The state’s $37.4 billion budget is a done deal. Under it, big businesses, the wealthy, ride share riders and vapers would pay more in taxes, but will the expected revenues cover the cost of state programs? Chief Political Correspondent Michael Aron sat down with Assembly Budget Chair Eliana Pintor Marin to hear why she thinks the dollars make sense.
Aron: Assemblywoman, what do you think of this budget that you helped usher into law?
Pintor Marin: I think I’m very proud of this budget that we helped become law and that we finally agreed upon. I think that it’s a budget that reflects some of our needs, you know with the homestead rebate. It’s obviously an increase in taxes which nobody likes to do, but I think that we’re at a point now where if we want to continue some of our programs and some of our sustainable growth, that we needed to do some things that we did and that were necessary.
Aron: Do you think the budget is balanced for real? The governor questioned some of the revenues in the Legislature’s plan. He ultimately signed it, so he certified that the revenues are there. Do you think they’re really there?
Pintor Marin: I think they’re there, however just like all other budgets, whether it’s at the state level, even in your own household, budgets are kind of an ongoing process. They change from, I think, month to month. Some months we have great months, some months we don’t have such great days. So, I think that it’s balanced, it’s fair. But I think that just like every other piece of legislation there’s always effects to it, so whether we might need to re-tweak some issues in the middle of the year, that’s nothing that’s abnormal.
Aron: You were in the room for some of the negotiations between the governor and the Senate president and the speaker. From the outside, this was a real political fight. What was it like in the room? What was the tone?
Pintor Marin: I think that when you say a real political fight people always like to hear that kind of stuff because it’s juicy, not that you’re responsible for any of that, Michael. I think that inside the room, to be honest with you, it was cordial. I think that in the most heated moments, everyone was still thoughtful in what they were asking and how they were asking. I think obviously towards the end of the negotiations, there was a little bit more tension, but everyone was very respectful. Everyone made sure that what their priorities were, they stayed at them, and I think that you saw that in the outcome. I think that everyone walked away with something that they were happy with.
Aron: The business community seems least happy with this budget. There’s a hike in the corporate business tax. There’s a hike on multimillionaires who earn more than $5 million. And then there’s a loophole that the governor has long wanted to close, the combined reporting loophole, which looks very complicated, but it’s going to hit some businesses. What’s your word to the business community?
Pintor Marin: Well, when I think when it comes down to the corporate business tax, one of reasons that the Legislature was kind of really pushing more on that end, more than the millionaire’s piece, was that it had to do with the federal windfall of money that with the federal tax changes, corporations were receiving a large sum of money in order to bring back home. Whether they were going to reinvest it, whether they were going to give employees raises, but it would be enough that we would be able to ask them for their fair share, so that was where we stood on the corporate business tax. The millionaire’s obviously was a part of the negotiation deal. Initially in the Legislature’s budget, we did not have that included. We felt that if we were hitting the corporations, that was really what we wanted to, because at the end of the day the corporate business tax really goes into the general fund, where as you can say the millionaire’s tax is a tax on people so it would go towards the property relief fund. Combined reporting was more of a last minute negotiation piece. The governor’s budget included that in there. We did not because we felt that if we were going to raise the corporate business tax, we didn’t also want to also “punish them” with the combined reporting, which we’ve also seen a lot of other states shy away from that as well.
Aron: But you’re going through with it.
Pintor Marin: We went through with it. I think that there’s probably a few tweaks that we still maybe need to come back to.
Aron: It had to do with profits that they make out-of-state or transferring money made in-state to a lower tax climate.
Pintor Marin: Especially when they have different entities under one name. But the state of New Jersey has pretty strict laws already with regards to how you combine your earnings and your losses.
Aron: Republicans think you shouldn’t have raised any taxes, that you should have cut spending. What do you say to that?
Pintor Marin: I think that we’re getting to that point. I think that we’ve made it clear, not only on the legislative side, but also obviously with our colleagues across the aisle from the Republican side, that come next year we’re going to have to take a look at some spending, and maybe what we can do to offset some of those spendings and maybe have to take a serious look at some cuts.
Aron: But not this year.
Pintor Marin: Well, obviously this year I think it was going to be very hard to do so with a new administration only being in for the first couple of months. I think that now that they have their feet quite wet, I would say we should start really taking a look at some of the areas that we would want to revamp and take a look at some of the savings.