I just read Gov. Corzine’s very candid budget speech, and as expected, he told us, “The state is pretty much broke;” “We have been spending more than we take in;” “Our credit standing …has gone from AAA to near the bottom.”
Later he added, “New Jersey’s state finances need to get back on to a sound long-term footing, consistent with the values of our people…My answer is as simple as old-fashioned arithmetic.”
He went on to explain that as we are going, we will have a $4.8-billion deficit next year.
To address our situation, he said all the logical things – “We must stop spending more than we take in;” “We must stop borrowing;” “We must rely…on cuts in spending.”
If he had stopped here, I would have given him a hearty “amen,” but he added, “We have to raise the sales tax.”
In order to gain a perspective on state finances in the past vs. today, I went digging through a couple of recent issues of the Tax and Revenue Outlook of the Office of Legislative Services of the New Jersey Legislature.
In 1969, New Jersey operated on $1.2 billion; since that time, our population has risen 15 percent, the consumer price index is up 460 percent. So if we factor these things in, we should have a state budget of just under $8 billion.
The budget Gov. Corzine tells us we cannot possibly live with is about four times that amount: over $30 billion. Over the last 30 plus years, we kept adding more taxes but our financial situation got worse, not better.
The state automatically gets more money, even if sales and income tax rates stay the same. As people buy more – the state collects more. As people earn more – the state collects more. Simple as pie, the state gets more as we earn and spend more.
Conversely, as taxes increase, people have less to spend and state revenues decline. It’s a historical fact. Higher taxes hurt individuals and the state.
We all know someone who is always broke and is perpetually knocking on the door for money. You feel bad and you get a ache in the pit of your stomach. It is hard to tell a Good Time Joe – “No!” – but you have to.
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Our legislature has clearly demonstrated it cannot manage money any better than Good Time Joe and it’s past time to ask, “What did you do with the money we already gave you, and how is giving you yet-more going to help?”
When does a drunk ever have enough booze? When does an addict ever have enough drugs?
When the state gets $30 billion when $8 billion ought to do and still screams for more – the state is addicted. It is time for us to tell Corzine and the pols in Trenton the same thing we tell a hard-luck friend: “Sorry, Good Time Joe, but you are just going to have to work it out.”
Art Hall, publisher
Send Comments to: FromThePublisher@CMCHerald.com
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