Garden State Patriot

New Jersey’s government expenditures are really almost twice as much as the supposed ~$30B budget proposed by Corzine. This due to the vast amounts that are spent “off the books.”

Big hat tip to Alice’s Restaurant Blog on this one.

A letter to the editor from State Senator Marcia Karrow of District 23, Warren and Hunterdon Counties.

Governor Corzine has been saying the State’s spending will be $29.8 billion in fiscal 2010.  And he wrote in a recent Star Ledger letter the editor, “Having one appropriations act avoids confusion.”  Well, the truth is that the State will spend closer to $55 billion, and the $29.8 billion appropriations act is confusing, misleading and incomplete. It borders on an Enron style cover-up of serious financial instability.

Not long ago, almost all of New Jersey’s spending was contained in a single appropriations act as required by our state Constitution.  But, as state spending has surged, much of it has been pushed off the books into a labyrinth of special accounts and authorities. Above and beyond the $29.8 billion spent through what Governor Corzine calls the budget, the state spends more than an additional $20 billion “off the books” through special accounts and authorities. Furthermore, many of these special accounts and authorities are running huge deficits.

One huge example: The $4 billion in approximate annual spending that comes out of the Unemployment Insurance Fund. Spending from this fund has grown by $2 billion over several years, and it is completely outside the state’s official budget. The fund is projected to spend $1 billion more than its revenues for FY 2010 because of rising unemployment.

Here are some other examples of governor’s off-budget “magic”:

1. The billions of dollars in spending by the School Building Authority will grow by leaps and bounds because of the governor’s decision to borrow and spend an additional $4 billion without voter approval. The spending isn’t recorded in the state’s official budget.
2. The Turnpike Authority’s nearly $2 billion in spending increased by $500 million this year alone, primed with 50% toll increases. The Turnpike Authority’s spending is completely off the state budget.
3. The pension funds for state and local employees will spend more than $6 billion in fiscal 2010, even though contributions into the funds will be less than $3 billion. You guessed it:  Neither the spending out of the pension funds nor a $58 billion pension deficit is accounted for in the state budget.

One particularly offensive accounting gimmick lets Governor Corzine keep $2.2 billion in federal bailout money off his budget so he can claim he spent less than last year. It’s sort of like the child who covers his eyes and says, “You can’t see me.”

Our state’s bookkeeping is reminiscent of Enron’s before it collapsed – purposely confusing, misleading, and incomplete.  The growth of our State spending to approximately $55 billion and the way it is facilitated through a growing maze of authorities and special accounts are not Corzine’s doing alone.  But Corzine has been perfectly willing to perpetuate the myth that state spending is only what’s on the budget and that our books are balanced. It is similar to Wall Street wizards and people such as Bernie Madoff claiming their official balance sheets were strong — right up until payments started being missed and people discovered an inconvenient truth.