by David P. Rebovich Three and half months is an eternity in political time. Things change, such as the policy positions of lawmakers, public opinion on the issues, and the ability or one politician or another to influence colleagues or events. What almost never changes, however, are the underlying political interests of elected officials. That was certainly true this budget season and is a main reason why New Jersey state government was shut down for a week. But so too were differences in principles, specifically Governor Jon Corzine’s commitment to fiscal integrity and the belief among Democratic legislators that they cannot do any good in policy terms unless they do what is necessary to maintain their majorities in the General Assembly and Senate. The inconveniences caused by the political wrangling last week will likely keep many New Jerseyans skeptical about the willingness and ability of the Democrats who control state government to change politics and public policy for the better. So too will the perception that despite all the drama about the new budget, not much has changed. There will be some modest property tax relief, but many taxes will be higher. And, state aid and program support will be tight. However, Governor Corzine and Democratic as well as Republican legislators will have the opportunity to convince New Jerseyans of their commitment to political and tax and spending reform this summer in the planned special legislative session and in next year’s budget. Looking back, it was naive to think that the way state government has conducted itself for decades could be changed in six months. Of course the reform-oriented new Governor would clash with veteran lawmakers from both parties. On March 21st, moments after Corzine made his Budget Address to the joint session of the Legislature, Republican legislative leaders and, more importantly, Democratic ones complained vigorously about the new governor’s proposed one-cent tax hike. The Republicans’ objection was based on their small government ideology, anti-tax policy perspective, and political interest in being identified as advocates of the state’s beleaguered taxpayers. The Democrats, especially the South Jersey contingent in the General Assembly and Senate, had two major concerns, one political and the other policy-related. The political one was that supporting the Governor and voting for the sales tax hike would hurt legislators’ reelection prospects in November 2007. The policy concern had two components. Several Democrats thought that increasing the sales tax rate simply to balance the budget would be political disaster for the party in power, as it was on three other occasions in New Jersey political history. Rather, any sales tax hike should be used to provide property tax relief or, better yet, be part of a major property tax reform plan that would win over most residents. Secondly, the sales tax is a regressive measure that hits the neediest the hardest. If more revenue really was needed to balance the new state budget, why not increase taxes that fall more heavily on better off residents, like the progressive income tax or luxury and business taxes? Or, as Senator Steve Sweeney argued, why not ask state workers to give back some of their benefits? Senator John Adler would later suggest that the state lay-off 2,000 members of its 82,000 workforce rather than increase the sales tax. And, the Republican Assembly caucus recommended making over $2 billion in cuts in order to avoid any tax increases in the new budget. As it turned out, the Governor did get his one-cent tax increase but not on the terms that he wanted. Indeed, state government may still be shut down if the Governor and Speaker Joe Roberts did not agree on a compromise proposed by Senate President Richard Codey, the former governor. Corzine had been holding strong to his commitment to signing a budget in which expenditures match real revenue, not money gained from gimmicks. And, he wanted that one-cent increase in the sales tax, and the $1.2 billion in revenues it would provide, to balance this year’s budget and reduce the structural deficit next year to a more manageable $2 billion. The Governor got the sales tax hike but only one-half the revenue for the 2007 budget and for future ones if citizens decide to support a constitutional amendment to that affect And, Roberts almost blew apart the already tenuous budget agreement arrived at on Thursday afternoon when he announced on Friday that he would propose a second constitutional amendment to dedicate all the revenue from the new sales tax hike to property tax relief. The Governor regarded the latter as a goal, one to be considered only after fiscal integrity is achieved and the climate for business in the state is improved. In Corzine’s terms, Roberts’ proposal may perpetuate the state’s structural deficit and lead to fiscal crises in the future. Corzine was able to put Roberts’ proposal on hold for now. But the Speaker’s attempted end run around the Governor added to the running story during the state shutdown about palace intrigue and which state official – Corzine, Roberts or even Codey – would be the real winner in this year’s budget process. When Roberts gave into a sales tax hike just a day after emphatically declaring the idea dead, he was deemed a loser. But the Speaker had also said that any sales tax hike should be used for property tax relief, and he did get at least half of that in the compromise. What about the Governor? Corzine, called the winner by many newspapers, later admitted that he got only about 75 percent of what he wanted in the new budget. Besides compromising on the sales tax and losing out on some $550 million in recurring revenues that he wanted to use to reduce the state’s structural deficit, Corzine also lost his proposed hospital bed tax, alcohol tax,