Garden State Patriot

As we all know, New Jersey is in a serious fiscal crisis. Next year the state is facing a mind-boggling $8B deficit and, based on recent experience, that deficit is only likely to balloon further. This puts our new governor Mr. Christie in a real predicament – balance the budget according to state law without borrowing money and while trying to live up to his campaign promise to cut taxes.

Politically, Christie is going to be under tremendous pressure to follow through and cut taxes. The suffocating tax climate in New Jersey is one of the main reasons he was elected and property taxes were the top issue for New Jersey voters this year. Further, according to some recent polling, voters are expecting Christie to cut taxes in his first year.

The signals, though, that Christie will follow through on property tax relief so far aren’t promising.

First, Christie has shown no inclination to do anything at all about the unfair school funding formula in the state. As we witnessed during the primary with Steve Lonegan, Mr. Christie does not support changing the formula to a per pupil basis which would result in a 20% cut in property taxes.

In a column last week by Paul Mulshine, he explained that Christie is not only opposed to increasing state aid to suburban towns like Toms River, but that he also opposes ending mandates like binding arbitration: 

No sooner were the votes counted than he was telling suburban voters they’re out of luck if they thought he was going to help them with their property tax bills.

That happened last week when he met with several Ocean County mayors in my old home town of Toms River. Christie scored his biggest wins in Toms River and adjacent Brick Township, which together gave him 38,000 votes toward his 100,000-vote margin of victory. The mayors of those and other towns asked him if he will deliver badly needed state aid to their towns.

“I’m not going to give Newark’s money to Toms River,’’ Christie told them.

The mayors then proceeded to tell the governor-elect that if they won’t be getting more state aid, then at least they need to be relieved of state mandates. The most costly such mandate is binding arbitration of labor disputes. The arbitrators routinely award raises that can add up to double the current cap on tax hikes, which is 4 percent.

I discussed this yesterday with Manchester Township Mayor Michael Fressola, who was at the meeting. Fressola said the police in his town now earn an average of $94,000. In the absence of state aid, homeowners have to pick up that tab.

“That’s why we were asking him to get rid of a lot of the mandates,” said Fressola. “That would in effect be the same as more state aid.”

It would indeed, but McGreevey’s response to the mayors was: “I can’t see eliminating binding arbitration.”

I’m sorry, did I say “McGreevey”? I meant “Christie.” Pro-taxpayer before the election, pro-union afterward. It’s hard to tell the two apart.

This leaves the property tax gimmick. Christie won’t be able to deliver on his promise to first, restore, then increase the rebates without borrowing or increasing the income tax which funds the rebates. Again, either more debt and fiscal peril or, on the other hand, broken campaign promises.

Herein lies the problem that so many conservatives had with Mr. Christie throughout the campaign. Yes, there was a lack of specifics, but there was also a more overriding doubt that he would have the political will and courage to address the serious structural problems with the budget.

Today, Mr. Christie is meeting with his transition team to discuss taxes. It will be interesting to see what other signals come from this meeting. Will he show any more willingness than he has to date to address the aforementioned issues? Or will we hear more generalities and platitudes?

For Mr. Christie’s sake I hope it is the former and not the latter. For if he ultimately fails to deliver on real property tax relief I believe it will to his own political peril. The people who voted for Mr. Christie are expecting no less and they will surely hold him accountable four years from now.  

The time is now for bold leadership on this issue and the state’s finances in general - not timidity and sleight of hand.

[ON EDIT] And on cue: NJ Budget May Be Worse Than Thought: Christie

Cross-posted at Red County and CMNJ.

Today’s vote on the Corzine/Democrat budget – also known as the Kill The New Jersey Middle Class Act – has been postponed until next week. Miraculously, the tax amnesty program has yielded an ‘unexpected’ $400M windfall. And now, our savior, Governor Jon S. Corzine wants to use it to reinstate cuts to the property tax rebate program. Could Hollywood have scripted it any better?

Gov. Jon Corzine announced a scheduled vote today on the state’s $28.6 billion budget has been postponed after the state got at least a $400 million windfall from its tax amnesty program.

Corzine said he wants the extra money to be used on “much-needed property tax relief.”

Corzine said new figures show the tax amnesty brought in $600 million so far. State officials had anticipated $200 million.

“We expected to pass the budget today,” Corzine said at a Statehouse news conference. “This extraordinary development must be appropriately considered by the Legislature.”

The Democratic governor said both budget committees will vote on a revised spending plan on Monday, with final votes in the Senate and Assembly a week from today.

Corzine was clear on where he wanted the new money spent, saying “in the strongest possible terms,” that it should “provide middle class homeowners with much-needed property tax relief…”

He stressed that as the budget gap widened because of the economy, the last thing he cut from the proposed budget were tax rebates.

“Now that we’ve recovered some lost revenues, the first thing we will restore is some property tax relief,” Corzine said.

Cross-posted at Red County and Conservatives with Attitude!

Assemblywoman Charlotte Vandervalk and Assembly candidate Bob Schroeder took aim at Governor Corzine’s irresponsible, anti-middle class, pro-union budget today. From PolitickerNJ.

“Oink!, Oink!”: Corzine uses Bergen taxpayers as personal piggy bankBy Matt Mowers

Hillsdale – Responding to Governor Jon Corzine and the Democrat state legislature’s proposed FY2010 budget plan to eliminate the property tax rebate and the property tax deduction on middle class families, Assemblywoman Charlotte Vandervalk and candidate for Assembly Bob Schroeder released the following statement: 

“I will proudly vote for Bergen County taxpayers by opposing Jon Corzine’s reckless budget. The Governor’s budget wastes our tax dollars to pay for political patronage and special interest contracts.  Middle-class taxpayers are at the breaking point and this budget could well put them over the edge,” said Assemblywoman Charlotte Vandervalk. 

Bob Schroeder, a Councilman in Washington Township and Hillsdale businessman added, “This is the eighth year in a row in which the budget contains new taxes, fiscally unsound debt practices and one-shot budget maneuvers. Jon Corzine is using Bergen County taxpayers as his personal piggy bank to pay for bureaucrats’ spending projects and political patronage. If I ran my business the way Jon Corzine runs New Jersey, we would go bankrupt every year.” 

Governor Corzine and the Democratic-controlled legislature have proposed eliminating the property tax deduction on families who earn $150,000 or more, eliminating the property tax homestead rebate for nearly all homeowners, and settled on a sweetheart deal which prevents any layoffs of taxpayer-funded state employees – a group whose representative unions have provided unwavering support for the Governor and are expected to again in this year’s campaign.  

 “The Governor’s budget plan would be especially devastating to the taxpayers of the 39th Legislative District.  Rather than face the real issues, Governor Corzine has decided to borrow, tax, and spend his way through the 2010 fiscal year for his own political benefit and without any long term budget solutions,” stated Vandervalk. 

“The Governor refuses to admit what all taxpayers know: that New Jersey has fundamental budget problems that will not be fixed by gimmicks and political grandstanding,” said Bob Schroeder.  “It is time we put New Jersey on a path toward fiscal sanity. Together, Assemblywoman Vandervalk and I will work with members of both political parties to bring fiscal responsibility back to New Jersey and finally deliver relief to taxpayers.” 

Bergen County remains a key battleground in the upcoming gubernatorial election. It will also be important for Republicans to maintain the D-39 seats in Bergen County if they stand any chance of capturing the Assembly.

Cross-posted at Red County.

Senate Republicans are warning about several provisions of the Corzine FY2010 budget which pose grave threats to our state’s economy.

A Partial List of ‘Governor Deficit’s’ Time Bombs for Taxpayers

Republican Senate Budget Officer Anthony Bucco warned that passage of Governor Corzine’s 2010 budget will pave the way for the worst budget crisis in state history. Effects of this crisis will be felt for years, Bucco predicted.

“New Jersey state government will face the worst, most devastating fiscal crisis in its modern history starting next year,” Senator Bucco said. “To create the illusion of a lower budget, Governor Corzine has deferred billions of dollars in expenses that will create unprecedented deficits. We should not approve this fiscally irresponsible legislation.”

“Governor Deficit’s” time bombs for taxpayers include:

· The Corzine Pension Deficit – Governor Corzine’s budgets have underfunded the pensions off teachers, police officers, and other government employees. The total during his administration, including for fiscal 2010: More than $7.5 billion. This includes $6.5 billion in unpaid state contributions, and incredibly irresponsible legislation this year that allows municipalities to defer more than $1 billion in payments to the funds.

· The Corzine Federal Aid Deficit – Governor Corzine has relied on $2.2 billion in one-time federal stimulus aid to create the illusion he is cutting that much in spending. He didn’t cut this spending. He merely used federal aid to pay state bills. Next year, that federal money will not be available. The governor hasn’t provided an answer on how he will fill this $2.2 billion addition to next year’s deficit

· The Corzine ‘Temporary’ Tax Deficit – The governor is relying on more than $1 billion in tax increases this year that he is labeling “temporary.” He is raising the income tax and eliminating the deductibility of property taxes for many middle class residents. Again, the governor hasn’t told legislators what he plans, if anything, to eliminate this $1 billion hole next year.

· The Corzine Property Tax Rebate Deficit — More than 1.7 million New Jersey homeowners who got rebates in the past will not get them. The governor says the cancellation of rebates is temporary. He doesn’t say where he will find the $1 billion needed to restore them.

· The Corzine Unemployment Fund Deficit – Governor Corzine will borrow $1.6 billion from the federal government because of past raids on the unemployment benefit fund. He has no announced plan for how he will pay this loan back.

· The Corzine Debt Service Deficit – The governor will skip $450 million of payments on bonds next year. He hasn’t said one word on how much extra this will cost taxpayers over the long haul, or where he intends to find the money to pay for the borrowing in the future.

· The Corzine Biden Buyoff Deficit – The governor has promised a 7 percent pay increase to state workers, half that will come 12 months from now and the other half in 18 months. This will cost the state $350 million. Again, the Governor has committed to a plan that will cost taxpayers for decades without finding a way to pay for the expense.

Of course, it would be nice if lawmakers could actually see a finished product of the budget before voting on it. So, much for the transparency Corzine promised us as well.

(h/t Alice’s Restaurant Blog)

Cross-posted at Red County.

The state budget is going to be another $1.5-2 billion short, but Corzine is throwing $29.7M of the “stimulus” dollars at the New Jersey’s Safe Streets and Neighborhoods program?

Of the almost $30 million, Milgram spokesman David Wald said most of the money, $13.4 million, will go directly to law enforcement efforts like anti-gun and gang initiatives. Another $5.7 million is for prevention programs like counseling, $4.6 million will be spent in an effort to reduce the number of ex-offenders returning to prison, and $5 million is earmarked for information systems, such as automated fingerprint technology.

I thought the stimulus was supposed to create jobs and boost an ailing economy? How does any of this create a single job?

If the Governor had an ounce of care for New Jersey’s taxpayers he’d be using this money to keep property taxes in check. Instead, in the face of the worsening budget situation, elimination of the Homestead rebate and the property tax reduction, as well as state aid to towns remain directly in Corzine’s crosshairs.

TRENTON, N.J. – Even politically popular programs like property tax rebates and education spending could fall victim to New Jersey budget cuts as Gov. Jon S. Corzine and lawmakers look for ways fill an ever-deepening revenue hole.

The Democratic governor isn’t yet saying where he’ll propose the cuts, but lawmakers point to a few places as the most obvious: state aid to towns and cities and proposed education spending increases, as well as eliminating property tax rebates and property tax deductions.

Essentially, this will be a triple whammy on New Jersey taxpayers and homeowners, as cuts to state aid will cause towns to ask us to pony up even more. It will hardly be stimulating when strapped New Jersey taxpayers have to fork over thousands more because Corzine refuses to make the tough choices to cut government.

Honestly, it’s amazing to me this Governor is even in the 30% range when it comes to his re-elect numbers. The man is completely detached from reality and cares not a whit about how the middle class is being suffocated in this state.

Cross-posted at Conservatives with Attitude! and Red County.

As if the news for New Jerseyans couldn’t get worse, it does. The latest tax revenue projections indicate that the state’s take will be even lower than expected. Here’s the scoop from NJBiz:

MONROE — Gov. Jon S. Corzine will soon drop another budget bombshell as a “frightening” revenue shortfall imperils the state’s spending plans, New Jersey Chief Counsel William J. Castner Jr. said this morning.

Reduced sales tax collections and other revenue retreats driven by the weak economy already spurred Corzine to propose spending cuts and tax hikes, but the latest projections indicate the state’s revenue flow will shrivel even more.

“The governor will likely make a formal announcement [about further budget revisions] soon,” said Castner, who addressed about 50 business owners today at a New Jersey Chamber of Commerce breakfast held at Forsgate Country Club. “The revenue numbers that are coming down the pike are frightening, and all options will be on the table.”

He declined to detail the latest revenue shortfall, but Castner did say the state is “committed” to spending cuts and to taking other steps to rein in the budget, which currently stands at $29.8 billion.

The plan for the year beginning July 1 already shaves about $3 billion from the current budget — but increases employer payroll taxes, suspends property tax rebates for households making more than $75,000 and institutes a one-year income tax increase on individuals making more than $500,000.

“We’re aware of the financial challenges facing the state, but we don’t want to see the administration raise taxes and plug the budget gap on the backs of business owners,” said Jim Leonard, legislative lobbyist for the New Jersey Chamber of Commerce.

“Businesses are already facing tax hikes in the form of increased state unemployment insurance and the loss of the personal property tax deduction,” which may be used by sole proprietors, limited-liability partnerships and other business structures, he said. “We would like to see a re-evaluation of all budget programs. Nothing should be exempt” from possible spending cuts.

So, here’s the bottom line. New Jersey taxpayers are tapped out. The well has run dry and we can’t afford what Corzine wants. And it’s time for him to face reality and cut the size and scope of our state government.

Of course, I will not be holding my breath. Castner’s statement that ”all options will be on the table” tells us all we need to know – Corzine will continue to stick it to the New Jersey taxpayer while protecting his precious government workers. Unfortunately, this is about the only thing NJ taxpayers will be able to take the bank.

{UPDATE} Budget is another $1.5B-$2B short

Cross-posted at Conservatives with Attitude! and Red County.

…so can you Governor Corzine. Michael Bloomberg is one of my least favorite politicians but at least he’s showing some spine against the unions.

Mayor Bloomberg is threatening to lay off up to 7,000 city workers, saying municipal unions and state officials haven’t done enough to help New York balance its budget.

Budget Director Mark Page told agency heads Wednesday to cut $350 million from their budgets, saying previous cuts of $3.1 billion starting July 1 weren’t enough.

“This next step would most likely rely heavily on additional head count reductions, whether through attrition or, as is more likely, through layoffs,” Page wrote.

“It is expected that these savings could result in a reduction of as many as 7,000 positions citywide.”

Bloomberg’s press team refused to discuss the letter.

“While it’s a letter addressed to the agency heads, it’s a message being sent to the union leaders,” said Charles Brecher of the Citizens Budget Commission, “and to a certain extent the state Legislature.”

The mayor has asked municipal unions to pay for 10% of their health care costs and find additional health cost reductions to save $557 million and avoid layoffs.

Looks like even more pain ahead for New Jersey taxpayers. According to an article in the Star-ledger, Governor Corzine will need to cut another $105M for next year’s budget.

An analysis released yesterday on the proposed budget predicts tax collections will come up $605 million short of what’s needed to cover the remainder of the current budget year and the new one that begins in July.

If this latest revenue estimate holds true, the shortfall would eat up the $500 million in surplus Corzine has built into his proposed budget and require $105 million in new cuts or tax increases since the state constitution mandates a balanced budget.

“The small, projected year-end balance would be transformed into a deficit,” said David Rosen, budget officer for the nonpartisan Office of Legislative Services.

Rosen said new tax data the governor did not have when he presented his budget six weeks ago indicates revenue collections will come up $383 million short of Corzine’s projections for the budget year that ends in June. Corzine’s budget will be another $222 million short for the fiscal year that begins in July, he said.

“There aren’t a whole lot of options,” he said.

Of course, not “a whole lot of options” in liberal-speak means more tax increases are right around the corner. If one thing is profoundly clear at this point, it’s that the Democratic machine in New Jersey is in denial and refuses to take the necessary steps to cut the size and scope of our bloated State government.

Corzine’s budget proposals do nothing of the sort. In fact, as detailed in an article in yesterday’s Asbury Park Press, Corzine’s budget is chocked with gimmicks and “one-shots.”

Corzine’s claim that his proposed budget spends only $29.8 billion is fiction. The claim disguises the fact that he cut more than $2 billion from current spending only to reinstate the cuts by using an equal amount of temporary federal aid. The federal aid and the spending it supports, however, do not appear in the proposed budget. In reality, Corzine’s proposed spending plan totals at least $31.9 billion.

The federal money, however, won’t be available for the next budget. This use of federal aid rivals the notorious one-shot gimmicks of the McGreevey years.

Half of the federal money will be used to replace a $1 billion cut Corzine has made to state aid to local school districts. If that fiscal wizardry wasn’t bad enough, Corzine also used the federal money to increase aid to some school districts. At a time when state revenues can’t support the existing aid formula, Corzine recklessly used one-shot revenues to extend the state’s aid obligation to some school districts.

While the federal aid is the largest of the one-shots, it’s not the only one. Corzine proposed tax increases totaling more than $900 million, but they are structured to be available for one year only. One-year tax increases are better than permanent tax increases, but they will create a large gap that must be filled next year.

And he’s proposed to raid numerous special purpose funds for more than $100 million. The raids probably can’t be continued in the next budget. In total, more than $3 billion in revenues in Corzine’s spending plan won’t be available for the fiscal year 2011 budget.

His so-called spending cuts don’t withstand scrutiny either. The single largest “cut” reduced by $900 million the state’s contribution to the several public employee pension systems. But this money is owed to the pension funds whether or not it’s paid in the next budget. Corzine isn’t reducing actual spending, but rather deferring a financial obligation to the future.

A few words come to mind regarding Governor Corzine’s approach to managing the state’s pension obligations: shameful, reckless and irresponsible being the foremost in my mind. I’ve posted regarding Corzine’s pension deferral scheme earlier this year, but now the situation looks to be even more dire. In order to pay for the state’s growing pension obligations, Democrats are seeking to fund the system by buying toxic assets – the very same approach that led to the collapse of firms like Bear Stearns. I recommend that you read this article and this blog post on the subject at Red Alerts.

Just like the donkey that symbolizes their part, Corzine and the Democrats are stubbornly refusing to deal with reality. We can’t continue the way we are going. The money isn’t there. We need to drastically cut government and government spending. That is the only solution to fix our mess. Unfortunately, instead of putting the breaks on this runaway train as it is about to run off the tracks, Governor Corzine and the Democrats are speeding it up and leading New Jersey toward economic ruin.

Cross-posted at Conservatives with Attitude! and Red County.

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.

As a conservative, this story almost makes me chuckle.

New Jersey, believe it or not, actually has a law requiring funding for the arts. The law has a minimum requirement for each fiscal year. For next year, the minimum amount of funding is supposed to be $16M bucks.

Now, with the state in a fiscal mess, Corzine decided to balance the budget on the backs of starving artists by, illegally, underfunding the arts by $1.6M. As usual, when liberals don’t like a law they just ignore it. So, former Governor Kean jumps into the fray and has threatened to sue in order to force Corzine’s hand. 

Now, I understand the political reasons for Kean attacking Corzine on this, but as a conservative I have to wonder what kind of Republican favors using taxpayer money to support something the government should not be involved in at all.

Governor Kean, you ought not to be pushing for another $1.6M for the arts. You ought to be pushing to have the law requiring this funding repealed so that $16M of taxpayer money is saved. See, that’s what Republicans are supposed to due – keep taxes low and not waste our money on things like this which should be left to the marketplace.

Cross-posted at Conservatives with Attitude! and Red County.