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July 4, 2006

What US may learn from NJ budget mess....

By Constance Lavender

A short history of NJ/US budget imbalances


When former Congressman Jim Florio was sworn in as governor of New Jersey in January, 1990, the State of New Jersey was facing a fiscal crisis after years of tax cuts by Republicans which neither subsequent governors nor the state legislature bothered saving for a rainy day. The Republicans, following Ronald Reagan's lead, were engaging in what George H. W. Bush had called "voodoo economics:"

more services (increasing spending) + tax cuts (decreasing revenue) = deficits (debt)

The Republican Party, which for years was known for economic conservatism and personal liberty (expanding individual freedom) was in the process of transforming itself into today's Republican Party of fiscal irresponsibility (so-called trickle-down and supply-side economics) and anti-individualism/social conservatism (curtailing individual freedom).

Florio was facing an impossible fiscal situation: decreasing revenue from a decade of tax cuts and court-mandated initiatives to solve NJ social problems (like school funding and housing via the Abbott and Mt. Laurel decisions) that the state legislature had failed to address.

Asking for a tax increase was responsible public policy. The way Florio asked and initiated the tax increase was irresponsible politics. After promising not to raise taxes in the campaign, Florio asked for a several billion dollar tax increase on just about everything, including toilet paper. The result was a grassroots tax revolt fueled by rightwing radio extremists called "Hands Across New Jersey."

As a result of Florio's mishandling of the tax issue, the Republicans won control of both chambers in the state Assembly and paved the way for Florio's defeat and the disastrous term of Christie Whitman as NJ governor. Whitman, although popular, initiated the fiscal trickery that has resulted in the current budget mess. Whitman cut taxes by 30 percent while increasing state spending. She "paid" for the tax cuts, as required by the NJ Constitution which requires a balanced budget, by raiding the state public employee pension trust fund and increasing fees (a regressive tax increase) on services, like state car registrations, in some cases tenfold.

The Republicans--and many Democrats---in the state legislature went right along with the fiscal games. Today, Republicans, like State Senate Minority Leader, Leonard Lance, are quick to point out that they "opposed" Whitman's budget gimmicks, like raiding the pension system. But being "opposed" to raiding the pension system is not the same as "voting against" proposals, like Whitman's to raid such trust funds. The cynicism and hypocrisy is thick in Trenton.

Today Gov. Corzine realizes that revenue (taxes) must pay for expenditures (services). Something George W. Bush has stubbornly refused to practice as he runs the country into increasing debt, squandering President Clinton's legacy of a federal budget surplus.

New Jersey's legislators, persons like State Senator Littel, who Sen. Lance proudly pointed out, has served in the legislature for thirty-eight years, are part of the budget/fiscal problem, not its solution. For years the legislators have failed to grapple with equity in school funding, affordable housing, and budgetary restraint. The bill has finally arrived for years of legislative failure to address the needs of the state. New Jersey is the richest state in the nation, how come that wealth isn't trickling down to those New Jerseyans who need it?

Raising the state sales tax to pay for what New Jersey is spending is progressive and fair. Everyone--regardless of class, education, demographics---pays alike.

Submitters Website: http://www.blogger.com/profile/4236373

Submitters Bio:

Constance Lavender is an HIV-Positive pseudonymous freelance e-journalist from a little isle off the coast of Jersey; New Jersey, that is...

In the Best spirit of Silence Dogood and Benj. Franklin, Ms. Lavender believes that a free country is premised on a free press.