South Brunswick Post: Balanced on the wrong backs

Friday, May 16, 2008
by Hank Kalet, Managing Editor

Balancing this year’s state budget just got a bit tougher.

State officials said this week that the revenue is expected to fall about $159 million short of figures already projected, meaning that we can expect Gov. Jon Corzine to place more spending cuts on the table.

The $33 billion budget he proposed earlier this year already cuts $2.7 billion in spending, with many of the cuts hitting those in the state that can least afford to be hit.

The cuts have engendered protests — on Monday, healthcare workers descended on Trenton to try and convince the governor and the state Legislature that the cuts threaten hospital care in the state.

Protesters, according to The Associated Press, carried signs “reading ‘Some Cuts Never Heal’ and ‘Imagine a Day Without Us,’ while many wore surgical masks that read, ‘These cuts make me sick.’”

Protesters “predicted shuttered hospitals, unemployed workers, eliminated services, longer drives and longer waits.”

The protests — like those of farmers against the elimination of the state Department of Agriculture or the campaign to keep the state from cutting public access to state parks — come as the governor attempts to plug a massive recurring budget hole and get the state’s finances back on track.

The governor has promised a tough road, with everyone sharing in the pain that his belt-tightening will require.

The problem is, however, that the pain is not being shared equally. The governor’s budget slashes programs targeted at those in need — a disgraceful approach, especially given that Gov. Corzine had earned a reputation as a staunch liberal while in the U.S. Senate.

The governor is not wrong to attack the recurring budget gap or to demand that revenues meet expenditures in all future budgets. The state has spent too many years — at least since the end of the Florio administration — balancing the budget by kicking the can down the road. The longer we ignore the recurring deficit — estimated at between $2 billion and $4 billion — the more it grows and squeezes other spending from the state budget.

Slashing hospital spending and college aid, however, is neither fair nor the most effective approach. Budget cuts that force hospitals to close or that make it more difficult for low-income students to attend college can only make the state poorer down the road, according to the Better Choices for New Jersey campaign (www.betterchoicesfornj.org), a coalition of 30 advocacy groups that is lobbying for a different approach.

The organization believes the proposed budget is shortsighted and will put an “unfair burden on those who struggle to keep bread on the table and a roof over their children’s heads,” Daniel Santo Pietro, executive director of the Hispanic Directors Association and a member of the coalition, said earlier this month.

The problem, the coalition says, is that the governor is focusing on spending to the exclusion of other issues.

The problem with New Jersey — as Jon Shure, president of New Jersey Policy Perspective, says — is “not overspending, but under-investing.”

Mr. Shure, who will be speaking at the monthly meeting of the League of Women Voters of Monroe Township on Monday, says the governor is “offering a dangerous over-simplification” by “suggesting that it is overspending and not under-investing” that has created the state’s budget crisis.

”It started with the repeal of the Florio sales tax increase,” he said last week, “and then, yes, the Whitman tax cuts, creating new programs without revenue, not funding pensions and then covering all of this by extensive borrowing. It is not overspending. It is playing games with the budget.”

Admittedly, Mr. Shure’s contention flies in the face of conventional wisdom. Trenton’s mantras have been “cut the budget” and “reduce spending” for the last several years with little thought given to a real change.

But real change requires moving from an 18th-century tax structure that relies on local property taxes to a more modern system, a broader-based tax — I favor moving to a greater reliance on a progressive income tax and the elimination of an array of tax loopholes for business.

This, of course, flies in the face of what has become the conventional wisdom, that New Jerseyans will never accept new taxes. This conventional wisdom, however, is based on the very same political calculus that got us into this mess in the first place. Governors and legislators of both parties have spent the last decade and a half making decisions based on fear of a backlash similar to the one that rocked the state Legislature in 1991 and tossed the majority to the Republicans.

The governor wants to improve the state’s fiscal health, but he has been unwilling to abandon the old calculus, taking new revenue off the table and instead letting spending drive the debate.

”The political climate right now is being measured with the only debate being about the cost of things,” Mr. Shure said. “The political climate changes when it is expanded to include New Jersey’s needs and the need to invest.”

If we don’t make the investments, he said, the exodus from the state that many have noted will only get worse.

"If people are being chased out by taxes, it is by property taxes and this budget will raise property taxes,” he said. “And if we don’t have a good transportation system, if we don’t have access to a higher education system, if we don’t have good healthcare or a good environment — that is why businesses leave the state.

"We are under-investing in things that in the long run determine how viable the state really is,” he said. “Either way, it is a budget that doesn’t look out for the long run.”

Originally published at: http://packetonline.com/articles/2008/05/16/south_brunswick_post/opinions/doc482c1d6617a13078384280.txt

Also published in The Cranbury Press.