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Christie, Buono Differ Sharply on Tax Cuts, Fiscal Challenges

Buono, who was serving as Senate Budget Committee chair when the Great Recession sent state revenues plummeting in 2009, has asserted repeatedly that she managed to cut $4 billion from the state budget without cutting school aid, and has criticized Christie for making deep cuts in the property tax rebate program.

But Corzine and Buono were able to offset those cuts with $1.1 billion in federal stimulus funding that was used for school aid, a one-year surcharge on the incomes of New Jerseyans earning more than $400,000, and a tax amnesty program that enabled Corzine to reinstate property tax rebates for non-seniors just before the budget was adopted in June 2009.

“Christie did what he had to do in his first year based on his priorities and policy decisions,” said Rousseau, who served as Corzine’s treasurer. “In the last Corzine budget, we used $3 billion in non-recurring revenues to balance the budget and protect vital programs such as school aid, municipal aid, and college aid. We made a decision to do the millionaire’s tax for just one year, and he made a decision during the ‘lame duck’ session before his inauguration not to extend it."

“Once Christie decided he wasn’t going to do any revenue enhancements, he was really limited in what he could do. The loss of the federal aid led him to virtually eliminate the rebate program and to cut school aid by an amount equal to the lost federal stimulus money. When we used up all the federal stimulus money in one year in 2009, we really believed there would be another stimulus package in 2010, but with Obamacare and the rise of the Tea Party, it never happened.”

The Debate Over Property Taxes

The cuts in the rebate program are at the core of the debate between Christie and Buono over the governor’s record on property taxes.

During his first two years in office, Christie pushed through a series of initiatives in cooperation with the Democratic-controlled Legislature that imposed a 2 percent cap on county, municipal, and school district spending increases; limited arbitration awards to police and firefighters; and required public employees at all levels of government to pay more toward their pensions and health benefits. These initiatives limited actual property tax increases to just 2.4 percent in 2011 and 1.4 percent in 2012.

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However, Christie’s cuts in the property tax rebate program reduced these average payments to $240 in 2011, $407 in 2012, and $440 last year for senior citizens earning up to $150,000 and other homeowners making up to $75,000. This was sharply lower than rebate payments under Corzine, which averaged $1,100 from 2007 to 2009; Christie also eliminated tenant rebate checks, which had averaged up to $850 for senior citizen renters under Corzine.

As a result, net property taxes for the average New Jersey homeowner rose 18.7 percent in Christie’s first three years in office when property tax increases and rebate cuts are added together, according to a NJ Spotlight analysis of state Department of Community Affairs statistics, compared to just 6 percent in the last three years of the Corzine administration. Under Christie, the $897 property tax deductions on the state income tax received by taxpayers making $500,000 or more were larger than the total of the rebate checks and income tax deductions received by middle- and lower-income families.

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