Oct. 14 (Bloomberg) -- Republicans in New Jersey want the state to enact a five-week sales-tax holiday to boost consumer spending during the busiest retail season, a plan Governor Jon Corzine said he won't support.

``Removing five to six weeks of revenue will not help people get through this financial storm,'' Robert Corrales, a spokesman for Corzine, said in an e-mail. ``They are focused on keeping their jobs and homes right now, not their holiday shopping.''

The proposal would cut the state's 7 percent sales tax in half from Nov. 27 to Jan. 4, Assembly Minority Leader Alex DeCroce said in an interview. The program would cost the state as much as $500 million, which would be recouped through increased economic activity and budget cuts, DeCroce said.

``It will protect businesses, it will protect peoples' jobs and it will protect the economy,'' said DeCroce, a Parsippany Republican. ``It's going to be a devastating season based on the fact that the economy is so sour. We thought this might be a good opportunity to generate strong seasonal sales and keep people working.''

The governor, a first-term Democrat, is scheduled to address a joint session of the Legislature on Oct. 16 and outline his own proposal for helping the state cope with the U.S. economic crisis. Corzine has said more state budget cuts may be needed because of the slumping economy.

Roads, Schools

Corzine, 61, former chairman of Goldman, Sachs & Co., has called for more spending on roads and schools to create jobs.

New Jersey's unemployment rate in August hit a five-year high of 5.9 percent, below the national rate, which also reached a five-year high at 6.1 percent. The U.S. rate held in September, as the credit crisis forced employers across the country to cut workers and spending.

Holiday sales this year will climb 1.5 percent, the smallest increase in 17 years, retail consultants TNS Retail Forward forecast on Sept. 17. U.S. consumer spending will probably drop at a 0.9 percent annual pace in the fourth quarter, after falling 2 percent in the previous quarter, according to a Bloomberg survey of 52 economists. Purchases had been growing since 1992.

The New Jersey Republicans' proposed sales-tax holiday would last longer than programs in other states and affect all items subject to the levy.

Backpacks, Appliances

Sixteen U.S. states and Washington, D.C., have sales-tax holidays this year, ranging from two to 17 days, according to a listing by the Federation of Tax Administrators. Washington's 17- day program, from Nov. 21 to Dec. 7, gives consumers exemptions from its 5.75 percent tax for clothes, shoes and accessories costing $100 or less.

Washington, as well as Alabama, Georgia, Missouri, New Mexico, North Carolina, South Carolina, Tennessee, Texas and Virginia, gave tax breaks earlier this year for school supplies. Georgia, Texas, Vermont, Virginia and West Virginia offered three- to four-day exemptions for energy-efficient appliances. Louisiana, battered by Hurricane Katrina in 2005, has an annual tax holiday on sales of hurricane-preparedness items such as portable generators.

``It's generally been more focused,'' Scott Pattison, executive director of the National Association of State Budget Officers, said of tax holidays in other states.

Oct. 16

DeCroce said the lower tax period would lure holiday shoppers from neighboring New York and Pennsylvania. He said his party plans to introduce legislation to authorize the sales-tax holiday on Oct. 16.

Corzine's $33 billion state budget for the fiscal year that began July 1 reduced spending by $600 million, the largest year- over-year reduction in state history, to cope with an expected drop in tax collections. The plan cut thousands of state jobs and aid to towns and hospitals.

The governor has directed state department heads to prepare to trim their budgets by 5 percent if revenue for the fiscal year falls short. He said on Sept. 29 that while he hasn't ordered any cuts yet, they may become necessary in light of the economic slowdown.

Corzine also asked the Legislature not to pass any bills that entail spending increases unless they are one-time ``economic stimulus packages,'' and he told the state's highway authority to scale back a plan for toll increases to ``minimize the burden'' on consumers. The authority on Oct. 10 approved a revised plan that will more than double tolls over four years.

Democratic lawmakers in New Jersey are sponsoring legislation aimed at preventing foreclosures, helping people pay utility bills and easing taxes on small businesses. Democrats control both legislative houses.

To contact the reporter on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net.

Last Updated: October 14, 2008 14:48 EDT