Jersey Tax Hikes Prompt Backlash

A TAXPAYER revolt is brewing in this mostly suburban state as angry residents fight the largest tax increase in New Jersey history. In supermarkets, bowling alleys, and beauty parlors, taxpayers are signing petitions demanding a rollback of Gov. James Florio's (D) tax initiative - a $2.8 billion increase in sales and income taxes that took effect last month.

The petitions also call on the governor and the Legislature to develop a mechanism that would allow voters to recall them from office.

Currently, New Jersey has no provision for legislators or the governor to be recalled.

Grass-roots activists have gathered more than 760,000 signatures for a statewide petition in the last eight weeks. Their goal is to obtain the 1.5 million signatures from New Jersey's 4 million voters by Sept. 23, the day the antitax group Hands Across New Jersey will hold a rally in Trenton, the state capital.

``We're not going to have any problem reaching our goal,'' says postman John Budzash, co-founder of Hands Across New Jersey. ``People are really angry about the tax increase.''

New Jersey's tax revolt is only one of many battles over tax hikes raging in states across the country. Rooted in California's property tax revolt in 1978, which led to Proposition 13, the latest wave of protests over revenue increases has also hit Oregon, Colorado, Michigan, Nebraska, Oklahoma, Massachusetts, and Texas. The governor's rebuttal

The grass-roots petition drive has clearly put Governor Florio on the defensive. In a televised address last Wednesday, the first of its kind by a New Jersey governor, he challenged the accusation that he broke his campaign pledge to avoid a tax increase.

In his address, Florio blamed his predecessor, Republican Gov. Thomas Kean, for the shortfall.

Mr. Kean said several days before last November's election that he expected to leave his successor with a budget surplus of $247 million. But by this spring, Florio said, the budget surplus had changed to a $600 million deficit.

``Unreal revenue estimates done by folks wearing rose-colored glasses'' in the Kean administration ``left us with with a $3 million gap to close,'' Florio snapped.

Kean maintains an unforeseen economic slump caused the budget deficit.

The governor's address seemed to do little to change the minds of his detractors. The next day, he was out pumping hands at Fred and Pete's diner in Hamilton Township.

A few diners cheered when Florio arrived, but they were drowned by hecklers. ``You're a phony, a fake, and a fraud,'' shouted Jerry Conners of Hamilton.

``Nice to see everyone,'' Florio responded.

The $2.8 billion tax hike Florio pushed through the Legislature in late June raises New Jersey's sales tax from 6 to 7 percent. The plan also doubles taxes from 3.5 to 7 percent for individuals earning more than $75,000 and couples earning more than $150,000.

Individuals earning more than $35,000 and couples earning more than $70,000 will also see their income taxes rise on a sliding scale, depending on income.

State school aid will shift from richer to poorer school districts and homeowners who spend more than 5 percent of their income on property taxes should see a property-tax rebate of $500.

Florio maintains that the income tax increases will affect only 17 percent of taxpayers.

But his campaign to explain himself seems to be working in favor of antitax forces. ``People are just getting madder,'' Mr. Budzash says. ``They don't believe a word he says.'' `Enough is enough'

At the Premier Hairdressers in the Mercer Mall in Lawrenceville, patrons such as Maureen Hart have added their names to the petitions.

``It's simply too expensive to live in New Jersey anymore,'' says Ms. Hart, a computer instructor. ``Our property taxes keep going up, our automobile insurance rates are among the highest in the nation, and now we have to pay higher income taxes. Enough is enough.''

At Trenton talk-radio station WKXW-FM, whose 50,000-watt signal reaches most of the state, the calls continue to center on Florio bashing.

``We try to switch the topic away from the tax issue, but that's all callers seem to want to talk about,'' says afternoon host Ken Chiampou. ``This tax increase has hit a raw nerve.''

The tax revolt was born on the station on a mid-June afternoon, when Mr. Chiampou and afternoon partner John Koblyt invited listeners to call in to complain about the new taxes.

Budzash called in and invited listeners who were as upset as he was to call him.

The message reached Pat Ralston, a title searcher and homeowner from Belmar, N.J.

The two talked privately on the phone and then called the station to announce the formation of Hands Across New Jersey.

Budzash says the organization has spread from its two founders to 1,000 volunteers circulating petitions and that residents signing petitions are in a similar situation.

``My property taxes alone have gone up from $2,800 to $4,300 in the last 18 months,'' Budzash says. ``I'm mortgaged to the hilt. Now I am supposed to pay an income-tax increase. Where is all this tax money supposed to come from?''

Budzash concedes that Florio did not create the budget gap, but thinks the governor should have cut state spending and patronage jobs to solve the problem.

``It's absolutely ridiculous what's going on,'' he says. ``State legislators are having catered lunches delivered to them daily when they are in session. The legislators spent $7,200 so they could have gold badges to wear. These things go on and on.''

Alan Rosenthal, director of the Eagleton Institute of Politics at Rutgers University, says Florio is going to have hard time swaying the public to his side.

``If the New Jersey economy improves and people make more money they may be willing to forget the tax increases,'' Mr. Rosenthal says. ``But if the state economy continues in its slump, Florio will stay in trouble. People will be reminded of their economic woes, and they will blame it on Florio.''

One thing is certain: Democrats across the country are watching.

Analysts say that if Florio succeeds, the Democrats may have found a strategy that could help strengthen their battle for the White House in 1992.