CAMPAIGNING FOR AND AGAINST THE BUDGET

by David P. Rebovich An unusual story on this spring’s budget process ran in New Jersey’s newspapers last week. The Associated Press reported that not only was a group planning a demonstration against Gov. Jon Corzine’s budget proposal for the next fiscal year, others were preparing to rally in support of it. Now protests about a budget proposal occur almost every year, since there is always someone who is upset about spending cuts, smaller than desired funding increases, or hikes in taxes and fees. While many budgets do satisfy certain groups and citizens, rarely does anyone demonstrate in favor of a spending plan. And running television and radio ads asking the general public to get behind a Governor’s budget proposal is all but unheard of. But this year New Jersey will have demonstrations for and against the Governor’s budget proposal and, yes, some ads, too. Currently the NJEA, AFSCME and the CWA are sponsoring television and radio ads that praise Gov. Corzine for taking the “right way” in dealing with the state’s fiscal situation. The ads call on New Jerseyans to tell legislators, “No more gimmicks. Pass Corzine’s budget. Clean up Trenton.” These unions, along with others representing police officers and firefighters and private sector employees, will also conduct a rally on June 19th at the State House. On June 15th some 50 nonprofit and advocacy organizations will have their own demonstration in support of the Governor’s budget. An anti-tax group will rally against the plan this month as well. The interesting question is why there is aggressive campaigning for a budget proposal that, frankly, has caused Gov. Corzine’s approval rating to drop to a paltry 35 percent, consternation among Democratic legislators, and conflict between the Administration and legislators of both parties? In fact, public officials at all levels of government and citizens throughout the state have several complaints about the Governor’s austere plan. The specific recommendations that have met the most criticism are the one-point increase in the sales tax, cuts to higher education that could lead to big tuition increases, and freezes in state aid to schools and towns that will lead to higher property taxes. The Governor claims that these admittedly painful measures are necessary to bring state spending in line with recurring revenues and to avoid relying on any gimmicks to balance the budget. While Gov. Corzine is asking for what he calls “shared sacrifice” from citizens to balance the budget, state government workers are being spared. Although New Jersey has to fill a $4 billion hole in next year’s spending plan, he has not recommended layoffs for any merit system personnel. In addition, he has proposed a $1.3 billion payment into the government workers’ pension fund to help shore up a retirement system that lawmakers have previously raided and then allowed to remain under-funded. The Governor has also tried to remain true to his campaign promise to help the “truly needy.” While his generosity is limited by the state’s revenue problems, Corzine nonetheless put increases for child welfare, food programs, and programs for the homeless, as well as tax relief for more low income workers, in his budget proposal. Thus, compared to most other groups and individuals in New Jersey, state workers and anti-poverty advocates believe that they and their causes will do reasonably well if the Governor’s budget proposal is approved as is. However, with less than a month to go before a new budget must be signed, it is unlikely that the Governor’s proposal will be approved without changes, including some fairly big ones. Legislators remain concerned about raising the sales tax rate and how voting for such a measure may be used against them in their reelection bids in 2007. While polls show that a majority of New Jerseyans prefer a sales tax hike to other tax increases, they also indicate that most folks want lawmakers to pursue cuts in state spending before raising any tax rates. And, property tax relief is a priority for most citizens, one that takes precedence over payment into a pension fund or, alas, additional programs for the needy. Then there is the state’s changing revenue situation which, according to Treasurer Barry Abelow, has changed for the worse. As painful as Corzine’s original budget proposal is, he and the Democratic-controlled legislature will have to find an additional $400 million to $500 million in some combination of more cuts or more revenues to balance next year’s budget. Both the Governor and Democrats in the legislature have ruled out any more taxes or fee hikes. Corzine has already announced plans to pare back some spending on new initiatives, including some for the needy. Even with the poorer revenue picture, Republican legislators continue to argue that a sales tax hike can be avoided by making more cuts in wasteful spending and low priority programs. A group called the Americans for Prosperity, headed by Bogota Mayer Steve Lonegan, who sought the GOP gubernatorial nomination last year, will also hold a rally in Trenton against any new tax hikes before the month is out. While no one expects this event to resemble the massive, rowdy anti-tax rally on West State Street in Jim Florio’s first year as governor, Steve Lonegan cannot be underestimated. His quick wit, keen speaking ability, and steadfast commitment to his cause may enable him to garner more attention than GOP legislators who are also arguing against any new taxes in the next year’s budget. But no sooner were the dates for rallies announced and the pro-budget ads on the airwaves than some Democratic legislators presented their own ideas about how to avoid a sales tax hike. State Senator Steve Sweeney (3rd district) and Assemblymen Jerry Green (22nd district) and Paul Moriarty (4th district) announced a bold plan to save the state $700 million by cutting state workers’ salaries and benefits by 15 percent. These lawmakers said they want to bring public sector compensation packages in line with the private sector as a matter of equity – taxpayers should not have to pay for benefits others that they don’t receive themselves – and to save money during these tough times. State employee union officials immediately expressed outrage at this proposal. They rejected any call for give-backs in salaries or fringe benefits while contracts are in effect. The Corzine Administration and Democratic legislative leaders announced that they had every intention of honoring those contracts. But the real question is, what about the future? Well, Sweeney, himself a union leader, Green and Moriarity have to know that their proposals have no chance of being acted on by the end of the month. But they have put it on the record that Democrats are willing to take on state workers in the name of the average New Jersey taxpayer. If the sales tax increase is approved – smart money says it will be -, these three legislators have provided themselves with political cover, since they can tell their constituents that they supported a taxpayer friendly alternative. But, the Sweeney-Green-Moriarity proposal is more than just a self-serving political ploy. After all, Gov. Corzine himself has publicly stated his interest in looking at state employee retirement and health benefits plans with an eye toward saving money. As such, state workers, and public employees at all levels of government in New Jersey, should not be surprised if in their next round of contract negotiations, they will be asked to accept small salary increases and to give back some benefits. For the Corzine-era Democratic Party, populism apparently means being more responsive to the views and concerns of private citizens who, after all, far outnumber government employees. Who will government employees then look to for sympathy, the Republicans? Heck, most GOP legislators either looking to sign on to the Sweeney-Green-Moriarty proposal or are grumbling that these Democrats stole one of their best planks for GOP’s campaign platform next year. 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.

CAMPAIGNING FOR AND AGAINST THE BUDGET