles.
“We ought to look at that, too,” said Assemblywoman Joan Quigley, D-Hudson.
Corzine said letting municipalities impose their own taxes “makes sense and could potentially go a long way to relieving some of the pressure that exists with property taxes,” but was uncertain amid economic worries.
“I’m not particularly inclined to think that having new taxes at a time of economic recession is a good idea, so I’d be a little hesitant about the immediate imposition,” Corzine said.