Thousands of people may lose their jobs in a seaside resort town in New Jersey, thanks to a Democratic governor’s insistence on raising taxes. But CBS News left out the role tax hikes and wasteful spending played in its recent “Evening News” story.

“Today, with the state government shut down by a budget dispute,” state gambling inspectors were unable to work, substitute anchor Harry Smith noted. That caused Atlantic City casinos to shut down gaming operations.

Correspondent Sharyn Alfonsi told viewers of the July 5 program what was at stake due to the budget showdown. All told, said Alfonsi, the casinos will lose “upwards of $16 million a day” while the state loses more than $1 million in tax revenue and “more than 60,000 people are out of work until legislators can agree on a budget.”

Yet Alfonsi left out the major sticking point in the budget battle: Democratic Gov. Jon Corzine’s plan to raise the sales tax to 7 percent from the current 6 percent.

The omission is hardly minor, considering New Jersey is already among the most-taxed states in the Union. Among its findings on the Garden State, the Washington, D.C.-based Tax Foundation reported that New Jersey residents:

* Pay on average the 16th-highest individual income tax rates
* Pay the highest per capita property tax in the nation
* Already pay above the national median in sales taxes

Even with its heavy taxes, New Jersey has grown its government far faster than its tax revenue. In a May 22 issue brief, the National Taxpayers Union's Sam Batkins criticized Corzine for proposing “a 9.2 percent budget increase, along with $1.8 billion in additional revenue” from tax increases. By contrast, Batkins noted, from 1994 to 2004 the state averaged budget increases of only 5.2 percent per year.

Also missing from Alfonsi’s report: the casino shutdown and the resulting threat to Atlantic City’s economy were avoidable.

In a July 5 press release, Americans for Tax Reform (ATR) argued that even if they ultimately agreed to more than $1.5 billion in new taxes, “legislators and the governor could have approved a budget which funds the government at fiscal year 2006 levels as a temporary stop-gap.”

[cross-posted to BusinessandMedia.org]

UPDATE: Alfonsi did mention the tax hike proposal in a story on CBS's "Early Show" on July 6, but tacked it on to the end of her story. She failed to go in depth about New Jersey's high tax burden.