This budget proposal comes from a man who wants to be the face of New Jersey conservatism? The Corzine budget proposal is going to be painful enough without putting in place the kind of draconian cuts that Steve Lonegan is pushing. I’m thinking it is time that the state’s media stop taking this guy seriously.
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Sometimes, when you write a column on a weekly deadline, the world moves and you’re left talking about things that have changed.
That appears to be what’s happened with the governor’s toll-hike plan, which he now is acknowledging is nearly death.
“I’m not conceding that it’s dead. On the other hand, I’m a realist. I don’t have 21 and 41 votes for this,” Corzine said, referring to the minimum votes he needs to push his proposal through the state Senate and Assembly.
The governor now says he is willing to listen to alternatives — he’s been saying that all along, but now actually seems serious about doing so.
Corzine said yesterday he will review a proposal by Assembly Transportation Committee Chairman John Wisniewski, the first detailed alternative to his plan.
“We’ll have to see what it actually accomplishes,” Corzine said. “But it’s a healthy addition to the dialogue. I’m searching for a solution that actually addresses the failed financial position of the state.”
The plan announced Wednesday by Wisniewski (D-Middlesex) would phase in an 18-cent increase in gas taxes over three years and consider privatizing the state Lottery. Under this scenario, tolls would rise by less than half of what the governor has proposed.
There are other options that, if considered, could be part of a more varied approach — income taxes, for instance. In any case, the toll plan as currently conceived seems on life support.
The other question that this raises is whether the governor will remove the toll plan from his budget calculations and how this might affect his planning.
Corzine had previously pledged to hold spending flat, a move that alone requires more than $2 billion in spending cuts.
“We can only spend the revenues we have, and details of the plan will come on Tuesday,” said Corzine spokeswoman Lilo Stainton.
Corzine said he still hopes to halve the state’s $32 billion debt. But his comments Thursday focused more often on investing in state infrastructure, the second of the two prime goals in his toll plan.
“We may not get everything I want with regards to these issues, but if we get a long way down that path, I think we will have made real change, a real contribution to both the present and the future of this state,” Corzine said.
It’s not a solution, but at least the issue of the state’s fractured finances is on the table. That’s more than we’ve gotten from anyone else in recent years.
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Interesting piece by Linda Stamato, who teaches at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. She asks some basic questions about the governor’s toll-hike and debt plan that need to be answered before anyone should offer any support.
She writes:
I don’t buy the governor’s “either/or” framework for fiscal salvation. We don’t either need to increase the income tax by 20 percent or the sales tax by 30, or the gas tax by 12 cents or live with the governor’s plan. A combination of approaches makes more sense to me. And, certainly we ought to be putting more on the table for inclusion than has been placed there so far. We need a combination of taxes, a freeze on spending and reductions in costs, to accompany reasonable increases in tolls. An income tax increase should not be summarily dismissed by any means, certainly if equity is a consideration, and, it must be. An increase in the gas tax also makes sense if the intention is to replenish the Transportation Trust Fund, address ransportation-related needs, including public transit, and, not least, encourage fuel efficiencies and reduce carbon emissions. (To be sure, Governor Corzine’s own ambitious goals for reducing greenhouse gas emissions ought to figure in this picture as well.)
My own issues with the plan are as follows:
My sense is that a broader-based approach is necessary and must include steps to reduce spending and alter the tax structure — in addition to consolidation, we need to reconsider nearly everything we ask the government to do, what should be a state responsibility, a local responsibility and how much of the cost of government in New Jersey we expect the state to cover.
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The governor is preparing to hit the road to sell his plan to use the state’s toll roads to restructure New Jersey’s debt, and from all accounts it looks as though he will not be facing a willing buyer.
The public in a series of polls last year expressed opposition, though admittedly it was being asked to comment well before a plan was on the table. At the time, there was still some fear that the state would sell or lease its roadways to a private company, which would have a direct impact on the roads’ management and maintenance. The plan unveiled this week does not do that. But it still is not going to be an easy sell — nor should it be.
Consider this comment in The New York Times today from a regular driver on the N.J. Turnpike:
With a sense of resignation in his voice, Ed Daly, who had stopped for a snack at the Joyce Kilmer rest area, just north of Exit 8A, said, “Tolls fall heaviest on the working man.”
Mr. Daly, the paper points out, is “a sales manager for a communications company in Clifton, who said that he traveled the turnpike every day, spending $50 a month in tolls.”
Once the first increases take effect in 2010, that would jump to $75, and he would have to absorb the difference by himself.
“Talk about a regressive tax,” he complained.
The Times story offers several other complaints from drivers that, when combined with this story in The Star-Ledger on state E-ZPass data, make it clear that Gov. Jon Corzine is getting ready to head into the belly of the beast.
Dismissing the toll plan out of hand is difficult, however, because of the severe fiscal crunch facing the state, a financial catastrophe that should be common knowledge but that appears not to be fully understood by the state’s residents. Everyone wants — and deserves — real property tax reform (the property tax is regressive), but few seem willing to pay the cost in higher state income taxes, drastic changes in the organization of local government or the kind of severe spending cuts that would be required to make it happen.
Add this to the fact that we still pay among the lost tolls and gas taxes in the country and it is clear that toll hikes should not be taboo.
That said, the governor’s plan is rather extreme — the numbers he outlined were staggering, boosting the cost of a trip from the Delaware Memorial Bridge to the Lincoln Tunnel from $5.85 to $48 over the next 14 years — and regressive, especially coming from a staunch liberal Democrat.
The governor was right to demand that critics place a better alternative on the table, rather than just stating their opposition. Republicans, in particular, have been very good at offering complaints and vague suggestions — cut the budget, they say, but rarely offer suggestions as to what could be cut, knowing that once they do that they will have to deal with the wrath of those who will lose out.
That said, I think we are destined to accept at least a scaled-down version of the governor’s plan, combined with other changes. Personally, I’d propose an significant increase in the income tax, municipal consolidation, broader school-funding reform and universal health care coverage (expanding coverage to everyone in New Jersey, possibly using the model in place in Massachusetts, could lessen the costs to the state of covering not only current employees but retirees; the Massachusetts approach is not perfect, but might be our best bet until the federal government addresses health care on a national level).
At the very least, I am hoping that the drastic nature of the governor’s plan will shock taxpayers into understanding how dire the state’s fiscal condition is, making it more likely that something can be accomplished.
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This is a lot to take in. The governor is proposing borrowing enough money to cover paying down a large portion of the state’s debt, but also to replenish the state’s Transportation Trust fund and maintain the state’s toll roads for years to come.
Gov. Jon Corzine is billing his toll road proposal as a way to bail out a state awash in debt, a state with a political class that has relied on a host of gimmicks and accounting tricks to spend like drunken sailors while pushing off the consequences for another time.
That time is now. Debt payments are consuming a greater portion of the state’s budget every year. In addition, the state’s pension and healthcare funds are woefully underfunded. Together, these obligations are crowding out other priorities — including real property tax and educational funding reform.
Yes, the Legislature did provide some nominal tax relief this past fall. And yes, it approved on Monday a new school funding formula that calls for a $500 million boost in overall state spending on schools.
The reality, however, is that both of these accomplishments were nothing more than nibbling — a much larger infusion of state cash into local school is needed both to ensure equality of educational opportunity and to reduce the amount spent locally in property taxes. And this does not take into account the cash needed to build the affordable housing units needed both to provide housing and to desegregate this horribly segregated state.
Will the toll-road plan address these issues? Perhaps. The governor certainly seems to think so.
In a speech that may be the most important of his political career, Corzine described his plan as “comprehensive and sober,” adding that is bound to be “controversial.” He ticked off its four elements, some of which Republicans have been demanding for years.
“One: Freeze spending now,” Corzine said. “Two: Limit future spending to revenue growth. Three: Capture the enterprise value of our tollways to pay down debt and make capital investments. Four: Limit borrowing by requiring voter authorization.”
“If there is a better plan, I am open to its consideration,” he said. “Put it on the table.”
According to The New York Times, the governor wants to boost highway tolls over the next 15 years (by 50 percent in 2010, 2014, 2018 and 2022), while borrowing between $30 billion and $38 billion “to help the state pay off half of its debt and pay for transportation improvements.” The plan also calls for the state to “establish two new agencies, one to operate and maintain the roads, and the other to provide some oversight.”
It is an ambitious plan, that’s not in question; there is no way to address years of political timidity without being bold and ambitious.
What is questionable is whether this plan is the right plan to address the state’s woes. That’s a question I can’t answer at the moment.
My initial sense, however, is that this is just another in a long line of gimmicks foisted on taxpayers — though there is a twist: Taxpayers will not be the ones on the hook for the plan; drivers, the majority of whom the governor says come from out of state, will be. That, in the end, is his chief selling point.
At least the governor is being honest. Unlike his predecessors, who revalued the state’s pension plan so that they could avoid making payments into the fund (I’m talking to you, Christie Whitman and Jim McGreevey), Gov. Corzine is being honest about this plan and the pain, about its risky nature and about the pain it will cause for drivers.
I’m skeptical, but will keep an open mind. It’s now up to the governor, in his upcoming statewide dog-and-pony show, to convince voters and state legislators that his plan offers far more good than ill.
South Brunswick Post, The Cranbury Press
The Blog of South Brunswick
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Hank Kalet 