The New Jersey tax repeal movement is expected to take an important step forward today, with the introduction of five bills in the Senate to dismantle all $2.8 billion of Gov. Jim Florio's 1990 tax increases.
Departing Sen. Laurence S. Weiss, chairman of the Senate Revenue, Finance and Appropriations Committee, said Tuesday he would sponsor the legislation and hold public hearings on Monday.
Although Sen. Weiss, D-Middle- sex, was one of the key proponents of the tax increases last year, he said this week that a Republican sweep of the Legislature in the November election was a "clear and resounding message" that voters had rejected the idea.
Sen. Weiss said his bills would sunset the five tax increases on July 1, the start of fiscal 1993, unless the new Republican Legislature votes to continue them.
"The Republicans had a one-note message of tax repeal during the election campaign that resonated with the voters," Sen. Weiss said. "The delayed repeal will give them more than six months to develop alternatives to hold the budget together, provide school funding, and wrestle with property taxes."
Republicans overturned Democratic majorities in both houses last month to gain control of the Legislature for the first time in 20 years, installing veto-proof margins in the Senate and Assembly. although they unanimously opposed the tax increases last year and called for a repeal for several months afterward, most Republicans have since distanced themselves from support for a full $2.8 billion rollback.
Of the five measures to be introduced today, the Republican leadership has voiced support for only a portion of one: To reverse the 1% sales tax increase that brought the levy to 7% from 6%. Although the same legislation also expanded the sales tax to telecommunication services, detergent products, and other formerly exempt items, Republicans so far have not indicated whether they would suppofrt reversing those extensions.
Also left unclear is whether the new dominant party in the Legislature would support repealing the other four major tax initiatives they opposed last year. The largest of those, a $1.3 billion income tax rise, is a key source of revenue for the state, and Legislative analysts say Republicans would be hard-pressed to find that money elsewhere if a repeal movement succeeded.
Besides the sales and income tax bills, Sen. Weiss's legislation would undo tax rises for petroleum products, alcohol, and wholesale cigarette and tobacco products.
Several lame-duck Democrats have said they see enough support for many of the repeal bills in the Senate, but the outlook in the Assembly is said to be more doubtful. No repeal bills have been introduced in the lower chamber so far, but Legislative sources say a sales tax repeal proposal is likely early next week. The new Legislature takes power on Jan. 14.
Gov. Florio, the architect of last year's tax package, has remained noncommittal throughout the repeal debate, with aides saying he would decide the issue when legislation is submitted for his signature.
The state is planning a $450 million general obligation bond issue next week, market sources say talk of abandoning major revenue sources may complicate the sale. Both major rating agencies say an analysis of credit implications will have to wait until the legislative process advances further.
Standard & Poor's Corp. ended more than 40 years of triple-A ratings for New Jersey last July, dropping its assessment to AA-plus from AAA after the state resorted to several one-shot budget-balancing maneuvers. Moody's Investors Service has rated New jersey Aaa since 1977.