Morrisville, Pa. — The bridge spanning the Delaware River connects New Jersey’s capital with this town where the nation’s most interesting governor occasionally eats lunch at Cafe Antonio. It also connects New Jersey’s government with reality.
The bridge is a tutorial on a subject this government has flunked — economics, which is mostly about incentives. At the Pennsylvania end of the bridge, cigarette shops cluster: New Jersey’s per-pack tax is double Pennsylvania’s. In late afternoon, Gov. Chris Christie says, the bridge is congested with New Jersey government employees heading home to Pennsylvania, where the income tax rate is 3 percent, compared to New Jersey’s top rate of 9 percent.
There are 700,000 more Democrats than Republicans in New Jersey, but in November Christie flattened the Democratic incumbent, Jon Corzine. Christie is built like a burly baseball catcher, and since his inauguration just 13 weeks ago, he has earned the name of the local minor league team — the Trenton Thunder.
He inherited a $2.2 billion deficit, and next year’s projected deficit of $10.7 billion is, relative to the state’s $29.3 billion budget, the nation’s worst. Democrats, with the verbal tic — “Tax the rich!” — that passes for progressive thinking, demanded that he reinstate the “millionaire’s tax,” which hit “millionaires” earning $400,000 until it expired Dec. 31. Instead, Christie noted that between 2004 and 2008 there was a net outflow of $70 billion in wealth as “the rich,” including small businesses, fled. And he said previous administrations had “raised taxes 115 times in the last eight years alone.”
So he closed the $2.2 billion gap by accepting 375 of 378 suggested spending freezes and cuts. In two weeks. By executive actions. In eight weeks he cut $13 billion — $232 million a day, $9 million an hour. Now comes the hard part.
Government employees’ health benefits are, he says, “41 percent more expensive” than those of the average Fortune 500 company. Without changes in current law, “spending will have increased 322 percent in 20 years — over 16 percent a year.” There is, he says, a connection between the state being No. 1 in total tax burden and being No. 1 in the proportion of college students who, after graduating, leave the state.
Partly to pay for teachers’ benefits — most contribute nothing to pay for their health insurance — property taxes have increased 70 percent in 10 years, to an average annual cost to homeowners of $7,281. Christie proposes a 2.5 percent cap on annual increases.
Challenging teachers unions to live up to their cloying “it’s really about the kids” rhetoric, he has told them to choose between a pay freeze and job cuts. Validating his criticism by their response to it, some Bergen County teachers encouraged students to cut classes and go to the football field to protest his policies, and a Bridgewater high school teacher showed students a union-made video critical of him. Christie notes that the $550,000 salary of the executive director of the teachers union is larger than the total cuts proposed for 190 of the state’s 605 school districts.
He has received some support from the Democratic president of the state Senate, Stephen Sweeney, a leader of a local ironworkers union. This suggests waning solidarity between unionized private-sector workers who are weary of paying ever-higher taxes to enrich unionized public employees.
New Jersey’s governors are the nation’s strongest — American Caesars, really — who can veto line items and even rewrite legislative language. Christie is using his power to remind New Jersey that wealth goes where it is welcome and stays where it is well-treated. Prosperous states are practicing, at the expense of slow learners like New Jersey, “entrepreneurial federalism” — competing to have the most enticing business climate.
Christie’s predecessor addressed a huge unionized rally of public employees, vowing to “fight for a fair contract.” Who was he going to fight? The negotiator across the table would be ... himself.
Saying “subtlety is not going to win this fight,” Christie notes that New Jersey’s police officers, the nation’s highest paid, can retire after 25 years at 65 percent of their highest salary. In the state that has the nation’s fourth-highest percentage (66) of public employees who are unionized, he has joined the struggle that will dominate the nation’s domestic policymaking in this decade — the struggle to break the ruinous collaboration between elected officials and unionized state and local workers whose affections the officials purchase with taxpayers’ money.
— George Will is a columnist for Washington Post Writers Group. georgewill@washpost.com
Comments
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cato_the_elder (anonymous) says…
What Christie correctly recognizes is that New Jersey has been going the way of California, which has already gone the way of Greece, which has ruined its economy by allowing public employee unions to take over the country. Congratulations to Governor Christie for doing what he said he would do when he ran for office, and here's hoping that a Governor with that level of fortitude can be elected in California.
just_another_bozo_on_this_bus (anonymous) says…
I agree, cato. We need to get back the Golden Era when the country was run by an elite of the greatest minds from finely paneled corporate boardrooms. You know, the best and the brightest who will make perfect decisions because it's done strictly in their narrow personal interests according to natural laws, and the rest of us losers will be happy with whatever crumbs they choose to throw us.
cato_the_elder (anonymous) says…
No, Bozo, just looking for a happy medium. California's clearly bankrupt and out of control, and many other states, including New Jersey, are headed in the same direction. If this doesn't get reversed, more states will become as insolvent as California is. Believe it or not, Bozo, that wouldn't be a good thing for any of us, especially those of us who pay taxes. Just out of curiosity, did you pay any income taxes for calendar year 2009?
just_another_bozo_on_this_bus (anonymous) says…
" California's clearly bankrupt and out of control,"
California's and Kansas's budget shortfalls ((relative to their populations) are nearly identical. The causes of these budget shortfalls are numerous, so pinning the cause on public employee unions is simplistic at best, and therefore can't lead to anything like a solution.
If you want to find a single cause for California's budget problems, it lies more accurately with Prop 13. And similarly, Kansas budget problems lie more with the tax cuts during the 90's than with anything that employee unions have done (which mostly amounts to requesting to be paid a livable wage.)
cato_the_elder (anonymous) says…
Bozo, answer my question please: Did you pay any income taxes for calendar year 2009?
bkgarner (Brent Garner) says…
Cato:
Am not answering for Bozo. He can answer for himself if he chooses to. However, I have been mulling for sometime the statement that almost 50% of citizens paid no income tax for 2009. This headline was trumpetted on Drudgereport.com. I read the article and it seemed to suggest that most people getting refunds were probably in the no tax paying category. However, traditionally, a tax refund means you overpaid your taxes and are getting back the difference between what you paid and what you should have paid. But, with this current administration and all the tax credit gimmicks and such I no longer find it easy to determine how to measure. A tax refund could now be part overpaid taxes and part refundable credits. So, to address your question, how does one calculate whether or not one actually paid taxes?
cato_the_elder (anonymous) says…
BK, I'm simply asking Bozo whether he paid any income taxes for calendar year 2009. If he had a job in 2009 and taxes were withheld from his paycheck, he paid taxes. Unless he gets a refund that exceeds the amount of all the tax that has been withheld from his paycheck, which is highly unlikely, he has paid taxes. Most people get "refunds" for only a small part of what has been withheld, and they are thus net taxpayers. That's why it's shocking to read that 47% of the citizenry pays no taxes on a net basis, and that the rest of us are thus in effect supporting them. While there are undoubtedly some high earners each year who pay no net tax because they've been able to shelter income, since the mid-1980's when the tax laws changed under Reagan that's been much more difficult to do. Nowadays it most often occurs only if one has had extraordinary deductions of one kind or another for a given year. Most gainfully employed citizens who enjoy reasonably good earned incomes get soaked to the gills every year, and I strongly suspect that you may be with me in that category. I'm also confident, based on your prior well-reasoned posts, that you are well aware of this.