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Archive for Thursday, July 6, 2006

New Jersey taxes are no joke

July 6, 2006

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An early joke about New Jersey is attributed to Ben Franklin: "New Jersey is like a beer barrel, tapped at both ends, with all the live beer running into Philadelphia and New York." Maybe you had to be there.

A contemporary joke is on display in Trenton where the majority Democratic legislature and Gov. John "I promise not to raise your taxes" Corzine are in a fierce battle over the state budget, which last weekend led to a government shutdown reminiscent of the 1995-96 closings of the federal government. A decade ago, it was a battle between a Republican Congress and a Democratic president. Now, in New Jersey, it's a fight among Democrats over how much taxes should be raised (and which ones) and how much the legislature and governor will increase spending.

A recent Wall Street Journal editorial summed up New Jersey's fiscal problems: "The Garden State has raised taxes nearly every year since 2000 and nearly twice as much per resident as the next highest tax state. Yet, no surprise, Trenton still has the biggest budget crisis outside of the states ruined by Hurricane Katrina. This taxing binge hasn't balanced the budget because state expenditures have ballooned by $8 billion, or about 45 percent, in six years."

Corzine claims new spending is necessary because state schools and services are under-funded and that's why he "needs" to raise taxes again, this time by a proposed $1.5 billion. Schools and services are anything but under-funded, but Corzine carries the Democrat's tax-and-spend gene and he is not about to cut taxes or reduce spending in the face of facts.

Republicans see a grand political opportunity in New Jersey. A new Quinnipiac poll has found 46 percent of voters regard taxes as the largest problem faced by the state. As the Journal notes, that's "the highest number for any issue the polling firm ever found in New Jersey."

Republicans have presented the governor a detailed list of spending cuts, totaling $2.2 billion. Corzine wants to increase state spending by a whopping $2.8 billion and leave the present bureaucratic government structure largely untouched.

Democratic infighting isn't over tax increases; it's about which taxes to raise. Most Democrats oppose an increase in the state sales tax, fearing political reprisals. They prefer to boost already high property taxes instead. Republicans want to cut taxes and reduce spending, a proven formula for economic stimulation, not to mention increased cash flow to the treasury.

The more New Jersey raises taxes, the faster the exodus of businesses to other states, thus draining the state of tax receipts and leading Democrats to raise taxes again to make up for the lost revenue. It then becomes a vicious circle, as even more businesses vacate. According to the Census Bureau, 60,000 more people left New Jersey than moved to the state in just the year 2000.

In 1990, New Jersey went through a similar economic crisis. Then-Gov. Jim Florio pushed through the biggest tax increase in state history. The economic downturn that resulted led to Florio's ouster. Republican Christine Todd Whitman replaced him. If citizens decide to try another Republican governor, they should give him, or her, a Republican legislative majority made up of fiscal conservatives.

If Tony Soprano ran his businesses like New Jersey Democrats run the state, he'd be bankrupt. Maybe someone with Tony's style and attitude should be put in charge. Otherwise, New Jersey and the Democrats who are ruining it will continue to be the butt of jokes like this one: Why are New Yorkers so depressed? Because the light at the end of the tunnel is New Jersey!

- Cal Thomas is a columnist for Tribune Media Services.

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