The re-election campaign of Governor Jon Corzine was down-right giddy this week when it was announced that the state's tax amnesty program generated more than $600 million in new state revenue, $400 million more than anticipated.
The Governor's re-election campaign issued a breathless statement touting this accomplishment, and reiterated the Governor's position that the new-found money should be returned to property taxpayers.
Strategists for the Governor no doubt hope that this new windfall will ease some of the pain of the rest of the FY 2010 state budget, an appropriations act that even Senate Majority Leader Steve Sweeney said "still stinks."
Those supporters of the Governor who are already counting the extra votes this windfall will bring in November would be wise to remember what happened the last time an embattled Democrat Governor and Legislature enacted an ambitious "property tax relief" initiative, as a response to voter anger over their fiscal policies.
In November 1990, the Democratic Party suffered record losses at the local level, and an unknown Republican named Christie Whitman nearly upset US Senator Bill Bradley. Voter anger over Governor Jim Florio's tax increases and his school formula, the "Quality Education Act (QEA)" generated serious enough voter backlash that the Legislative Democrats vowed to produce in 1991 a massive "property tax relief" plan they hoped would mollify angry voters.
In 1991, they did so, and the result was the "QEA 2," which shifted hundreds of millions of state dollars into additional local property tax relief.
The result of this policy was the lowest property tax increase in NJ in 25 years. Total property taxes in NJ in 1991 went up a miniscule 1.4%. The lowest single annual increase in 7 years before that was 6.5%.
Since 1991, property taxes have risen annually from a low of 4%, to a high of 7.6%. In the last 7 years alone, NJ's property tax levy has increased 55%, according to the NJ Department of Community Affairs ($14.9 billion to more than $23 billion).
Ironically, the QEA 2 worked in 1991, but it did nothing to save the Democrats' political skin. The Democrats lost control of the NJ Legislature that November, handing Republicans veto-proof majorities in both houses, despite the record low property tax increase.
In fact, polling in competitive legislative districts that year revealed that more than 2/3 of voters believed their own property taxes were rising, even after they received their August tax bills which in many cases demonstrated actually lower taxes.
What happened? Voters were convinced and were un-persuadable, that their tax burden had increased unfairly, and unjustly. They knew who was responsible, and they knew who to blame. Despite their best efforts, the Democratic Party and its candidates were branded.
Is Governor Corzine likewise irretrievably branded? Possibly not. The demographic changes in NJ since 1991, including voter registration populations, favor the Democratic Party significantly. The Governor has not sufficiently angered his public employee union base, especially the NJEA, to the degree Governor Florio did in 1990. And of course Governor Corzine is likely to enjoy a campaign media advantage over his opponent, which was not a determinative factor in prior elections.
Working against Governor Corzine is that Governor Florio had the luxury of 2 years of rehabilitation, from 1991 to 1993, when he sought re-election. By 1993, his approval ratings had stabilized, and the tax revolt that led to a Republican resurgence was almost a distant memory. He lost anyway.
It can be argued that time is not on Governor Corzine's side. He is suffering from a downward, instead of upward, movement in approval and popularity, right at the moment of his re-election campaign.
Can the amnesty windfall help him anyway? In the face of a 55% increase in property taxes in the last 7 years, it is probably unlikely that a tax-weary, skeptical voting population will rush to embrace the incumbent solely on the basis of a sudden windfall in amnesty revenue.