And it’s a good one, too. I don’t know how I’ve missed adding Robert Flach’s The Wandering Tax Pro blog to the blogroll on the right, but that error has been rectified. Robert reports extensively on the tax situation out of the swamplands New Jersey, the Garden State.
In any case, his blog is well worth reading if you’re into taxes.
New Jersey has been in my view the poster child of what happens when liberal tax and spend runs amuck. Eventually the money runs out in a downturn, and that appears to be happening in the Garden State.
Governor Jon Corzine proposed a budget that he described as “…cold turkey therapy for our troubled spending addiction.” The new budget is $33 billion, a $3.2 billion cut from the current year. Three departments will be permanently eliminated. Property tax rebates will be capped based on income and reduced for those who rent. No tax increase was proposed.
However, remember that Governor Corzine also proposed a huge fee increase last week—50% increase in the tolls on New Jersey’s toll roads. But those aren’t taxes….
In any case, residents of other states will soon be seeing similar stark reality budgets. Most Americans consider themselves overtaxed, and come this Fall there will likely be many government workers looking for employment elsewhere.
States are having tax troubles, and New Jersey is one of those. The Tax Foundation has a great story about how a South Carolina company was forced to pay off New Jersey in order to get a truck released from a weigh station from a “jeopardy assessment.” States are trying to make anything appear as if it creates nexus.
Meanwhile, New Jersey has budget problems. Big problems. As the Wall Street Journal reports, “In 1990 the state was $3 billion in debt. Borrowing has since grown at a compound annual rate of about 13%, and now the state is $32 billion in the red. Throw in unfunded pensions and health benefits for retirees, and that number swells to $113 billion, or $3,400 for every man, woman and child in the state. That’s three times per capita higher than the national average, making New Jersey the nation’s fourth-most indebted state.”
Governor Jon Corzine (D) proposes huge toll increases (50% a year in 2010, 2014, 2018, and 2022) but legislators aren’t thrilled with the idea. Perhaps the idea of limited government might take hold in the swamplands. Where are the Sopranos when you need them?
Like the raindrops that have been falling relentlessly here in Orange County, so also have been the charges of corruption in New Jersey. The Mayor of Guttenberg, David Delle Donna, and his wife, Anna, have been indicted on charges of tax fraud.
The couple were already facing charges of mail fraud and extortion. They are alleged to have accepted bribes to pay for Mrs. Delle Donna’s cosmetic surgery. Federal authorities also allege that they accepted bribes in the form of gambling trips to Atlantic City, liquor, and a dog…a dog that cost more than $1,000.
Mr. Delle Donna won’t be stepping down voluntarily from his mayoral position. The couple’s attorney says that, “They look forward to their vindication in the court of law.” If they’re not vindicated they may be looking at an extensive stay at ClubFed; if convicted on all counts they face more than 20 years and significant fines.
California is not the only state with a budget crisis. The swamplands, aka New Jersey, face a projected $3 billion deficit for the next fiscal year according to this story.
Governor Jim Corzine (D) has asked his administration to find $3 billion to cut. Interestingly, New Jersey instituted one of the largest state tax increases ever in 2006. New Jersey is considered by the Tax Foundation to have the third worst tax climate for business (even surpassing California).
Governor Corzine has complained about debt (presumably bond interest) that costs New Jersey about $3 billion annually. But who has proposed that debt, and signed the laws allowing that debt to be borrowed? New Jersey’s legislature is controlled by Democrats, and its governor is a Democrat.
This summer is going to be very interesting for state budgets throughout the United States. Special interest groups will say, ‘Cut them, not us.’ The problem is that today almost everyone considers themselves a special interest group. Will governors actually cut programs? Will they increase taxes? Or will they try to balance their budgets with smoke and mirrors?
If you’re a New Jersey resident, make your views known with your local representatives. It’s an election year, and they ought to listen.
As to what will happen, given New Jersey’s past I suspect smoke and mirrors will win out.
It happens every year. No, I’m not talking about school starting (here in Irvine, today is the first day of school), or the leaves changing colors. I’m talking about the corruption arrests in New Jersey.
Various elected officials in New Jersey are now finding themselves under arrest after the FBI set up a sham company in a corruption sting. Eleven individuals were arrested; these include the Mayor of Passaic, Samuel Rivera; Assemblyman Mims Hackett, Jr (who is also Mayor of Orange, NJ); and Assemblyman Alfred Steele, who doubles as the Passaic County Undersheriff. From published reports, it appears that all 11 who were arrested are Democrats.
The defendants are accused of asking for bribes of between $1500 and $17,500. The probe stemmed from last year’s corruption scandal in the Pleasantville, NJ school district.
Business as usual continues in New Jersey…
News Stories: New York Times, NorthJersey.com
If you’re going to submit phony tax returns, it’s a good idea to vary the names you use. Even poorly run tax agencies might catch on if they receive several hundred refund checks from the same address.
That bring us to the present, in the swamplands (aka New Jersey). Three individuals were arrested today for allegedly committing the largest tax fraud in the state’s history. The three defendants cashed $826,974 in refund checks, having submitted 540 allegedly fraudulent tax returns. New Jersey officials were able to stop payment on over $1,000,000 in other checks.
What made New Jersey officials suspicious? This news story indicates that the defendants used similar names and employers and common addresses. When arrested, the three defendants were found with $200,000 in cash, blank social security cards, and tax forms (including W-2 forms).
As I mentioned previously, New Jersey increased its sales tax earlier this year. The Garden State also expanded what is covered by sales tax. Tattoos, massages, limousines, and data processing services are just some of the itmes that the state will now get a cut of, as of October 2nd. And ITunes downloads.
Yes, online music downloads are taxable in the swamplands. So if you want the latest song from Disturbed (my writing partner’s favorite band) or the Red Hot Chili Peppers, Apple will be collecting sales tax. All to balance a budget by not cutting spending.
I almost labeled this post, “The Shock! The Horror!” Yes, another New Jersey corruption arrest. But my sarcasm quotient is slim when I’m low on sleep (I’m just back from Dallas), and I discover that Jack Westlake, a partner of John Lynch has also pleaded guilty to tax evasion. Mr. Westlake, 76, admitted that he didn’t pay tax on $350,000 in taxes in 1999.
With the college football season beginning this weekend, and with pro football starting just one week later, it’s time to root for your favorite team(s). Residents of New Jersey have gotten a head start—the National Conference of State Legislators has found that New Jersey’s budget increased the most of any state!
New Jersey’s budget increased by $1.9 billion, a five percent increase. New Jersey is now number one in sales tax (tied with three other states), number one in cigarette tax, and number one in property tax. What a trifecta!
On the other hand, some states actually decreased taxes this year: Arizona, Nebraska, Oklahoma, Utah, and Wyoming.
New Jersey, of course, suffered through the budget shutdown crisis in July, and the Garden State’s new $30.8 billion budget increased sales tax from 6% to 7%. In an article in the Newark Star-Ledger, New Jersey Senate Minority Leader Leonard Lance is quoted as saying, “Businesses are fleeing New Jersey as well as residents, and it’s very discouraging.”
There was one bit of good news in the article. New Jersey’s gasoline tax (14.5 cents/gallon) is the third lowest in the U.S. Unfortunately, New Jersey has the second worst tax climate for business (according to the Tax Foundation), and until that problem is corrected the Garden State is caught in a perpetual slide.
