>Posted by cjrothma October 16, 2008 05:11AM
Gov. Jon Corzine today will propose a broad stimulus package designed to protect the state against the global financial crisis.
https://www.nj.com/news/index.ssf/2008/10/governor_looks_to_aid_banks_an.html
With the state’s economic footing and his own political fortunes on the line, the Democratic governor is scheduled to address both houses of the state Legislature at noon at the Statehouse in Trenton. He is expected to speak for about 20 minutes in the Assembly chambers, which will be filled with economists, lobbyists and others eager to hear the former Goldman Sachs CEO’s plans.
Tim Larsen/Governor’s Gov. Jon Corzine
Corzine has said his agenda will “bridge troubled waters” in the short term and “lay a foundation” for growth when the downturn ends.
Earlier this week, Republican lawmakers proposed slicing the state sales tax in half during the holiday shopping season, saying it would help consumers and merchants beset by fears of a long economic downturn. The plan would cut the 7 percent state sales tax to 3.5 percent from Thanksgiving through Jan. 4. It also would halve the sales tax in Urban Enterprise Zones, which already charge a discounted 3.5 percent, to 1.75 percent.
Corzine plans to propose investing $250 million from the state pension fund in community banks to spur lending to small businesses, and directing $45 million in state funding to homeowners facing foreclosure, officials said Wednesday.
The infusion of pension funds would boost banks’ liquidity, helping local businesses to obtain the credit they need to operate, according to administration and legislative sources familiar with the governor’s proposal.
The state Economic Development Authority would play a matchmaking role between borrowers and banks, and the deposits from the pension fund would be insured, said the officials, who requested anonymity because they were speaking in advance of the governor’s address.
Help also would be offered to about 1,500 New Jerseyans in danger of losing their homes to foreclosure, through two initiatives that would spend $45 million from the state Housing and Mortgage Finance Agency to stabilize neighborhoods, according to Sen. Raymond Lesniak (D-Union), chairman of the Senate Economic Growth Committee.
The pension investment and foreclosure assistance programs represent a piece of the Democratic governor’s total economic-stimulus package. Overall, the plan is expected to contain more than 20 separate items ranging from emergency food and heating assistance to new tax breaks for businesses that create jobs.
Other components of Corzine’s plan include infrastructure projects such as roads and schools, a green jobs program encompassing wind and solar power and biofuels, and legislation to improve the state’s business climate.
The total cost to the state — not including the investment of pension funds — is expected to be about $150 million, to be paid for out of existing state revenues, the officials said.
Recognizing the moment’s political implications for Corzine, who faces re-election in 2009, Republican lawmakers have spent the week attacking his economic record and unveiling plans of their own, including a five-week sales tax “holiday.” Top GOP senators also urged Corzine to suspend real estate sales taxes and New Jersey’s new paid-family-leave requirements to help the state become more competitive with its neighbors.
“This state and its economy have been broken for a long time,” said Sen. Joseph Kyrillos (R-Monmouth), who reiterated support for the GOP proposal to cut the 7 percent state sales tax in half for the holiday shopping season. Corzine does not support that plan.
Assemblyman Lou Greenwald (D-Camden), chairman of the Assembly Budget Committee, said a proposal to allow businesses to carry net operating losses for 20 years instead of seven is among Corzine’s efforts to bring New Jersey in line with other states.
Making that change, and possibly others, to corporate tax policies “would send a strong message that New Jersey officials understand that job creation and job retention is the surest way out of this current economic downturn, and that we need to improve our business climate,” said Art Maurice, first vice president of the New Jersey Business and Industry Association.
James Hughes, dean of Rutgers University’s Bloustein School of Policy and Planning, said Corzine can affect the overall economic downturn in three primary areas — increasing state construction spending, assisting households caught up in mortgage foreclosure or joblessness and easing taxes and regulations on business.
But he cautioned that even the most comprehensive list of New Jersey cures will not reverse a steep global economic decline.
“The tides here are very, very strong. And there’s no way at the state level you are going to be able to confront them directly,” Hughes said. “At the most you can deflect them a little.”
https://www.nj.com/news/index.ssf/2008/10/governor_looks_to_aid_banks_an.html