Tax Relief and School Funding

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Tax Relief and School Funding
REPUBLICAN BUDGETALTERNATIVESFY 2008

• JUNE 6, 2007

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1.5 BILLION IN SPECIFIC SPENDING CUTS AND
CHANGES REDIRECTED FOR1 billion of direct
property tax relief.300 million to support
local schools.No playing of favorites
(Christmas Trees.)
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PRINCIPLES GUIDING PROPOSED BUDGET CHANGES

• Substantial additional tax relief is essential to
  making New Jersey affordable.
• Substantial additional funding for schools is
  long overdue and will have a positive impact on
  reducing property taxes.
• Significant, structural spending reductions are
  necessary to pay for changes.
• The overwhelming majority of people who believe
  government is wasting their money are right.
• It is unconstitutional for the Legislature to
  play favorites amongst a class of similarly
  situated entities and award grants to named
  corporations.

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1.5 Billion of Budget Changes

• ALL spending in the budget can be controlled and
  this a reasonable start.
• Spending under Democrat control has skyrocketed
  almost 50 in just 5 years. Democrats say
  spending must increase dramatically every year
  because they are unable to do anything about
  statutory mandates, contractual obligations, and
  court decisions.
• Republicans believe that all spending in the
  budget can be controlled and will take whatever
  steps are necessary to achieve spending
  reductions.
• These 1.5 billion in spending cuts come on the
  heels of nearly 3 billion of cuts offered by
  Republicans in the past two years. Democrats
  ignored those proposals.
• 1.5 billion is approximately 5 of the budget
  and is 15 of the Democrat spending increases
  over the past five years. It is a manageable
  first step towards real spending cuts.
• Republicans are aware we must make an effort to
  work with the Democrat-controlled Legislature so
  we are proposing this level of cuts. If
  Democrats cant make this level of spending cuts,
  then they have no business being in control of
  our government.

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1.0 Billion of Direct Property Tax Relief

• Enacting 1.0 billion of property tax relief now
  is essential to begin making New Jersey more
  affordable.
• NJ State government will take 10 billion more
  from people than just five years ago -- an
  increase of more than 1,000 for every man,
  woman, and child. At the same time, property
  taxes have skyrocketed. These tax increases have
  helped make New Jersey unaffordable.
• An additional 1 billion should be given back to
  people directly as up to 30 direct credits on
  residential property tax bills.
• People making more than 200,000 would be limited
  to 20 credits, not to exceed 5,000.

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300 Million for Schools

• 300 million would be redirected to school
  districts that have not received aid increases
  over the past five years.
• This new funding would be distributed based on a
  fair, per-student basis.
• Local districts could use funds to reduce local
  school taxes or to improve local education.

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Principles Used to Pay for Tax Cuts and New
Priorities

• Spending must be essential and non-deferrable.
• The following questions were asked in order to
  determine the necessity of an appropriation
• Is the program necessary?
• Is the program essential and only capable of
  being funded with tax dollars?
• 3. Can the program be restructured or
  consolidated with similar programs to achieve
  savings?
• 4. Can the spending be deferred until such a
  time as the State regains its financial footing?

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Salaries, Benefits Perks

• Overtime Reduction 17,700,000
• State Cars Reduced Number / Plan 2,500,000
• Eliminate Political and Non-essential
  Titles 25,000,000
• Departmental Efficiencies / Reduce Funding
  SOTP 25,000,000
• and Consultants
• BPUPatronage / Wasteful Leases 4,500,000
• Corrections Construction Managers
  250,000
• Commissions and Boards
  3,600,000
• Gifts to Employees 12,000
• TOTAL 78,562,000

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Suspension of, or Reduction in, Non-Essential
Programs

• Henry R. Raimondo Legislative Fellowship
• Program
• Wynona Lipman Chair in Womens Political
  Leadership
• Additional Funding for Newark Museum
• Teacher Quality Mentoring
• High Expectations for Learning Proficiency
• New Jersey Performing Arts Center
• Halfway Back Program
• Joint Management Commission
• Joint Committee on Public Schools
• TOTAL

69,000 100,000 773,000 2,500,000 16,90
0,000 4,000,000 1,000,000 1,000,000 350,0
00 26,692,000
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Elimination of Low-Priority Programs

• New Jersey Law Revision Commission
• Clean Ocean and Shore Trust Commission
• Gov. Contingency Fund
• Urban Forestry
• Childrens Garden
• Interest on Short Term Notes
• New Jersey Network
• Motor Vehicle/Transit Ads, publications
• Interstate Environmental Commission

400,000 144,000 2,875,000 4,000,000 625,
000 10,000,000 11,000,000 3,100,000 383,00
0 32,527,000
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Elimination of Politicized Spending

• Local Finance Board
• University of Medicine and Dentistry
• Stratford Campus
• Studies and Assessments of Toll Hike Borrowing
  Scheme
• TOTAL

200,000 3,450,000 4,500,000 8,150,0
00
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Deferral of New Spending

• Offender Re-entry Program
• Purchase of Service for Inmates
• State Rental Assistance Program
• Cancer Institute
• Family Planning Services
• SACWIS
• New Jersey Stem Cell Research Institute
• Commission on Science and Technology
• Judiciary Share of Reductions
• Black Bear Management
• Statewide Assessment Program
• Postponement of EITC Expansion
• TOTAL

250,000 7,948,000 17,500,000 3,000,000 2,742
,000 2,400,000 5,500,000 5,000,000 2,000,000
850,000 4,500,000 64,000,000 115,690,000
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Consolidation

• Department of Personnel Eliminate and
• Reorganize Necessary Components
• Department of the Public Advocate
• Eliminate and Reorganize Necessary
• Components
• Department of State Eliminate and
• Reorganize Necessary Component
• Passaic River Litigation
• Warehousing and Distribution Costs
• TOTAL

10,000,000 9,000,000 4,873,000 6,500,00
0 800,000 31,173,000
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Restructuring of Abused Programs
6,500,000 500,000 450,000,000 80,000,000 35
0,000 9,796,000 5,500,000 11,000,000 2,500,000
4,630,000 570,776,000

• DOT Outstanding Receivables
• Site Remediation Responsible Party Billings
• Fair Funding for Abbott School
• Districts
• Pension Reform
• SEA Bonuses
• South Jersey Port Corporation
• Procurement Reform / Energy Savings
• Advertising-Cigarettes
• S L I
• Additional Formula Aid
• TOTAL

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Elimination/Reduction of Politicized Property Tax
Relief
8,000,000 16,500,000132,000,000 21,903,000
12,500,000 4,000,000 3,000,000 1,214,000 15,0
00,000 214,117,000

• County Prosecutor Funding Initiative
• Pilot Program
• Trenton Capital City Aid
• Special Municipal Aid
• Abbott-Bordered District Aid
• Extraordinary Aid
• Englewood Implementation Aid
• Liberty Science Center
• New Brunswick Special Aid
• Essex County Aid
• TOTAL

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Revenue / Delayed Debt

• Inmate Contributions
• Payments In Lieu of Taxes for Education
• Eliminate Motion Picture Tax Credit
• Anticipated but Unneeded Debt
• Service Payments
• Urban Enterprise Zone Repayments
• South Woods Hot Water Distribution Recovery
• School Construction Recoveries
• TOTAL

6,000,000 20,000,000 10,000,000 16,050,000 1
40,000,000 6,000,000 15,000,000 213,050,000
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Technical Overfunding

• Overfunding of various programs has been
  identified by OLS analysts and funding can be
  reduced without affecting program results.
• TOTAL 31,042,000

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Traditional Pork

• There will be at least 150 million of grants
  unconstitutionally awarded by the Legislature to
  named corporations and local governments. The
  practice, begun in the 1970s, clearly violates
  constitutional prohibitions against the
  Legislature playing favorites amongst a class of
  similarly situated entities. There is also 30
  million in unspent pork funding in the current
  year which should be lapsed.
• TOTAL 180,000,000

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Grand Total

• Salaries Benefits
• Suspension of Non-Essential Programs
• Elimination of Low-Priority Programs
• Elimination of Politicized Spending
• Deferral of New Spending
• Consolidation
• Restructuring of Abused Programs
• Elimination of Politicized Property Tax
  Relief
• Revenue
• Technical Over-funding
• Traditional Pork
• GRAND TOTAL

78,562,000 38,692,000 32,527,000 8,150,000 11
5,690,000 31,173,000 570,776,000 214,117,000
213,050,000 31,042,000 180,000,000 1,513,779,0
00