It’s the spending and the income tax, stupid

The New Jersey state budget is in perpetual crisis.  Every year the governor and the legislature engage in the June 30th soap opera:  Will a budget be in place by the June 30th deadline?  Or, will there be a state shutdown because the legislature failed to pass a budget in time for the upcoming fiscal year? 

As the budget vote in the Legislature nears, Governor Christie may be facing a mini revolt from members of his own party.  Republicans Allison Littell McHose and Michael Patrick Carroll in the Assembly and Senator Michael Doherty are complaining that their districts will be hit hard by property tax hikes, because the Governor’s budget substantially reduces aid to suburban communities.  If not enough Democrats vote for the budget and the three Republicans stick to their guns and refuse to vote for the budget, there may not be enough votes to pass the budget by the June 30th deadline.  

New Jersey’s budget crises have been building like a volcano since 1976 when the Supreme Court ordered the passage of an income tax to pay for additional school aid for low income urban districts.  In other words, the income tax, which was supposed to be used to offset New Jersey’s notorious high property taxes and provide aid to urban school districts, has become a Trojan horse.  Instead of providing relief to all communities, the income tax has become a redistributionist’s delight, taxing suburban homeowners to help fund school spending in the state’s special needs districts, formerly called the Abbott districts. 

The bottom line is that the state budget is now in perpetual crisis because of the income tax and the unsustainable spending in cities and towns around the state.  The only way to end the annual Kabuki dance between the governor’s office and the legislature is to restructure government up and down the state. 

The first reform that must be enacted is to abolish the state income tax so families and individuals will have the resources to pay for the services they want in their local communities.   Local residents would determine how large or small the police force should be and how much to pay for law enforcement officers.  State arbitration must end so local officials would not have their hands’ tied in salary negotiations.  

Second, the public schools must be depoliticized.  Education is too important to be left to the vagaries of state government and the state Supreme Court.  Teachers, administrators and parents should run the schools as nonprofit institutions funded by tuition, fees, endowment income, grants, etc.  Real school choice would occur under this structure.  Schools would be “diverse,” parents would choose a school based on the curriculum and the quality of teaching at the institution, just as students and parents choose a college or university.   

As far as the urban school districts are concerned, they would no longer receive any state funds to pay for their schools, which would be phased out over four to five years.  Urban schools have to rely on their own resources and ingenuity to educate their kids.  Donations from suburban taxpayers who claim that outside aid is needed in these districts should be forthcoming.  If the aid does not come voluntarily from these taxpayers, then they are hypocrites.  The best indicator of an individual’s values is the old saying, “putting one’s money where one’s mouth is.” 

And lastly, there should be “rational” consolidation of the 566 towns and municipalities in the state.  Overcoming the obvious objections should be discussed and debated as soon as possible.  We have met the enemy and it is clear:  too much government is undermining prosperity in New Jersey and in the nation.   It is time for limited government. 

 

It’s the spending and the income tax, stupid