CORZINE AND THE UNAFFORDABILITY AGENDA

by David P. Rebovich Doug Forrester ran a desperate one that featured an uncomplimentary quote from the former Mrs. Jon Corzine about her ex-husband’s character. Corzine had a highly emotional one in which a quadriplegic declared that Forrester doesn’t care about people like him. Loyalists in both campaigns, along with many editors, reporters, and average citizens, rated these as the two worst ads in the governor’s race. But just a few weeks after the most expensive gubernatorial campaigns in the state’s history, and the one with the lowest voter turnout, it seems that the worst ads were actually the positive ones run by both camps. Those were the ones in which Forrester and Corzine confidently promised to provide New Jerseyans with significant property tax relief. Forrester guaranteed a thirty percent reduction in property tax bills in three years, and Corzine pledged to increase rebate checks by forty percent in four years after restoring those checks to their generous 2004 levels. And let’s not forget that the Governor-elect also touted, more on the stump than on the airwaves, his “affordability agenda.” Besides giving residents more property tax relief, Corzine claimed that as governor he would make inexpensive health insurance available to more New Jerseyans, encourage the construction of 100,000 housing units for low and moderate income residents, and make more financial aid available to college students to take the bite out of higher tuition costs. Now, after all the votes have been cast and counted, the Governor-elect’s agenda seems unaffordable, at least for the foreseeable future. Corzine admitted as much when he spoke briefly at the New Jersey State League of Municipalities convention in Atlantic City eight days after the election. He decided to mention a topic that was taboo during the campaign but that can no longer be avoided. That’s the projected deficit in next year’s state budget. He sheepishly asked the local government officials, “Anybody win $5 billion last night at the table? We could use it.” What New Jerseyans could have used during the campaign were fewer promises about tax relief and new programs and more candor about the state’s ongoing fiscal crisis. Especially from two multimillionaire businessmen who each claimed that they would use their considerable experience and expertise in business to put the state finances in order. One would think that such experience and expertise, as well plain old common sense, would have suggested to Corzine and Forrester to consult Acting Governor Dick Codey or state Treasurer John McCormac about New Jersey’s revenue picture and spending obligations and pressures. What would these officials have said? Codey may well have reminded the men who wanted to succeed him that he originally recommended that rebates for non-seniors be rescinded this year and seniors have their checks cut in half. That prudent proposal was deemed political suicide by Codey’s fellow Democrats in the legislature, and by many Republicans as well, especially assemblymen who were running for reelection this fall. Codey and McCormac both would have also told Corzine and Forrester not to forget that the next governor would have to find billions of dollars next year for the Transportation Trust Fund, the government workers pension system, and the school construction corporation. Then there are the normal inflationary pressures and contractual obligations that cannot be avoided. None of this was discussed in any detail in the campaign. Instead, both Corzine and Forrester rambled on about ethics reform and property tax reform and how they would find funds for the latter by identifying waste and abuse at all levels of government. A running question throughout the campaign was exactly how much money can be saved thusly. In fact, most New Jerseyans did not believe that either candidate could deliver on their property tax relief promises because they never detailed what they would cut to pay for their plans. To Corzine’s credit, this fall he did frequently state that he planned to “grow” the state’s economy to generate more revenue for his property tax relief plan and his “affordability agenda.” But an experienced investment executive like Corzine surely knows that growing the economy takes time and that New Jersey isn’t the only state looking to attract businesses. In the meantime, many firms already here are bemoaning the “climate for business” in the state. According to Phil Kirschner, President of the New Jersey Business and Industry Association, there is “a stunning loss of confidence in the near-term economic outlook…Many employers anticipate a slowdown.” The biggest complaints, according to the NJBIA’s recent annual survey of members, are high health care costs, high state and local taxes and fees, and unchecked government spending. These concerns will make Corzine’s efforts to grow the state’s economy, never an easy task, especially difficult. But to make matters more challenging, Corzine will have to figure out how to reconcile his commitment to economic growth with his desire to shift the tax burden in New Jersey from low, moderate and middle-income property taxpayers to those who can afford to pay higher taxes. The Governor-elect supports not just an increase in property tax rebate checks but also a constitutional convention on property tax reform that will make the state and local revenue-raising structure more progressive. Progressive taxation is, of course, an established principle and value in American society. But to the high-tech, high-finance, high salary firms that Corzine would like to attract to New Jersey, it may seem that he wants them to locate here so he can increase taxes on their workers, if not on the companies themselves. Will the threat of higher taxes discourage investment in New Jersey by companies who, after all, do have other options? Corzine has some work to do on this question. While he took pleasure during the campaign in talking about how he and his party stand for the “right values” – a shot at the conservatives in the Bush Administration and the national Republican Party -, he avoided discussing the pain that will likely be required in order to realize those values. The result is that many of Corzine’s new constituents may be expecting property tax relief and increased support for preferred programs with somebody else footing the bill. If that’s the case, the new Governor will need well-to-do New Jerseyans to remain here and other high wage workers to relocate to the state to help pay for his agenda. That’s because while most members of the Democratic coalition may share the “values” of an activist government that provides opportunity and benefits to all, they don’t necessarily want to pay a lick for those “values.” Just ask former Governor Jim Florio. If Corzine expects anyone to be willing to chip in, he needs to demonstrate a genuine commitment to making government more efficient and cutting programs that don’t work. He has already said he will dramatically decrease the number of patronage positions in state government. And, his transition team staff has insisted that the new Governor wants his Administration run by people committed to ethics and public service, not self-aggrandizement. Given public opinion, his ambitious policy goals, and the fiscal condition of the state, Corzine can’t afford anything less. David P. Rebovich, Ph.D., is Managing Director of the Rider University Institute for New Jersey Politics (www.rider.edu/institute). He also writes a regular column, “On Politics,” for NEW EJRSEY LAWYER.

CORZINE AND THE UNAFFORDABILITY AGENDA