Jon Corzine’s Assets

On Tuesday, when Governor Corzine delivers his ‘State of the State’ address, it will no doubt center on the Administration's

On Tuesday, when Governor Corzine delivers his ‘State of the State’ address, it will no doubt center on the Administration's much discussed but still undisclosed ‘asset monetization’ plan to tinker with New Jersey's beloved roadways in an effort to stabilize the state's finances. Word on the street has it that the Governor's speech will hold out a few carrots but what he’s got in his arsenal is a really big stick.

Here’s the 'stick'–there is a gigantic and growing pothole in the states financial infrastructure that needs fixing before the whole road collapses. And, if the pothole doesn't get fixed, a whole lot of folks are going to get hurt.

Here's the problem–the threatened pain to be inflicted by the Governor's ‘stick’ will likely be directed at New Jersey's working families who are already feeling too much pain. The prospect of layoffs of average-wage workers, raises in tuition costs for middle class families, increases in commuting costs (from higher tolls and gas prices), higher local taxes for schools, and increased health insurance costs combined with an ever-increasing cost of living in New Jersey means that the middle class will suffer yet again.


Selling his asset monetization plan will be a huge lift for the Governor, as polling still shows that a majority of the public opposes any tinkering with the Turnpike or the Parkway. Critics, including the public, have dubbed the yet unseen financial restructuring proposal a “toll-hike plan,” “overly secret,” “unpopular,” “anti-union,” and even “anti-New Jersey.” Whack.


For the last two years we haveheard and read press reports about a Transportation Trust Fund in desperate need of cash and bridges in desperate need of repair, growing health care and pension obligations due to failures of the state to fund the pension combined with bad market forces, needed increases in school funding and school construction, strong public demand for more property tax relief, financing for children's health care that the federal government is no longer picking up, and a looming three billion dollar budget deficit for this year.


The real question about the ‘stick’ approach is “Who gets whacked?” Besides the marshaling of all of his sales skills, what the Governor will need most is allies. He will need lots of them and they will be hard to come by. As such, we imagine he will wield the stick to get them. Recent foreshadowing indicates that he will almost certainly make threats of serious state worker layoffs and reduced services to the public; project cuts in aid to local government, and therefore potential layoffs at every level of government including teachers, police and firefighters; signal less funding for schools, and therefore cuts in beloved programs and increases in local property taxes;consider cuts to higher education, and therefore increases in tuition; propose elimination of popular programs and services and whack and whack and whack.


The financial problems that our state faces are very real and also very structural. However, for decades, many unions and other progressive organizations have posited that real financial restructuring of the state’s finances should come in the form of a much fairer and more progressive income tax and corporate taxation that make corporations actually pay something near their fair share. But those ideas seem tokeep fallingvictim to unwarranted fears about wholesale flight of the wealthy (who pay a substantial portion of the state’s tax income) to other states and about the creation of a ‘bad business climate’, in addition to an overall lack of political courage.

Whether or not the Governor's ‘asset monetization’ plan is a good, or even good enough, answer to the state’s deep and threatening financial problems remains to be seen. The next couple months will rightly see intense debate on that proposal. The Governor's approach isn't surprising or hostile. He learnedto wranglein the business world, where if at first you can't agree, you share the pain until you do. However, brandishing the threat of "whacking" New Jersey's middle class once again if his plan doesn't please the public is not an acceptable road to take. We hope the Governor takes an alternate route.

Jon Corzine’s Assets