California isn’t the only state that’s looking to raise taxes during a recession. The swamplands (aka New Jersey) are also looking at this tactic.
Governor Jon Corzine (a Democrat), who coincidentally is up for reelection this fall, is proposing a 0.97% increase in taxes on those who make more than $500,000. The tax would be for just one year, and would help to close a $7 billion budget deficit. Governor Corzine’s budget proposal is $3 billion less than the current year.
Also included in Governor Corzine’s proposal is cutting payments into the New Jersey state pension system by $500 million. That may be problematic: Most state pension systems have funding shortfalls. Cutting payments into the system will only exacerbate these problems.
Severe budget cuts will likely be coming to a state near you, too. It’s not just a California issue.