New Jersey’s new governor is determined to reverse the state’s “failed experiment”, which consists of taxes chasing deficits in an ever-ascending spiral. A Barron’s article does the most concise job I’ve seen of explaining what he’s up against, and why his efforts should be supported.
Photo: NY Post
Unlike his predecessors, Republican Gov. Chris Christie has recognized that high taxes were a problem, not the solutions to the state’s fiscal woes. The Tax Foundation ranks New Jersey as the highest in the nation in state and local taxes as a percentage of income. It’s especially bad for top earners: 4.4% of individuals account for 55% of personal income-tax revenue.
Even though the state faces a $10.7 billion deficit — equal to more than one-third of the total budget — in fiscal 2011 starting July, Christie has refused to raise taxes and further increase this tax burden. Indeed, he has recommended not renewing a 2% “millionaire tax” enacted by former Gov. Jon Corzine, so that the top state income-tax bracket will revert to 8.97%, still among the highest in the nation.
In addition, New Jersey homeowners pay the highest property taxes in the nation, $7,281 on average annually. That represents a 90% increase from 1999 to 2009 — a trend that is driving wealthy New Jerseyans to other states — mainly Florida, Pennsylvania and even New York, according to Boston College’s Center on Wealth and Philanthropy. As [municipal bond analyst Howard J.] Cure notes, for years the migration went in the other direction across the Hudson as heavily taxed New Yorkers sought relief in New Jersey.
When your budget deficit is more than a third of your total budget, you need more than tweaks and nudges to return to financial stability. I strongly suspect that some additional taxation will occur, but when your taxes are the highest in the nation, “no tax increases” is the right starting point for debate. In any discussion of New Jersey’s finances, the burden of proof should be on anyone who opposes spending cuts. After taking on the powerful teachers unions, I hope Christie continues to play hardball.
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I completely agree. Christie is the right man in the right place. The campaign was brutal and I'm glad he came out the winner. it's time to put away the scalpel and bring out the axe to deal with NJ's problems. That applies nationwide.
People keep talking about the $10B budget gap but that figure is meaningless. It has no bearing on the actual revenue taken in. Real cuts mean you look at the revenue and don't use it all, then send the unused portion back to the taxpayers.
Secondly, New Jersey does indeed have the nation's worst taxes. It also hasn't created private sector jobs in a decade. That's why the state needs tax cuts. Holding the line is nothing to praise. Christie said he would go through the budget line by line and cut. Unfortunately, he has done no such thing. In fact, his budget is higher than Corzine's when you realize that the property tax revates ($1.3B), school aid "cuts" ($840B) and municipal aid "cuts" ($420B) are nothing but deferrals of obligations. This is over $2B, which brings Christie's budget to roughly $1B more than Corzine's FY2010 budget.
Third, I keep hearing Christie is taking on the teachers union. Really? How? Is he renogotiating contracts? Nope. The idea that Christie is taking on the union is more rhetoric than reality. Yes, he's pressuring local school districts to make cuts which could result in a few layoffs, but those "cuts" are also going to result in massive suburban property tax increases.
Christie is not doing much of anything to help New Jersey. In fact, his budget is just more of the same.http://taxpayerminute.com/budget.pdf
Removed my comments, eh? Pathetic.
[Dear Readers: Below I've pasted the text of two comments (actually one comment submitted in two parts) by "MikeGSP", who listed http://www.americansforprosperity.org/new-jersey in the website field of the comment box. For some reason his comments got trapped in my spam filter, and yet the filter lists the comments as having been approved, so while my dashboard offers a link to "Unapprove" the comments, there is no link to "Approve" them.
I'm going to need to spend some quality time with the Akismet website, debugging the filter. But I want to get MikeGSP's comments on the record, along with my apology for the glitch. Text below here is from MikeGSP, originally submitted on the afternoon of 5-2-10.]
People keep talking about the $10B budget gap but that figure is meaningless. It has no bearing on the actual revenue taken in. Real cuts mean you look at the revenue and don't use it all, then send the unused portion back to the taxpayers.
Secondly, New Jersey does indeed have the nation's worst taxes. It also hasn't created private sector jobs in a decade. That's why the state needs tax cuts. Holding the line is nothing to praise. Christie said he would go through the budget line by line and cut. Unfortunately, he has done no such thing. In fact, his budget is higher than Corzine's when you realize that the property tax revates ($1.3B), school aid "cuts" ($840B) and municipal aid "cuts" ($420B) are nothing but deferrals of obligations. This is over $2B, which brings Christie's budget to roughly $1B more than Corzine's FY2010 budget.
Third, I keep hearing Christie is taking on the teachers union. Really? How? Is he renogotiating contracts? Nope. The idea that Christie is taking on the union is more rhetoric than reality. Yes, he's pressuring local school districts to make cuts which could result in a few layoffs, but those "cuts" are also going to result in massive suburban property tax increases.
Christie is not doing much of anything to help New Jersey. In fact, his budget is just more of the same.http://taxpayerminute.com/budget.pdf