Tag: budget

Tough talk, but is it honest?

Gov. Chris Christie’s budget speech yesterday has been given high marks for toughness — even as level-headed a columnist as The Star-Ledger’s Tom Moran bought the governor’s reform rhetoric. But was this speech about reform? Was it about rebuilding the state’s fiscal ship and setting it sail once again?

Budgets, as we wrote in our editorial this week, are about policy. Money underscores the priorities. Jon Corzine, for instance, offered budgets that were essentially progressive — expanding the earned-income tax credit and children’s health care, for instance.

Chris Christie’s budget, on the other hand, is a fairly straightforward example of the Grover Norquist, anti-government approach — given a push by the state’s fiscal woes. Consider the cuts — to education, to municipal aid, to higher education, the earned-income tax credit, unemployment insurance, along with a tax cut for those making $400,000 or more.

Christie is, based on the numbers, a rather doctrinaire conservative.

Christie knew what he was doing when he crafted his speech, using a series of conservative memes that have become ingrained in our political culture to push his critics back on their heels and to prepare make it seem as though anyone who opposes his so-called reforms is part of the problem.

The defenders of the status quo have already begun to yell and scream. They will try to demonize me. They will seek to divide us rather than unite us. But even they know in their hearts, if not yet in their minds – it is time for a change.

The language is key. The governor is the one doing the demonizing, getting out in front of the train and beating his critics to the punch. It is not the governor who is yelling and screaming and dividing, but the teachers’ union, the “defenders of the status quo.”

Some are saying, by their choice of policies, that we should descend further into debt and deficit, and risk driving more people out of the state with “temporary” tax increases that always turn out to be permanent.

Some are saying — the straw man, the critic without a face, the one that cannot be defended. Who makes up this “some”?

No one is arguing for more debt and there is significant debate over the accuracy and reliability of the studies showing this massive outflux, as the governor calls it. And not all critics are defenders of the status quo.

Let’s be honest here. The state’s budget problems, as the governor acknowledges in passing, are at least 20 years in the making. They are bipartisan, created by a series of politicians unwilling to speak clearly and frankly: Since the massive overreaction that greeted Gov. Jim Florio’s tax increase in 1990, New Jersey politicians have been tax averse. At the same time, they have been unwilling to say no to anyone, offering often necessary services and putting their cost on the credit card.

If you want services, you must pay for them. That’s what our elected officials should have been saying for the last two decades. If you’re not willing to pay, be prepared to give up the services you have come to value. It is a simple equation.

So Christie is not wrong when he says the bill has come due. But his rhetoric — his claim to be the fiscal avenger — rings hollow. He appears less interested in fiscal health than in breaking the backs of the public employee unions, more concerned with shrinking not only state government, but local government and shifting much of its responsibilities to the private sector.

Christie’s tought talk masks what I see as bad faith. He is not speaking frankly, but offering the kind of false promises offered by his predecessors. I can cut government down to size without affecting services, without affecting the quality of your children’s education, the length of your commute, the freshness of your air. And if these things are affected, it is not his fault or the fault of his brave budget-cutting administration. It is the fault of the New Jersey Education Association and the other public sector unions.

Christie talks tough, but he isn’t being frank or honest. Honesty demands that he acknowledge the devastating impacts of his budget cuts, of the sacrifices he so blithely says are being spread evenly and fairly. It demands that he take responsibility for the fallout.

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On the state budget address

Our editorial this week is on Gov. Chris Christie’s budget address this afternoon. The budget he has prepared, as I said yesterday, is focused on deficit reduction but also on the fairly standard conservative budgetary tropes — low taxes, spending cuts, assaults on public employee unions. It is, in a word, a disaster.

David Leonhardt writes about the phenomenon that Christie and his conservative allies have fallen prey to — a growing disconnect between taxes and the services we demand. Leonhard is writing about the federal budget, which can remain in deficit. But what he says about the federal budget goes for the states — and New Jersey — as well.

As a society gets richer, its tax rates tend to rise.

This idea is known as Wagner’s Law, named for the 19th-century economist who came up with it. Citizens of richer societies generally prefer more government services, Adolf Wagner explained. With their basic needs met, they want a military to protect them, good schools for their children, comfortable retirement for the elderly, medical care even when it isn’t profitable and a strong social safety net.

Sure enough, the United States followed this path for most of the last century. In 1900, federal taxes amounted to just 2 percent of gross domestic product. By 2000, the share had risen to 21 percent.

Over the last couple of decades, though, we have repealed Wagner’s Law — or, more to the point, only partly repealed it. Taxes are no longer rising. They fell to 18 percent of G.D.P. in 2008 and, because of the recession, to a 60-year low of 15.1 percent last year.

Yet our desire for government services just keeps growing. We added a prescription drug benefit to Medicare. Farm subsidies are sacrosanct. Social Security is the third rail of politics.

This disconnect is, far and away, the main reason for our huge budget problems. Yes, the wars in Iraq and Afghanistan, the recession and the stimulus have all added to the deficit. But they are minor issues in the long run. By 2020, government spending is projected to equal 26 percent (and rising) of G.D.P., mostly because of Medicare and Social Security. Taxes are on pace to equal just 19 percent.

New Jersey matches this pattern. Following Gov. Jim Florio’s attempt in 1990 to raise taxes to address what then considered a huge shortfall, the state’s politicians have been been gunshy about taxes and taxpayers have been only too happy to encourage them, while also reaping the benefits of expanding and improving services.

We are now dealing with the fallout, and it’s not going to be pretty.

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Big bad budget voodoo

Gov. Chris Christie is serious about balancing the state’s budget. The only question is whether, in doing so, he removes what few reasons remain for living in New Jersey.

New Jersey is an expensive state in which to live. Taxes are relatively high, as is the cost of living.

But New Jersey has at least had some solid public services to offer — among them a top-of-the-heep educational system and one of the more expansive children’s healthcare safety nets around.

But all of that could change beginning with tomorrow’s budget address by Gov. Christie. In it, he is expected to reduce school aid by a collective $800 million, an astronomical amount that comes on the heels of last month’s cuts. The result is likely to be local layoffs, larger class sizes, delayed upgrades and repairs to older buildings, fewer afterschool opportunities, new fees and a host of other changes unlikely to be popular with parents. Add to this the anticipated municipal aid cut — about half a billion — and we are looking at $1.25 billion in lost local aid that will result in huge service cuts and potential tax increases.

The troubling thing about what we have heard so far is that the governor is prepared to balance the books on the backs of people who really can’t afford it (the unemployed also are looking at benefit cuts), while offering a tax cut to the upper end of the income strata.

From a fairness standpoint, it makes little sense. From an economic standpoint, it makes even less — at a time of high unemployment the governor is creating conditions that will add public employees to the unemployment rolls, even as he is cutting their lifelines.

This is what the state’s voters get for supporting a candidate who refused to explain how he would cure the state’s fiscal ill-health.

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‘I’ll gladly pay you Tuesday for a hamburger today’

I am not the only New Jersey columnist who believes the state needs to rethink how its local governments are organized. Alfred Doblin, editorial page editor for The Record, takes on the sacred cow of home rule in his column today:

What is more important: Quality education or a local school district? Is the firefighter less competent because he or she answers to a regional supervisor instead of a local chief? Does it matter if the municipality, county or an independent contractor removes snow as long as the snow is removed?

He likens the state’s fiscal crisis to the Chicago fire that destroyed that city in the late 19th Century, saying New Jersey has “burned down” and adding that “We should not build it like it was.” As he says of the sacred cow of “Home rule” — a “very big cow”: “it’s time it either produced a beverage or became an entrée.”

The fiscal reality is bleak. But there are ways of providing many of the services we expect while still spending less. We don’t have too many teachers. We don’t have too many parks. We don’t have too many roads. We have too many districts. We have too many municipalities. We have too many departments that essentially duplicate other departments.

It is in the new governor’s hands. Gov. Chris Christie, Doblin says, “has the personality to withstand the blowback from reactionaries afraid of change.” But does he have the vision? Is he willing to take on the web of problems that have created our fiscal mess, or does he plan to just slash indiscriminately, balancing the books but breaking our backs?

The jury is still out, though his budget freeze — which essentially will create problems for many school districts next year and exacerbates pension problems — raises some concerns.

Ultimately, though, as Doblin points out,

Change is happening. The issue is whether it is change for the better or for the worse. It is time to put the home-rule sacred cow on the altar of fiscal sanity.

In desperate times, every cow is accountable. Either produce milk or end up as hamburger.

That may not be popular, but it has to happen.

Email me at grassroots at comcast dot net.

Colorado Springs and the future of American government

This story comes to me courtesy of our lifestyle editor, Michael Redmond:

Colorado Springs cuts into services considered basic by many

The reason I share it — and that he passed it along — is that it just may be our future, if we’re not careful. The gist is this: The antitax fervor in the Springs has left the city with a busted budget and no hopes of generating new revenue. Without revenue, there is no way to pay for services — many of which most of us take for granted.

More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won’t pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.

It is not a pretty picture and it’s one we could face if we continue to pretend that we can have top-shelf services without paying for them.

I’ve been covering state and local government in New Jersey for a long time and it is clear to me that the credit-card mentality that nearly destroyed our economy (and remains likely to) has infected every public financial and fiscal decision we make.

New Jersey is buried in debt and facing a recurring, structural budget deficit. Its pension and healthcare systems have been borrowed against, leaving far too little money available to pay off our promises to state workers. The federal government, rather than help the states, spent the Bush years cutting taxes for the rich and pretending that the impending budget crisis would never come.

And it is here and has been for quite a while. And yet, everytime we talk about making tough decisions, we flinch. We think we can balance our books by eliminating waste and corruption, as if waste and corruption make up more than just a tiny fraction of our structural deficit. We have no interest in making real sacrifices — though we are willing to have others sacrifice on our behalf (the suburbs want spending on the cities cut, for instance, while many seniors are willing to skimp on school spending and so on).

Colorado Springs may seem like a novelty story, a one-off problem. But it isn’t. It is the canary in our fiscal coal mine and we better take heed.

Email me at grassroots at comcast dot net.