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1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Quote from jnorty:
nice article
http://www.telegraph.co.uk/finance/...US-wrath-by-pushing-global-financial-tax.html
Thanks Jnorty
Now here is for reading between the lines for those who have followed Brown and downing street's words. First a few weeks ago it was only tobin and not the other type of options like innsurance fees. resolution fund, now Brown includes that in his rhetoric. Also Downing street was also a staunch backer of Brown for the tobin tax, now it just wants a debate on how bank failures can be avoided See the quote below from Downing Street
Downing Street claims that Mr Brown's plan is not a Tobin Tax â named after the Nobel prize-winning US economist James Tobin who proposed a tax to reduce the volatility of currency exchange rates by stopping speculative trading on foreign exchange. Officials travelling with Mr Brown instead argue that the debate needs to be held about how future crises can be avoided.
I just totaled up the total aggregate dollars traded in NYSE and Nasdaq for Wednesday assuming a 30 day moving average of volume and Wednesdays closing price.
Total transaction in dollars is:
$2,327,771,000,000
Thats $2.3 trillion dollars a day exchanged.
Now take that and times by 0.25%:
$2,327,771,000,000 * 0.25% =
$5,819,427,500
Nearly $6 billion dollars in daily taxes are generated.
Granted, the majority of this is being traded through large institutions. It would be interesting to see them come up with numbers of how much retail traders trade every day. I seriously think they will not be able to come up with such numbers unless they ask the clearing houses to fork over data.
The question is, why are the typical investors, the bulk of Americans in this country being PENALIZED? Picking on the little guy will introduce very little competition and variance in mutual fund results - most will simply track the indexes. There will be no losers or winners when everybody is doing the same thing and collecting management fees.
"According to Mr. Baker, the co-director of the Center for Economic and Policy Research in Washington, the fees would raise a ton of money, perhaps $100 billion or more annually"
With no numbers to back up that statement, this clearly is a total bs bill where numbers are "being pulled out of one's ass".
A "liquidity usage" tax is not the way to go. It can be looked at that the government is directly intervening in the stock market. It bleeds of corruption and manipulation when dollars are to be told to go to the mutual fund industry.
Rather, what should be done and requested by the investor groups of this country is that a REASONABLE FIXED FEE be charged to each side of a trade.
Also, it should be clearly stated what this bill is supposed to accomplish in term of HOW MUCH REVENUE is to be generated and WHAT TIMELINE.
If politicians are looking at the stock market to dip their hands into, then this is truly a bad sign in efficient markets. They want the money as soon as possible and when the goal is reached they will continue to leave this program open generation trillions of dollars in the future.
This is wrong. Its time that the American people start seeing things for what they are worth and fight back against the continual raping of the American citizens. We need less government, not more.
Total transaction in dollars is:
$2,327,771,000,000
Thats $2.3 trillion dollars a day exchanged.
Now take that and times by 0.25%:
$2,327,771,000,000 * 0.25% =
$5,819,427,500
Nearly $6 billion dollars in daily taxes are generated.
Granted, the majority of this is being traded through large institutions. It would be interesting to see them come up with numbers of how much retail traders trade every day. I seriously think they will not be able to come up with such numbers unless they ask the clearing houses to fork over data.
The question is, why are the typical investors, the bulk of Americans in this country being PENALIZED? Picking on the little guy will introduce very little competition and variance in mutual fund results - most will simply track the indexes. There will be no losers or winners when everybody is doing the same thing and collecting management fees.
"According to Mr. Baker, the co-director of the Center for Economic and Policy Research in Washington, the fees would raise a ton of money, perhaps $100 billion or more annually"
With no numbers to back up that statement, this clearly is a total bs bill where numbers are "being pulled out of one's ass".
A "liquidity usage" tax is not the way to go. It can be looked at that the government is directly intervening in the stock market. It bleeds of corruption and manipulation when dollars are to be told to go to the mutual fund industry.
Rather, what should be done and requested by the investor groups of this country is that a REASONABLE FIXED FEE be charged to each side of a trade.
Also, it should be clearly stated what this bill is supposed to accomplish in term of HOW MUCH REVENUE is to be generated and WHAT TIMELINE.
If politicians are looking at the stock market to dip their hands into, then this is truly a bad sign in efficient markets. They want the money as soon as possible and when the goal is reached they will continue to leave this program open generation trillions of dollars in the future.
This is wrong. Its time that the American people start seeing things for what they are worth and fight back against the continual raping of the American citizens. We need less government, not more.
This article was written by Paul Krugman he is a know advocate for the Tobin Tax so please comment on this article, its an OP-ED in the NY Times. He pissed me off so I commented on it. i think I might have been the first one to comment but not sure if it will go thru, I didnt curse but was blunt so here is my comment below I posted on his site. We shall see if he or the moderators allow it on the NY TIMES.
rsikit
nc
November 26th, 2009
11:56 pm
Its funny how you actually say it wasn't the speculators but the lenders and sub prime markets that caused this crisis. That's about the only fact you had right in the article. Companies and business need capital to grow and hire and we provide that to them. We as traders, short term trades provide the liquidity for this capital. It was not us who caused this mess, it was us who came in and provided liquidity so the market would not slide any further. It was us who risk our own money. Unlike you who sit behind a desk rousing anger on main street with your misconstrued facts that actually exacerbate the crisis. Maybe we should tax journalists FOR every missed fact they print or throw some sand in the wheels of the journalists who try to deflect blame and rouse public anger just to print a story. I know I saw an article that internet ad revenue was down, and we all know how the business of print like the NY Times are doing, so maybe your trying to keep your livelihood alive by bashing others. As you quote Lord Turner talking about trading as socially useless behavior, you are sitting behind a desk giving your opinion on something you know nothing about, but yet put an article out today with info taken from many articles over the past month or so, so your opinion is not even your own work, that's about as socially useless as you can get. The transaction tax if enacted would not hurt wall street it would indeed hurt main street, it would be passed on to the end user, main street investors. If avg Joe invests his million dollar portfolio and had to re-balance the whole thing once a year regardless of making a profit or not, that tax would add another 5k in fees. So we are taxing the capital gains, the sale, and the purchase. Triple taxation. We would do much better taxing every word socially useless journalists say in these type of articles. Speculation is what made this country great. You among others are demonizing a sector not even remotely responsible for the credit crisis and thats what it was. Not a trading crisis. I agree we need to punish those involved but a tax on transaction will harm traders who had nothing to do with this, and more important main street and the avg investor. Those saving for their retirements and those who have savings accounts, they invest, and will lose out on important compounding. Buy and hold strategy is not viable anymore. We do not hold for 10 years, why? Becuase of socially useless journalist like yourself tripping over themselves to print every hint of a rumor about every company out there which in turn affects the stock and forces people to have to get out of things prematurely based on rumors you socially useless journalists blow out of proportion. So before your jump on the bandwagon of trying to kill off a career and livelihoods of people who you think need to be slowed down, take a look at what use your job means in society, nothing.
Here is the article
http://www.nytimes.com/2009/11/27/opinion/27krugman.html
rsikit
nc
November 26th, 2009
11:56 pm
Its funny how you actually say it wasn't the speculators but the lenders and sub prime markets that caused this crisis. That's about the only fact you had right in the article. Companies and business need capital to grow and hire and we provide that to them. We as traders, short term trades provide the liquidity for this capital. It was not us who caused this mess, it was us who came in and provided liquidity so the market would not slide any further. It was us who risk our own money. Unlike you who sit behind a desk rousing anger on main street with your misconstrued facts that actually exacerbate the crisis. Maybe we should tax journalists FOR every missed fact they print or throw some sand in the wheels of the journalists who try to deflect blame and rouse public anger just to print a story. I know I saw an article that internet ad revenue was down, and we all know how the business of print like the NY Times are doing, so maybe your trying to keep your livelihood alive by bashing others. As you quote Lord Turner talking about trading as socially useless behavior, you are sitting behind a desk giving your opinion on something you know nothing about, but yet put an article out today with info taken from many articles over the past month or so, so your opinion is not even your own work, that's about as socially useless as you can get. The transaction tax if enacted would not hurt wall street it would indeed hurt main street, it would be passed on to the end user, main street investors. If avg Joe invests his million dollar portfolio and had to re-balance the whole thing once a year regardless of making a profit or not, that tax would add another 5k in fees. So we are taxing the capital gains, the sale, and the purchase. Triple taxation. We would do much better taxing every word socially useless journalists say in these type of articles. Speculation is what made this country great. You among others are demonizing a sector not even remotely responsible for the credit crisis and thats what it was. Not a trading crisis. I agree we need to punish those involved but a tax on transaction will harm traders who had nothing to do with this, and more important main street and the avg investor. Those saving for their retirements and those who have savings accounts, they invest, and will lose out on important compounding. Buy and hold strategy is not viable anymore. We do not hold for 10 years, why? Becuase of socially useless journalist like yourself tripping over themselves to print every hint of a rumor about every company out there which in turn affects the stock and forces people to have to get out of things prematurely based on rumors you socially useless journalists blow out of proportion. So before your jump on the bandwagon of trying to kill off a career and livelihoods of people who you think need to be slowed down, take a look at what use your job means in society, nothing.
Here is the article
http://www.nytimes.com/2009/11/27/opinion/27krugman.html
Quote from rsikit:
So before your jump on the bandwagon of trying to kill off a career and livelihoods of people who you think need to be slowed down, take a look at what use your job means in society, nothing.
Here is the article
http://www.nytimes.com/2009/11/27/opinion/27krugman.html
Agree. This is a declaration of war, not by the power of arms but by the power of law.
Sadly but true.
It should come as no surprise that this mother fu*ker is a proponent of the transaction tax. Or for that matter that the NYTimes might be for it as well. This guy in fact wants another stimulus program.
By the way, I don't see your comment yet. I thought it was well-written, but I don't know what they approve of.
Frankly after having posting any number of responses to these things, and after having read all the articles, I think what we need to address is whether the act of trading is "socially useless". This is what I tried to address today in my post back a couple of pages ago.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=150546&perpage=6&pagenumber=428
But here it is in a nutshell. If I'm right, and the spreads widen lets say from 19.99-20.00 to 19.50-20.00, then the unintended consequence of the trader tax is that everyone who buys and sells a stock will pay an extra 5% beyond the trader tax and commission.
For example, to buy and sell 500 shares at 20 costs $50 transaction tax. But further, it will cost $.50 to buy and .$50 to sell due to the spread, an additional $500.
In other words, the consequence of the transaction tax may be 10X the amount of the tax that's sucked out of our economy every time a trade is made by another.....aside from the tax itself.
The reason for this is clear: traders play a socially useful role. As a group they compete with each other to buy that stock that is about to make a short term move they can profit from. In the effort to do this, they tighten spreads. The act of tightening spreads not only saves every investor money, but it saves money at every level of the capital function, thus making it cheaper for companies to raise capital, which create jobs, expand the economy, etc etc.
The problem with traders is that they have bought into this liberal thinking. You feel guilty because you think you're sucking off the system. And it may well be true that the motive for any particular trader when he makes a trade is to simply make money. But the fact is that the concerted action of thousands of traders at any instant, all bent on making a profit, is exactly what tightens those spreads. This is definitely socially useful. And these liberal fucks need to understand this.
Passing this legislation will be a disaster, not just because all of us will be forced out of this business by the tax. It will be a disaster because the capital function played by our markets will become more expensive at every layer.
When Google decides it needs to raise billions of dollars, it's going to cost them more, because potential investors will have to take on more risk than they would have had traders existed who were willing to tighten spread to chase a profit.
The bottom line is that IF this tax raised $100 Billion (doubtful by the way), it will COST $1 Trillion minimum in market related costs due to widening spreads. Only a liberal could make a deal like that.
This is what we have to get across. yeah, we'll all be out of business. Some of the brokers are going to go out of business. In fact, some of these ECN's/exchanges may well have to close. But the ultimate cost will be well beyond even these items.
OldTrader
EDIT: By the way, in my example above 19.50-20.00 was an example of spreads about 35 years ago. Rival Manufacturing for instance was a stock that I traded back, had a $.75 spread in fact, 19.25-20.00. Rival was an active trader who had just invented the crock pot back then.
By the way, I don't see your comment yet. I thought it was well-written, but I don't know what they approve of.
Frankly after having posting any number of responses to these things, and after having read all the articles, I think what we need to address is whether the act of trading is "socially useless". This is what I tried to address today in my post back a couple of pages ago.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=150546&perpage=6&pagenumber=428
But here it is in a nutshell. If I'm right, and the spreads widen lets say from 19.99-20.00 to 19.50-20.00, then the unintended consequence of the trader tax is that everyone who buys and sells a stock will pay an extra 5% beyond the trader tax and commission.
For example, to buy and sell 500 shares at 20 costs $50 transaction tax. But further, it will cost $.50 to buy and .$50 to sell due to the spread, an additional $500.
In other words, the consequence of the transaction tax may be 10X the amount of the tax that's sucked out of our economy every time a trade is made by another.....aside from the tax itself.
The reason for this is clear: traders play a socially useful role. As a group they compete with each other to buy that stock that is about to make a short term move they can profit from. In the effort to do this, they tighten spreads. The act of tightening spreads not only saves every investor money, but it saves money at every level of the capital function, thus making it cheaper for companies to raise capital, which create jobs, expand the economy, etc etc.
The problem with traders is that they have bought into this liberal thinking. You feel guilty because you think you're sucking off the system. And it may well be true that the motive for any particular trader when he makes a trade is to simply make money. But the fact is that the concerted action of thousands of traders at any instant, all bent on making a profit, is exactly what tightens those spreads. This is definitely socially useful. And these liberal fucks need to understand this.
Passing this legislation will be a disaster, not just because all of us will be forced out of this business by the tax. It will be a disaster because the capital function played by our markets will become more expensive at every layer.
When Google decides it needs to raise billions of dollars, it's going to cost them more, because potential investors will have to take on more risk than they would have had traders existed who were willing to tighten spread to chase a profit.
The bottom line is that IF this tax raised $100 Billion (doubtful by the way), it will COST $1 Trillion minimum in market related costs due to widening spreads. Only a liberal could make a deal like that.
This is what we have to get across. yeah, we'll all be out of business. Some of the brokers are going to go out of business. In fact, some of these ECN's/exchanges may well have to close. But the ultimate cost will be well beyond even these items.
OldTrader
EDIT: By the way, in my example above 19.50-20.00 was an example of spreads about 35 years ago. Rival Manufacturing for instance was a stock that I traded back, had a $.75 spread in fact, 19.25-20.00. Rival was an active trader who had just invented the crock pot back then.
Quote from rsikit:
This article was written by Paul Krugman he is a know advocate for the Tobin Tax so please comment on this article, its an OP-ED in the NY Times. He pissed me off so I commented on it. i think I might have been the first one to comment but not sure if it will go thru, I didnt curse but was blunt so here is my comment below I posted on his site. We shall see if he or the moderators allow it on the NY TIMES.
rsikit
nc
November 26th, 2009
11:56 pm
Its funny how you actually say it wasn't the speculators but the lenders and sub prime markets that caused this crisis. That's about the only fact you had right in the article. Companies and business need capital to grow and hire and we provide that to them. We as traders, short term trades provide the liquidity for this capital. It was not us who caused this mess, it was us who came in and provided liquidity so the market would not slide any further. It was us who risk our own money. Unlike you who sit behind a desk rousing anger on main street with your misconstrued facts that actually exacerbate the crisis. Maybe we should tax journalists FOR every missed fact they print or throw some sand in the wheels of the journalists who try to deflect blame and rouse public anger just to print a story. I know I saw an article that internet ad revenue was down, and we all know how the business of print like the NY Times are doing, so maybe your trying to keep your livelihood alive by bashing others. As you quote Lord Turner talking about trading as socially useless behavior, you are sitting behind a desk giving your opinion on something you know nothing about, but yet put an article out today with info taken from many articles over the past month or so, so your opinion is not even your own work, that's about as socially useless as you can get. The transaction tax if enacted would not hurt wall street it would indeed hurt main street, it would be passed on to the end user, main street investors. If avg Joe invests his million dollar portfolio and had to re-balance the whole thing once a year regardless of making a profit or not, that tax would add another 5k in fees. So we are taxing the capital gains, the sale, and the purchase. Triple taxation. We would do much better taxing every word socially useless journalists say in these type of articles. Speculation is what made this country great. You among others are demonizing a sector not even remotely responsible for the credit crisis and thats what it was. Not a trading crisis. I agree we need to punish those involved but a tax on transaction will harm traders who had nothing to do with this, and more important main street and the avg investor. Those saving for their retirements and those who have savings accounts, they invest, and will lose out on important compounding. Buy and hold strategy is not viable anymore. We do not hold for 10 years, why? Becuase of socially useless journalist like yourself tripping over themselves to print every hint of a rumor about every company out there which in turn affects the stock and forces people to have to get out of things prematurely based on rumors you socially useless journalists blow out of proportion. So before your jump on the bandwagon of trying to kill off a career and livelihoods of people who you think need to be slowed down, take a look at what use your job means in society, nothing.
Here is the article
http://www.nytimes.com/2009/11/27/opinion/27krugman.html
Comment section is being moderated. Anyone care to guess which comments will be posted and which ones won't?
If you read up on Krugman, he has won many awards he is liberal , an economist, all that junk. He is an esteemed member of society some say. But there are also alot of criticisms of him as well, and one glaring one was shaping a story for his benefit of his opinion regardles of what they facts say, and plenty of people actually said he distorts facts as well for his own gain! We need to send him, Defazio, Dean Baker , and Bakers institute to France, where they can let their inner socialists fly!
An article today in the Star Ledger (a New Jersey statewide newspaper):
N.J. budget deficit grows to $1B for current fiscal yearBy Lisa Fleisher/Statehouse Bureau
The state today said it is facing a $1 billion hole in this yearâs budget â a shortfall five times bigger than previously disclosed â and will cut funding for schools, municipalities, higher education, hospitals and pension plans to help close the gap.
A Treasury spokesman said the state collected $412 million less in taxes than expected through October.
âIt is going to be a gut-wrenching experience,â said Bill Dressel, executive director of the New Jersey League of Municipalities.
The crunch has already led to a disagreement with Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
That revelation is the latest budget problem facing New Jersey as it grapples with fallout from the deepest economic downturn since the Great Depression. Two days after he lost the election, Gov. Jon Corzine said the state needed to find $400 million in savings to cover shortfalls that included $190 million in anticipated taxes that did not materialize.
In addition, the state already will start off next fiscal yearâs budgeting process with an $8 billion hole, according to a report from a nonpartisan legislative office.
The depth of the stateâs current $1 billion shortfall was not revealed until today, when it was included in a required statement sent to Wall Street bond investors. It means officials now have to tell people who were expecting money they will not be getting it.
âIt is going to be a gut-wrenching experience,â said Bill Dressel, executive director of the New Jersey League of Municipalities.
It is the second straight year the state has been forced to make mid-year budget adjustments to deal with revenue shortfalls in the billions.
This yearâs money problems have already led to a disagreement between Corzine and Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
A spokesman for Corzine said today the governor still wants to seek help for hungry and needy residents.
âDuring these tough national economic times, many families are struggling to put food on the table and heat their homes,â spokesman Robert Corrales said in a statement.
Corrales directed any questions about the budget deficit to the Department of Treasury.
Through October, the state took in $412 million less than expected in income, sales and, most notably, corporate business taxes, according to a report the state treasurer released today.
That has left New Jersey, like many other states, scrambling to figure out where to cut, with more than half the budget year left. The stateâs fiscal year runs from July 1 to June 30.
âItâs gotten to the point, all over the country, where states are making budget cuts to the magnitude that more than inconvenience people,â said Jon Shure, deputy director of the nonprofit Center on Budget and Policy Priorities. âThe tragic irony in this is that peopleâs needs rise at the very same time that the stateâs ability to meet those needs is falling.â
The state has already taken steps to close the gap, including $200 million in savings that have been identified, Treasury spokesman Tom Vincz said. Earlier this month, Corzine asked his departments to deliver $400 million in cuts by Tuesday.
State officials also expect to receive $60 million from new Powerball revenue and taxes from recovered offshore bank accounts, and make up the rest with âup to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans,â according to the bond prospectus.
The dire state of the current budget was tucked onto the bottom of page 51 of a report sent today to Wall Street bond investors for a $29 million bond issue through the New Jersey Building Authority.
The timing of the release â the day before Thanksgiving â did not escape those who will be affected.
âVery often, when news like this comes out late in the afternoon before a holiday, itâs not good,â said Frank Belluscio, spokesman for the New Jersey School Boards Association.
Besides the lagging tax collections, the state revealed to investors it started the year with $244 million less than expected and said there is a âneedâ for $350 million in additional spending.
Senate Budget Committee Chairwoman Barbara Buono (D-Middlesex) said the numbers should serve as a wake-up call to those considering any additional spending â including some lawmakers who want to pass lame-duck legislation with up-front costs that would result in savings in the long run.
âAt this point we have to be concerned with the present, and at the present we have to have a balanced budget,â Buono said. âWhether or not to spend is no longer a choice.â
The prospect of losing funds they had already counted on left many state-aid recipients wondering where else they can give.
Municipalities would have to pare services such as police and fire to deal with cuts, dip into savings or borrow emergency funds, Dressel said.
And with school budgets set in the spring, it was unclear how the districts would handle what could be unprecedented actions, Belluscio said.
Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association, said nine hospitals have closed and six have filed for bankruptcy since 2007. Hospitals rely heavily on Medicaid and state-funded charity care.
âIt is quite frightening to see what could happen if that support is cut further,â she said. âWhen you look at that dismal track record and you consider additional cuts, the impact on hospitals and potentially their patients and communities could be devastating.â
The cuts could have a ripple effect in places such as higher education, where further reductions could make the state ineligible for federal stimulus funds, which require a certain level of state contribution, said Paul Shelly, a spokesman for the New Jersey Association of State Colleges and Universities.
A spokeswoman for Christie said today that the shortfall was not unexpected.
âAll along we have expected that New Jerseyâs fiscal situation was going to be much worse than originally anticipated,â spokeswoman Maria Comella said. âThe governor-elect and the transition team will continue to work with the Corzine administration to freeze state spending and to find additional cuts where possible.â
Since a significant portion of these "useless" workers live outside the 5 boros in more traditional middle-class communities, a tax that would trim the already thin employment rolls would have a domino effect on the local communities that are supported by these media-identified undesirables, as is already starting to be played out in NJ as well as in NY state, where state politicians are already having a hard time closing a hole in the state budget caused by a decline in tax revenue from the financial sector. Writing a response to a liberal bastion like the NYTimes (where they treat their Pulitzer Prize winning journalists like deities) is another useless endeavor as they will not publish an opinion contrary to the gods. Rather, write your local and the national representatives and explain how this punishes everyone, not just us useless miscreants. Self-interest can be a very powerful force when your livelihood is threatened, as it would affect our spendaholic politicians from their daily routine as it would evaporate in these local communities. Get your family to write them too.
N.J. budget deficit grows to $1B for current fiscal yearBy Lisa Fleisher/Statehouse Bureau
The state today said it is facing a $1 billion hole in this yearâs budget â a shortfall five times bigger than previously disclosed â and will cut funding for schools, municipalities, higher education, hospitals and pension plans to help close the gap.
A Treasury spokesman said the state collected $412 million less in taxes than expected through October.
âIt is going to be a gut-wrenching experience,â said Bill Dressel, executive director of the New Jersey League of Municipalities.
The crunch has already led to a disagreement with Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
That revelation is the latest budget problem facing New Jersey as it grapples with fallout from the deepest economic downturn since the Great Depression. Two days after he lost the election, Gov. Jon Corzine said the state needed to find $400 million in savings to cover shortfalls that included $190 million in anticipated taxes that did not materialize.
In addition, the state already will start off next fiscal yearâs budgeting process with an $8 billion hole, according to a report from a nonpartisan legislative office.
The depth of the stateâs current $1 billion shortfall was not revealed until today, when it was included in a required statement sent to Wall Street bond investors. It means officials now have to tell people who were expecting money they will not be getting it.
âIt is going to be a gut-wrenching experience,â said Bill Dressel, executive director of the New Jersey League of Municipalities.
It is the second straight year the state has been forced to make mid-year budget adjustments to deal with revenue shortfalls in the billions.
This yearâs money problems have already led to a disagreement between Corzine and Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
A spokesman for Corzine said today the governor still wants to seek help for hungry and needy residents.
âDuring these tough national economic times, many families are struggling to put food on the table and heat their homes,â spokesman Robert Corrales said in a statement.
Corrales directed any questions about the budget deficit to the Department of Treasury.
Through October, the state took in $412 million less than expected in income, sales and, most notably, corporate business taxes, according to a report the state treasurer released today.
That has left New Jersey, like many other states, scrambling to figure out where to cut, with more than half the budget year left. The stateâs fiscal year runs from July 1 to June 30.
âItâs gotten to the point, all over the country, where states are making budget cuts to the magnitude that more than inconvenience people,â said Jon Shure, deputy director of the nonprofit Center on Budget and Policy Priorities. âThe tragic irony in this is that peopleâs needs rise at the very same time that the stateâs ability to meet those needs is falling.â
The state has already taken steps to close the gap, including $200 million in savings that have been identified, Treasury spokesman Tom Vincz said. Earlier this month, Corzine asked his departments to deliver $400 million in cuts by Tuesday.
State officials also expect to receive $60 million from new Powerball revenue and taxes from recovered offshore bank accounts, and make up the rest with âup to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans,â according to the bond prospectus.
The dire state of the current budget was tucked onto the bottom of page 51 of a report sent today to Wall Street bond investors for a $29 million bond issue through the New Jersey Building Authority.
The timing of the release â the day before Thanksgiving â did not escape those who will be affected.
âVery often, when news like this comes out late in the afternoon before a holiday, itâs not good,â said Frank Belluscio, spokesman for the New Jersey School Boards Association.
Besides the lagging tax collections, the state revealed to investors it started the year with $244 million less than expected and said there is a âneedâ for $350 million in additional spending.
Senate Budget Committee Chairwoman Barbara Buono (D-Middlesex) said the numbers should serve as a wake-up call to those considering any additional spending â including some lawmakers who want to pass lame-duck legislation with up-front costs that would result in savings in the long run.
âAt this point we have to be concerned with the present, and at the present we have to have a balanced budget,â Buono said. âWhether or not to spend is no longer a choice.â
The prospect of losing funds they had already counted on left many state-aid recipients wondering where else they can give.
Municipalities would have to pare services such as police and fire to deal with cuts, dip into savings or borrow emergency funds, Dressel said.
And with school budgets set in the spring, it was unclear how the districts would handle what could be unprecedented actions, Belluscio said.
Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association, said nine hospitals have closed and six have filed for bankruptcy since 2007. Hospitals rely heavily on Medicaid and state-funded charity care.
âIt is quite frightening to see what could happen if that support is cut further,â she said. âWhen you look at that dismal track record and you consider additional cuts, the impact on hospitals and potentially their patients and communities could be devastating.â
The cuts could have a ripple effect in places such as higher education, where further reductions could make the state ineligible for federal stimulus funds, which require a certain level of state contribution, said Paul Shelly, a spokesman for the New Jersey Association of State Colleges and Universities.
A spokeswoman for Christie said today that the shortfall was not unexpected.
âAll along we have expected that New Jerseyâs fiscal situation was going to be much worse than originally anticipated,â spokeswoman Maria Comella said. âThe governor-elect and the transition team will continue to work with the Corzine administration to freeze state spending and to find additional cuts where possible.â
Since a significant portion of these "useless" workers live outside the 5 boros in more traditional middle-class communities, a tax that would trim the already thin employment rolls would have a domino effect on the local communities that are supported by these media-identified undesirables, as is already starting to be played out in NJ as well as in NY state, where state politicians are already having a hard time closing a hole in the state budget caused by a decline in tax revenue from the financial sector. Writing a response to a liberal bastion like the NYTimes (where they treat their Pulitzer Prize winning journalists like deities) is another useless endeavor as they will not publish an opinion contrary to the gods. Rather, write your local and the national representatives and explain how this punishes everyone, not just us useless miscreants. Self-interest can be a very powerful force when your livelihood is threatened, as it would affect our spendaholic politicians from their daily routine as it would evaporate in these local communities. Get your family to write them too.