Making Fiscal Sense in New Jersey | Citizens Against Government Waste

Making Fiscal Sense in New Jersey

The WasteWatcher

Politicians frequently stand on soapboxes and tell voters what they want to hear, but often fail to back their words up with action after they are elected.  President Obama did this during the 2008 presidential race when he promised that people would be able to keep their doctor if healthcare reform passed and assuredeveryone making less than $250,000 thatthey would not be hit with any new tax increases.  Now that the healthcare bill has passed,citizens are discovering that that their doctors are dropping private insurers and most taxpayers will have to pay moreto provide health benefits for everybody. 

It is unfortunate that most voters have buyer’s remorse at some point because of actions taken by elected officials once they are in office.  Fortunately, taxpayers have one reason to be optimistic about politicians staying true to campaign promises because ofthe actions of Chris Christie,the Republican Governor of New Jersey.  Since he was sworn in on January 19, 2010,Gov. Christie’s actions have personified the principleshe highlighted when he kicked off his campaign in February of 2009.  He has taken a hatchet to thewasteful spending, lowered taxes, and promoted stronger public education. 

According to a 2009 study conducted by the Pew Center for the States, New Jersey has long-term debt of $44 billion, which is 53 percent larger than the state’s annual budget and is higher in per capita debt than almost every other state.  One of the biggest issues is that the state pension fundis underfunded and has been raided for years to cover spending shortfalls.  New Jersey’s fiscal problems have plagued the state for several years, but intensified in 2010.  Gov. Christie knew from the outset that he needed to make some big changes to plug the $11 billion budget deficit, which he has done in his proposed budget. 

On February 11, 2010 Gov. Christie made good on one of his campaign promisesby freezing all state spending and cutting programs.  Among the reductions he proposed werean $820 million reduction in aid to public schools,a $65 million cutin global warming prevention programs, and lowering state subsidies to New Jersey Transit.  Some of the more controversial cuts he proposed includedlaying off 1,300 state workers, closing state psychiatric institutions, and cutting a half-billion dollars in aid to towns and cities.  The fact that Gov. Christie has sought changes,such as controlling the number of state workers, is a testament to the fact that he knows that making difficult cuts is absolutely necessary.  If Gov. Christie’s state budgetpasseson June 30, 2010,these cuts will result ina $300 million budget surplus.  This would be quite a turnaround from an $11 billion budget deficit. 

Aside from solving spending problems, Gov. Christie has also sought to addressthe state’s high tax rates that have caused people to abandon the state.According to a report releasedin February, 2010,by the Center on Wealth and Philanthropy at Boston College, more than $70 billion in wealth left New Jersey between 2004 and 2008.  The massexodus of money and people can largely be attributed to increases in income, sales, and property taxes. 

After being elected, Gov. Christie quickly realized that the state cannot expect its economy to grow if high-income producing individuals and businesses flee the state.  In May, Gov. Christie vetoed a measure which sought to impose a one-year tax hike on people making more than $1 million, which was expected to affect 16,000 households.  New Jersey taxpayers chalked up a win when on June 21, 2010 the legislature was unable to override Gov. Christie’s veto. 

Gov. Christie also proposed a constitutional amendment that would ban towns from raising property taxes by more than 2.5 percent without voter approval.  According to a June 22, 2010 Associated Press article, some municipalities in New Jersey are in desperate need of the cap in property tax increases.  In Newark, for example, property taxes have gone up 76 percent in last decade and 19 percent in the past five years.  This story is played out in most of New Jersey’s 566 municipalities. 

Another plank of Christie’s campaign was to promote stronger education programs.  In contrast to the unions, who want to distribute merit pay evenly across school districts (which doesn’t really reward individual teachers for excellence), Gov. Christie would like to hold teachers accountable and reward those who improve their students’ performances.  In addition, Christie would like to make policy changes to the way school districts downsize.   If reductions in force are necessary, Gov. Christie would like to see layoffs that are based on performance and not seniority.  Aside from changing how teachers are paid and retained, Gov. Christie also found a fair amount of government waste lurking in the halls of public schools.  Hehas proposed rescinding aid to school districts, asking teachers to contribute 1.5 percent of their salaries toward the cost of their benefits package, and asking educators to take a one-year wage freeze.  While none of these policy decisions are popular, they all create formidable savings in a state that is $11 billion over budget. 

During Christie’s short tenure in office,he has done what most politiciansfear:  making policy decisions that are unpopular, but right and necessary.  He has also proposed cuts to state programs that are full of waste, fraud, and abuse, while at the same time attempting to rein in an out-of-control state legislature that isover-taxing its citizens.  In a May 12, 2010 column in The Hill, A.B. Stoddard said it best when she described Gov. Christie’sactions as, “acting like his last election is behind him.”Politicians who do not shrink from difficult but necessary policy decisions come around once in a while, but with state budget problems burgeoning in every state, taxpayers can only hope that leaders like Gov. Christie  will rise in their states. 

MacMillin Slobodien

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