Budget Compromise is Just the Beginning


It looks like Governor Chris Christie and the Democrats in the state legislature have reached a compromise on the state budget.  Government is not going to shut down on July 1 and the spirit of compromise was in the air in the Statehouse.  That’s the good news, but don’t kid yourself.  Just because the Republicans and the Democrats could agree on one thing only, which is that neither party wanted to be blamed for shutting down the government; the partisan divide in Trenton is greater than ever when it comes to key issues. 


One of the biggest is the so-called “Millionaire’s Tax”.  Democrats passed legislation to increase income taxes on the 16,000 New Jerseyans who earn over $1 million a year.  Governor Christie vetoed it and is prepared to do it again.  The Democrats couldn’t override the veto, but, I say, they are likely to try again to pass another millionaire’s tax only this time saying the increased revenue will be directed somewhere else, say, to the restoration of school or municipal funding cuts in the Christie budget.  The reason is that the Democrats believe they have found a wedge issue that helps them and hurts the governor. 


My gut feeling is that even though I don’t want to see taxes raised on anyone in the state, it is fair to ask those who earn over $1 million a year to pony up a few grand more, particularly given the fact that the term “shared sacrifice” is being thrown around the state these days.  Look, we have an $11 billion budget gap, which isn’t going to close by magic.  There is a lot of pain.  There will be pain for people who take buses and trains to work and will see a 25 percent increase in fares.  There will be pain and suffering for senior citizens who look forward to a property tax rebate every year but won’t be getting it because the governor correctly argues that the money is not there for it. 


There will be pain and sacrifice in school districts who lose millions of dollars in state aid because the state can’t afford it.  And what about the towns—way too many in New Jersey, of course—who are getting massive cuts in state aid and will lay off municipal employees and cut important services in order to balance their books?  None of those decisions are popular.  None of them feel right.  But that’s what happens when the state runs up a debt this big and the bill finally comes due. 


To Chris Christie’s credit, he is cutting up our credit cards and saying we are going to finally pay with cash.  But, if you are going to ask seniors, commuters and kids—who may no longer have extracurricular activities or may lose their favorite teacher—to sacrifice, then what’s  so terrible about asking someone who earns $1.2 million a year to share some of that pain?  There is a sound and logical argument that if you tax millionaires they may leave the state, thereby reducing revenue and jobs since many of the 16,000 millionaires are small business owners.  Unfortunately, my instincts tell me that it is probably true that some wealthy New Jersey citizens will move to Florida or Delaware or any place outside of New Jersey in order to avoid taking another tax hit. 


But, that still doesn’t mean that we shouldn’t spread the pain just because a millionaire CAN and MIGHT leave the state and a senior citizen on a fixed income loses his or her rebate and has to pay higher bus fares.  Think about it.  One CAN leave the state, but the other one can’t.  I’m not convinced we should be making public policy based on those factors alone.  It just doesn’t seem fair to me. 


The Democrats are doing all they can to create class warfare by saying Governor Christie has chosen millionaires over working and middle class struggling New Jerseyans.  While that argument may score some cheap political points, it doesn’t help the situation in any meaningful way.  It doesn’t help us move forward.  It doesn’t solve our fiscal crisis.  As for Governor Christie, I respect that he is trying to keep his promise not to raise taxes, be they on millionaires or anyone else.  I also admire the bold way he’s handled this fiscal crisis by taking it on by the horns and making some very tough decisions. 


However, if you don’t send a tax rebate to someone who is poor—a rebate they’ve come to expect—is that not a de facto tax increase?  If someone has to pay more to ride a bus or a train in order to get to work because they can’t afford car insurance in New Jersey, what’s the difference whether you call it a fare hike or a tax increase?  It’s still coming out of the same pocket.


It’s great that we have a budget and the government won’t shut down on July 1.  The casinos will remain open and you can get your car inspected at the DMV.  But, that doesn’t mean that Democrats and Republicans will be singing Kumbayah on State Street any time soon, because the partisan divide over critical issues like the so-called “millionaire’s tax” are greater than ever before.




Budget Compromise is Just the Beginning