budget – Page 24 – Hank Kalet

Faux reform

At least Gov. Jon Corzine knows that the legislation he signed enacting a 20 percent tax credit is only a pebble in the ocean as far as the reforms needed in New Jersey.

“I’d be skeptical too, if I was a taxpayer. Until I see the results, it’s show-me time,” Corzine said, adding that those results will take years to happen. “The reforms take time. It’s not one of those things where you’re going to get instant gratification.”

Certainly not. The fact is that the legislation signed yesterday was a small Band-Aid on a huge problem — property tax bills that are growing at about 7 percent a year and that are already the highest in the nation; a tax system that reinforces the state’s economic disparities; a political system that rewards campaign contributors and ethically challenged legislators; too many towns and school districts; an illogical school funding formula. The list is long.

And it’s why, as the Asbury Park Press points out, the credits are far from the “landmark” reforms touted by the governor and Legislature.

The only thing remarkable about it is how Corzine and the Legislature believe voters will be fooled into thinking it is worthy of the adjective “landmark.” Clearly, they are counting on the gullibility of the electorate. All 120 seats in the Legislature are up for election in November.

Instead of reducing spending by cutting government programs and jobs, and bringing public employee salaries and benefits into the 21st century, they have opted for a shell game instead — demonstrating once again their low regard for the intelligence and attention span of the voter.

Would the Republicans do better? Doubtful. They had a decade in the majority to improve the system and all they came up with was an income tax cut that helped create the fiscal problems the state currently faces.

Jon Shure of New Jersey Policy Perspectives had it right in February when he wrote in an op-ed that so-called reformers dismissed the most logical proposals — an expanded state income tax, realignment of local and county governments — in exchange for what they thought was politically palatable. (Even those proved too extreme for the risk-averse Legislature.)

When we get beyond slogans and sound bites, New Jersey is left with this reality: we collect more from local property taxes than from the state sales and income taxes combined. It’s also true that the lower your income is in New Jersey the higher percentage of it you pay in the form of sales, income and property taxes combined. Real reform of the tax system would put all of this on the table. And it would also accept the fact that as bad as New Jersey’s tax system is (and it is) it is really a symptom of the larger problem: 566 municipalities and 613 school districts-an archaic, unsustainable structure more reminiscent of the Ottoman Empire than a 21st century state.

He describes “real reform” as “looking not just at how much New Jersey spends, but where we spend it and who we call on to pay it.”

An honest assessment of tax burdens that squarely confronts who pays how much, and in which taxes, would point the way out of the morass. It would recognize the value of raising and spending more of our resources at the state and even county level and less locally.

And it’s only likely to happen if we empower citizens — via a tax convention — to do the work.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick
The Cranbury Press Blog

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Delay levy cap indefinitely

Gov. Jon Corzine has signed several of the Legislature’s tax reform proposals (if you want to call them that), but he’s yet to sign what Trenton has pegged as the most important of the measures — the bill that would create the 20 percent tax credits and impose a 4 percent levy cap on municipalities, schools and county governments.

The governor ostensibily is holding out for a ban on dual-office holding in New Jersey, but he should take the time to rethink the proposed levy cap and push the Legislature to find more efficient and effective ways to hold local spending down.

Spending an afternoon talking about the budget with South Brunswick school officials puts the levy cap in perspective. The cap, as Superintendent Gary McCartney points out, applies to the total amount to be raised by taxes — regardless of whether the tax base grows (new houses, new warehouss, etc), and regardless of whether enrollment grows or an unexpected major expense (roof repair, for instance) is needed.

About 80 percent of the budget is personnel costs — either salary or health and retirement benefits. The rest is a mix of facilities and supplies, including heat, electric and other utilities costs.

For the most part, the district has done a solid job in recent years of keeping spending increases to a minimum, adding staff only to keep teacher-student ratiosstatic, to man new buildings or to provide newly mandated programs.

But education is expensive — the average house with two children in school might generate $5,000 to $10,000 in school taxes but costs the district more than $20,000, a net loss. That means rising school taxes.

The new cap law attempts to control spending by attacking the sympton (rising taxes), without addressing its causes (among them single-source funding and not enough state financing, too many school districts) — setting limits without giving school districts, in particular, real tools to stay within the limits without slashing instructional programs.

It’s a prescription with the potential for way too many dangerous and debilitating side-effects. It needs to be changed.

South Brunswick Post , The Cranbury Press
The Blog of South Brunswick
The Cranbury Press Blog

E-mail me by clicking here

Cut down the trees

In New Jersey, under both political parties, Christmas has traditionally occurred in July.

And while there is talk in Trenton about ending the practice, comments by Democratic State Party Chairman Joe Cryan, an Assemblyman from Union County, make it clear that ending it will be difficult at best.

As questions swirl around hundreds of millions of dollars lawmakers added to the state budget last year, the head of the Democratic State Committee defended the grants Tuesday by calling attention to the role state aid plays in supporting causes such as cancer research, autism services and children with disabilities.

Assemblyman Joseph Cryan, D—Union, pointed to the more than 70 organizations signed up to testify during a day-long budget hearing as evidence of the state’s needs. Many of those needs, he argued, are served by grants.

“Media accounts tend to focus on the very limited, narrow scope of the negatives as opposed to the very broad brush of the positives for the people of New Jersey,” said Cryan, who sits on the Assembly Budget Committee and heads the state Democratic Party.

But as The Asbury Park Press writes, the issue is not the usefulness or necessity of the specific programs, but a process that is conducted under cover night and that legislators may use to woo local voters:

Some of them were worthy. But the process for doling them out is anything but.

The grants last year — as in the past — were handed out at the 11th hour with no public scrutiny. Most of them went to Democratic districts — often to benefit legislators’ friends, relatives, employers or pet causes.

And it costs the state loads of money and, like so much of what happens around New Jersey, erodes trust in government. The practice has to end.

South Brunswick Post , The Cranbury Press
The Blog of South Brunswick
The Cranbury Press Blog

E-mail me by clicking here