By David Cruz
For much of 2012, in town hall meeting after town hall meeting, Gov. Chris Christie was touting a Jersey Comeback and challenging the Democratically-controlled legislature to approve an income tax cut, even calling them into special session to put them on the spot. But even before the devastation of Hurricane Sandy, in fact before he spoke to the Republican National Convention, the governor’s Jersey Comeback was already starting to sound like wishful thinking, with revenues flat and the state’s economy in neutral. Then, Sandy.
“You look at tourism, wiped out down in South Jersey and Monmouth and Ocean counties. Folks were just laid off, so all the tax from all those jobs in Monmouth County gone,” said Republican State Senator Kevin O’Toole (R-40). “Sales taxes from all those purchases you might’ve had from say Bergen County, Moonachie, Little Ferry and in Atlantic County, gone, off the table.”
The bottom line to the state was another blow to an economy that had seen unemployment hovering above the national average and a housing market still glutted with foreclosures. Sen. O’Toole, who sits on the Budget and Appropriations Committee, says he won’t comment on the viability of the governor’s income tax cut proposal, but he remains bullish on the Jersey economy.
Democrats don’t exactly share that enthusiasm. Assemblyman Albert Coutinho (D-29), who chairs the Commerce and Economic Development Committee, says at this point, a tax cut is a pipe dream. “When you look at the revenue numbers, a tax cut is basically off the table at this point,” said Coutinho. “We are running $450 million off of our projected revenue for this fiscal year, so it’s pretty clear to any objective observer that we just will not be able to afford a tax cut.”
The Office of Legislative Services says the state’s economy will have to grow at a brisk 11.9 percent in order to meet the governor’s income projections. Even the most optimistic partisan would agree that those targets are going to be difficult to hit and with the fate of federal Sandy aid still uncertain, New Jersey taxpayers should get the thought of a tax cut out of their heads.
2012 did not produce the Jersey comeback the governor promised. Hurricane Sandy certainly had something to do with that, but the state’s economy was already wobbly before the storm. As 2013 approaches, the emphasis is now on recovery, a theme that both the governor and the legislature can finally agree.