A Meaningless Budget

The 2009 New Jersey State Budget is not the stunning tribute to sound fiscal policy The Trenton insiders would have

The 2009 New Jersey State Budget is not the stunning tribute to sound fiscal policy The Trenton insiders would have you believe, but just a shallow campaign scam that reeks of political showmanship, while failing to address the state’s dire financial woes.

This budget continues to advance the unfunded state mandates that drive up property taxes ranging from the empowerment of the NJEA Teachers Union to binding arbitration, to COAH mandates and dozens of other tax-increasing rules and regulations. Income and sales tax revenue continue to be diverted to outrageous spending in the Abbott Districts and so-called “property tax relief” is no where to be found. For decades suburban taxpayers have been victimized by Trenton’s ruling class that has drained Income and sales tax increases on the phony promise of providing “property tax relief” and suburban taxpayers have shouldered the burden of what is not property tax relief, but income redistribution. This budget continues that destructive pattern. Local governments continue to tighten their belts on the discretionary spending within their control, but Trenton continues its attack on local government.

After back to back years of annual spending increases of almost 10%, a level budget is no great accomplishment. One of the oldest tricks in government is for a new administration to come into office and raise taxes and spending, blaming the alleged mistakes of the prior administration. This is commonly followed by spending “reductions” and even tax cuts in the last two years. The Corzine budget is classic politics, not sound fiscal management.

The real measure of success is how this budget affects the looming problems facing our state. New Jersey has the highest property taxes in the nation, the worst and most progressive income tax in the country and tied for the highest state sales tax. Having the worst overall business tax structure has driven business and thousands of jobs out of New Jersey and reduced our state to a second tear state economy. The problems facing New Jersey’s economy are not out of our control; we have not been hit by a hurricane like Katrina, an earthquake like China and we have not been invaded by enemies. The number one factor harming our economic growth and prosperity is State Government Policies. Nothing else and this budget only perpetuates this condition.

But the most disturbing threat is the outrageous growth of state debt. Six months ago, Governor Corzine proclaimed we faced a debt “crisis” and the only solution was to asset monetize” our toll roads to raise $38 billion in new debt to reduce old debt. He claimed the state outstanding debt at the time was $33 billion. In passing this new budget, a key component is $3.9 billion in new school construction debt, borrowed without voter approval. The debt “crisis” of last January has evaporated and given way to another borrowing spree. Combined with other new debt scheduled to be issued over the months to come, the state’s total debt will exceed $40 billion by the end of the year. How anyone can claim this is a responsible budget is as mysterious as the disappearing debt “crisis.

Until 2001-2002, New Jersey had led the nation in recovery from recessions and economic downturns. Only recently have we lost the capacity to do so. Politicians don’t seem to learn the lesson. They grow spending during good economic times and when bad economic times hit, they scramble for new “revenue’ sources to fund there expanded government programs. This budget continues the government programs that demand more and more revenue and burden this states economic health. New Jersey will not be able to lead the country out of the next recession and this budget will assure we wallow for an extended period. Simply put, this spending plan continues the policies that have hampered our economic strength and this alone makes it a failure.

This budget fails to reduce the crippling tax burden responsible for the outward migrations of tens of thousands of our upper income friends and neighbors-Trenton remains addicted to high taxes, our debt continues to skyrocket and our state’s economy will continue to decline. Thank you Governor Corzine and Trenton’s Central Planners for another destructive budget.

Steve Lonegan was Mayor of Bogota, NJ, and is Executive Director of Americans for Prosperity – New Jersey. Americans for Prosperity (AFP) and Americans for Prosperity Foundation (AFP Foundation) are committed to educating citizens about economic policy and mobilizing those citizens as advocates in the public policy process. He is a prolific writer, having been published in newspapers and blogs. He just published a book, Putting Taxpayers First: A Blueprint for Victory in the Garden State, that discusses the impact of the Trenton government on the well being of the taxpayers of the state. He offers solid and workable solutions. Learn more at lonegan.com.

A Meaningless Budget