Christie expected to propose a 10% income tax cut...question about it
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I don't know about that, I do know of cities in Pennslvania that have built up rainy day funds...not sure about states. Definitely not sure about NJ. But couldn't you "spend" it into something called a "rainy day fund"? Or, maybe you're right and the best answer is extra debt payments. That would reduce future years' interest expense, wouldn't it? thus, creating larger projected surpluses each year?
And why not use the surplus to fund the pensions? Is that no longer an issue?
I would think debt service makes the most sense. Pay down the debt which would make future debt easier to finance and avoid interest in the long term. Though, I am not sure how the specifics work when it comes to bonds, can a state prepay its bond obligations? I'm not sure if they can, or if they did do it, they would probably have to pay them out at the redeemable interest rate. Even if there was no interest savings, just the fact we are carrying less total debt makes sense to me.
As for the pensions, that has apparently been "fixed". The plan the governor outlined for making the payments and the concessions he got during the reforms have apparently balanced the fund assuming we follow the plan to the letter.
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Originally Posted by manderly6
It seems a little crazy that you can't build some cushion in to the budget. Given all the projections and uncertainty it would seem like a good idea. You would think it would be easy enough to project a surplus and then say if it actually exists at the end of the year it would be used to pay down debt or something like that.
I think the hinge issue is projection versus actual. I don't think they can pass a budget that has a projected surplus, period. Not sure on whether or not that can be pushed into a "rainy day" fund. I do know that like last year an actual realized surplus could be spent however the state wishes.
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Originally Posted by bradykp
well, the first thing to be worried about is the fact that most States don't follow GAAP (generally accepted accounting principles), which is why these numbers are always so difficult to figure out anyways. I'd love to balance my household budget by saying I'm just not going to make mortgage payments for the next few years, and have that be acceptable.
Wouldn't it be nice, lol. Oh, I don't have enough money to fund my lifestyle, so I'll just issue some bonds redeemable in 30 years at 1% interest...by then it will hopefully be someone else's problem...but that doesn't matter, cause tonight we're going out for lobster.
We are paying over 200 million a year in payments for the last income tax scheme i mean cut by Gov. Whitman. She doled out money we didn't have 20 years ago. Any person with a brain can read thru this. We owe 30 billion in debt service, and the state owes about 40 billion in unfunded liabilities to the pension system and all of sudden your highness wants to give back money for votes. This is bizarre.
We are paying over 200 million a year in payments for the last income tax scheme i mean cut by Gov. Whitman. She doled out money we didn't have 20 years ago. Any person with a brain can read thru this. We owe 30 billion in debt service, and the state owes about 40 billion in unfunded liabilities to the pension system and all of sudden your highness wants to give back money for votes. This is bizarre.
Agree. Whitman was a total disaster as a governor.
I am not wise to politics as I need to be, but I read a comment on the link below that says a 10% income tax cut would only benefit wealthy, upper-class citizens. The commenter says that the lower and middle class would not benefit. For example from the commenter, someone earning $50,000 a year would only save $80 while someone earning $1mil would save $7,2650 [sic].
(Not sure if the commenter meant $7,265 or $72,650, but either way it's a much better outcome than a middle-class citizen like me.)
Single person with $1,000,000 Income
-$75,298 New_Jersey tax
-$297,964 federal tax
$626,738 after tax
Single person with a $75,000 Income
-$3,410 New_Jersey tax
-$11,704 federal tax
$59,887 after tax
You can take 10% off the NJ tax line.
If you don't pay in as much as someone else does, of course your "savings" isn't going to be as high as theirs. I also kinda wonder if a $7K "savings" to someone who has $1M sitting on line #37 is really that big of a deal? Kinda like how $80 doesn't sound like much "help" or "savings" to someone making $50K?
Since NJ funds NJ public school education through property taxes, until the entire state public education system is re-vamped, from the stinking head to the smelly tail, and streamlined to be run by a few instead of the many, I don't see property taxes getting cut significantly any time soon.
If my property taxes were reduced to cut out funding public schools, that would be a $7K+ savings for me, and the majority of my neighbors. They'd still be higher by a few K than, say, an 8,000 square foot, 10 bedroom, 9.5 bath, ocean front house with an in ground pool and private walkway to the beach on the Outer Banks, but whatever.
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