N.J. Governor Corzine to middle class: Drop Dead

I've been reporting from the Statehouse for 33 years now and I've heard some nutty stuff. But this has to qualify as the nuttiest line I've ever heard:

"To help pay for the rebates, we have proposed eliminating the property tax deduction next year for everyone but seniors."

Gov. Jon Corzine said it yesterday during his budget speech. I still can't believe I heard it.

Back in 1976, when I first started reporting on the antics in Trenton, the affable and smooth-talking Brendan Byrne sold the state on adopting an income tax by arguing that it would produce revenue for the property-tax rebates. We've now reached the point where Byrne's Democratic successor is proposing to impose the income tax on the property tax to fund rebates. Worse, those rebates will now be cut off at a mere $75,000 in annual income.

You have to make more than that just to get by in the part of the state where this newspaper circulates. So unless you're a senior citizen, not only do you lose your rebates, but you're now being taxed to give someone else a rebate.

And you're being taxed at a very high rate. As it happens, the second-highest income tax bracket, 6.37 percent, kicks in at that $75,000 level. So every cent of this new-found "income" will be taxed at the top rate that most middle-class people pay.

Let's look at the effect on a $100,000-a-year family with an $8,000 annual property-tax bill. Last year, they could have gotten an $800 rebate check in the mail -- signed by the governor. This year, they'll get an additional income-tax bill of $510. But I'll bet Jon Corzine won't be putting his John Hancock on that one.

Actually, I bet he won't be putting his signature on much of anything after November. With this new budget, Corzine confesses publicly that the Democrats will never deliver property-tax relief to the middle class.

He's still delivering for the special interests, however. The public-employee unions may grumble at those proposed furloughs for state employees, but the bulk of public jobs are on the municipal, school district and county levels. Those union members escape unscathed from this budget for fiscal 2010, which begins July 1. The urban Democratic machines will also keep receiving their billions in state aid.

So Corzine can count on the votes of the two core constituencies of the Democratic Party. But I'm not sure he can survive the triple whammy on the taxpayer. In addition to cutting your rebates and taxing your taxes, Corzine's budget proposal also calls for a freeze on state aid to suburban school districts. He's not proposing a wage freeze for school workers, though, so your property-tax bill will be going up to cover their raises.

And he also threw in another sweetheart deal to keep the teachers' unions happy through the fall. He's increasing funding for existing preschools by $52 million and throwing in another $25 million to begin the expansion of preschool into about 80 more districts.

If you think taxing your property tax is nutty, ponder for a minute the fact that this preschool expansion was part of the Democrats' 2007 property-tax reduction plan. That's right, I said "reduction." How do you reduce property taxes by adding an expensive new service? I've been pondering that for two years and still haven't figured it out.