Bad-News NJ Budget Could Render Political Fallout

The $29.8 billion budget proposed Tuesday by Gov. Jon S. Corzine slices property tax rebates to the middle-class, increases taxes on businesses already reeling from the recession and calls for wage concessions from 80,000 state workers.
    
And that's just for starters.
    
Less clear is the amount of political damage in the bare-bones budget the year Corzine and the 80-member state Assembly are up for re-election.
    
“For a lot of people, this is bad news,'' said Fairleigh Dickinson University political scientist Peter Woolley. “People really aren't in the mood to be paying more taxes.''
    
Criticism of the budget proposal has been swift and harsh. While Corzine and his team tried to portray the budget plan as a thoughtful, painstaking document, Republicans uniformly slammed it as a double-whammy for middle-class residents who stand to lose the property tax deduction on their income taxes along with their rebate checks.
    
“I consider this a charge that makes no sense in the overall context of how this budget is put together,'' Corzine said Friday, deflecting criticism that his recession-year proposal hurts middle-class taxpayers.
    
“I think when you provide $33 million for student assistance, when you increase funding for public education, provide support for our municipalities and our hospitals, keep them open, you're helping the middle class,'' Corzine said.
    
The budget Corzine proposed cuts spending to 2006 levels. It requires state workers to give up their 3.5 percent negotiated pay raise and take additional unpaid time off; fails to fully shore up the depleted unemployment insurance fund, triggering an automatic tax hike to businesses of about $80 per employee; and raises taxes on liquor and cigarettes. The budget also adds $304 million in education funding; funds food pantries and anti-foreclosure programs; and expands preschool in poor districts.
    
"He had to make decisions that would hurt him politically,'' said Clay F. Richards, assistant director of the Quinnipiac University Polling Institute. “He undoubtedly did the polling beforehand so he knew how to minimize the damage.''
    
For example, Richards said the governor's internal polls would have guided him to the level of income at which property tax rebates became less important to homeowners and renters. (Corzine's budget proposes eliminating rebates for non-senior households earning more than $75,000 a year.)
    
Suburban Democrats already hinted that the rebate ceiling could be raised and that the income tax deduction may be saved during negotiations over the next few months. The budget requires legislative approval and must be in place by July 1.
    
In a budget speech with clear political overtones, the governor painted himself as a fiscal reformer who's run into a global economic wall. He's made hard choices, he said, to position New Jersey to recover faster and emerge stronger when the economy turns around.
    
His poll numbers tell a different story.
    
A Quinnipiac University poll this week has Corzine down by 9 points to former U.S. Attorney Christopher Christie, the front-runner for the Republican nomination. What's worse, more than half the respondents (56 percent) disapprove of the way the former Wall Street CEO has handled the economy.
    
Asked if New Jersey should be led through the economic crisis by a businessman like Corzine or a new face like Christie, 37 percent chose the businessman compared with 49 percent who chose the new face.