CORZINE STUMPS FOR HIS BUDGET AND A BETTER FUTURE

by David P. Rebovich During the campaign he made some promises that now he cannot keep. He also had reassured many of his party’s key constituent groups that he would champion their causes in the State House. But today these Democrats realize that like most New Jerseyans, they will have to share in the sacrifice that the new Governor is calling for. That sacrifice entails tax hikes, program cuts and freezes in state aid, none of which help a politician’s popularity. And to justify these unpopular policies, the Governor is making an argument that is hard to sell to citizens who want program support and tax relief immediately. His argument is that tough choices are inescapable and necessary if the state and its residents are to have a better future. This is the situation that Jon Corzine finds himself in after a little over four months in office. Despite declining poll numbers, disaffection among fellow Democrats, and continued criticism from emboldened Republicans, the Governor is pressing forward. He has been making the rounds to further explain his budget proposal and the long-term fiscal strategy on which it rests. In the process he is demonstrating that his Administration is accessible to average citizens and that he is a candid, personable leader who is eager to engage the public in discussions about their concerns and his priorities and policies. This is the Jon Corzine that some one-hundred and fifteen residents met at a town meeting last Thursday at Hamilton Township’s Senior Citizens Center. A sprawling middle and working class suburb of Trenton and home to thousands of state government workers, Hamilton nonetheless has a well-deserved reputation as a “swing” town. Last November it gave Doug Forrester a small plurality, in part due to the reverse coattails provided by popular GOP Assemblyman Bill Baroni, who carried the Township by 6,000 votes, and a Republican sweep of three local council races. At the Hamilton town meeting, the Governor faced a polite and politically sophisticated audience that had some hard questions about various aspects of the budget and other policy issues. But Corzine set a positive tone for the meeting and presented a framework for understanding the state’s fiscal condition, the reasons he could not satisfy some of his campaign promises, and his specific recommendations for balancing the budget during these tough times. Energetic, intent, and friendly, the Governor began the town meeting by reminding folks that the state has serious fiscal challenges, that there are no easy solutions, and that difficult choices have to be made. He admitted that he had to renege on his campaign promises to restore rebate checks to their 2004 levels and then increase them by 10 percent and to make a full contribution to the government workers pension fund. This is because when he entered office in January, he was confronted with a $4 billion budget shortfall and the task of getting the state out of its long-running fiscal mess. The options for dealing with the shortfall in next year’s budget and the state’s long-term problems are not appealing and, Corzine quipped, certainly not what any elected official would voluntarily choose to do. What the Governor did end up recommending are over $2 million in “spending avoidance” and cuts, including flat funding for school districts and towns and big reductions in aid for higher education. And, he rejected revenue-raising gimmicks and instead opted for increasing taxes by $1.4 billion, most of which would be gained from a one-cent increase in the sales tax and its extension to some other purchases. Republicans have criticized Corzine for not cutting more spending before recommending tax hikes. GOP assemblyman cite their list of billions on dollars in possible savings that has been posted on their web site for months. Some Democrats have complained that the Governor did not consider hiking some other taxes, including marginal income tax rates on high earners, in order to be able provide more property tax relief. However, Corzine insisted, and continued to do so at the Hamilton function, that the state needs recurring revenues to balance the budget, needs to be disciplined about spending to avoid future budget crises, and must recognize the effect that any tax hike can have on the state’s economy. Despite all of these concerns, the Governor remains committed to taking care of the state’s most vulnerable residents. These include kids who need health care, special education, and after school programs.and seniors who need pharmaceutical and housing assistance. Yes, Corzine said, he has had to make some tough choices that have upset folks, including some who may have supported him last November. But, he claimed, if New Jersey practices fiscal integrity for the next few years and gets its economy rolling – the Governor says he is vigorously working to recruit new businesses to locate here -, the future will be bright. Corzine warned, however, that long-term fiscal integrity and the need to keep taxes down require that state to be even more disciplined about spending in future budgets. In addition, as lawmakers consider property tax reform, they need to think not simply about alternative revenue sources but also about cutting wasteful, low priority spending and making government operations and programs more efficient and effective. Corzine told the Hamilton audience that he would have liked to cut even more spending in his budget proposal before recommending tax hikes and reminded folks that he has a government reengineering commission that is looking for ways to streamline operations and to decrease costs. The Governor cited four other major areas where the state and its taxpayers may be able to save money. He noted that next year there will be contract negotiations with the state’s unionized workers and that he is concerned about the burden on taxpayers posed by pension benefits and by post retirement health benefits. Despite complaints about likely tuition hikes caused by the cuts in aid to higher education that he recommended, Corzine said that there needs to be more oversight of the state’s colleges and universities and a greater effort to control costs on campuses. With an eye toward property tax reform, the Governor also stated that education spending needs to be reevaluated and will be during the summer. While he recognizes the obligation to provide a thorough and efficient system of education, Corzine wants to make sure that education dollars are being spent effectively in all school districts, including the so-called Abbott ones. While he admitted that some tax shifting would have to occur to provide property tax relief, the Governor wants to achieve efficiency in education spending and in the delivery of local government services. He praised Joe Roberts’ CORE Reform Plan that aims at reducing the costs of local government and education through consolidation and regionalization of services and more aggressive program and budget oversight. So while the Governor respected citizens’ concerns about specific components of his budget proposal, his overriding message at the town meeting was that they consider his individual recommendations as part of a comprehensive plan to balance the budget and make progress toward achieving long-term fiscal integrity. Trade-offs and sacrifices are necessary. One of these sacrifices is a sales tax hike, which is he regards as less odious to individuals than higher property taxes and to businesses than higher corporate or income taxes. The audience seemed disappointed when Corzine could not guarantee that a property tax reform convention would be put on this November’s ballot. But maybe the additional time will enable lawmakers to agree on some efficiency measures that will reduce the costs of operations and programs at all levels of government and make property tax reform part an overall tax reduction plan. 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 JERSEY LAWYER and monthly reports on New Jersey for CAMPAIGNS AND ELECTIONS Magazine and is a member of CQPolitics.com’s Board of Advisors that offers weekly commentary on national political developments.

CORZINE STUMPS FOR HIS BUDGET AND A BETTER FUTURE