Daily Archives: January 14, 2010

Obama and Biden Believe Our Future is in New Jersey? By Gregory Hilton

Outgoing Gov. Jon Corzine (D-NJ) gave his final “State of State Address” today. A week from now he will be heading back to Manhattan, and he leaves behind a $9 billion deficit and plenty of challenges for his successor. Prior to entering politics, Corzine had been CEO of the investment banking firm Goldman Sachs and his net worth is in excess of $300 million. He was portrayed as a “Wizard of Wall Street” when he arrived in Trenton, but the state soon learned he was unable to balance a check book.
He has a 61% disapproval rating and lost to Gov-elect Chris Christie (R) last November by 85,000 votes. Now that he is leaving office he has begun to recognize some of the sources of voter anger. This afternoon Corzine said there was “reckless borrowing,” and “Let’s call it like it is: Everyone’s property taxes are too damn high.”
Not only is he correct but they are the highest taxes in the nation. Four years ago he promised to cut them by 40%. The Corzine plan was to cut property taxes by 10% a year over a four year period. They ended up increasing by 20%.
He also raised the sales tax and increased the state budget. He promised to bring fiscal sanity in his 2005 campaign, but he only brought insanity to Trenton. He said there would be no government borrowing without voter approval, but he broke that promise immediately. He claimed there would be no more “gimmicks”, and then he postponed interest payments until 2014.
In his speech today the Governor called New Jersey a “beacon for progressive government.” He is correct. New Jersey is a prime example of what happens when liberals have complete control of a state government.
What was most disturbing is when the Governor said Obama and Biden “looked to New Jersey for ideas and they used them.” I am not sure what ideas he is talking about because Corzine increased spending, borrowing, debt and nearly bankrupted the pension system.
When he came into office the Republican Party offered to work with Governor Corzine. GOP leaders promised to cooperate with him on his campaign promise to cut property taxes, and reform state government. The Governor was also told Republicans would support practically any budget reductions he submitted. He ignored the offer of assistance which is a major reason he lost.
His first budget was 11% higher than his predecessor and he hired over 7,000 new state workers. Tolls on the NJ Turnpike went up 40% under Corzine. With bipartisan support the legislature did enact $1 billion in spending cuts, but they were vetoed by the Governor because his labor union allies did not want them.
Corzine was also anti-business, and enacted burdensome regulations such as the very generous family leave policies. These regulations makes the state non-competitive. Many citizens have relocated because of the high property and state income taxes, and others have not fled because it is so difficult to sell a home in New Jersey.
Corzine spent $130 million of his own money on his campaigns and many saw this as a good point because he would not be beholden to the special interests. Unfortunately that was never the case, and the Governor was always on the string of the SEIU and the NJ Education Association. Corzine ignored many dire fiscal problems and his priorities were instead gay marriage and legalized marijuana.
The damage done by Corzine will be difficult to repair. The new Governor has to raise revenue or drastically cut services. State pensions and medical benefits are going to be a huge structural liability for many decades. Christie needs to fire 5000-7000 state workers, and cut staff salaries by 20%.
Every union contract has to be open and cut. He needs to eliminate tenure for teachers across the board. State employees should have insurance but similar to the private sector, they need to pay for family coverage as well as 50% of the premiums. Pensions for workers with less than five years of service should be moved to 401k plans.
The state is on the verge of bankruptcy and the real loser has been the besieged taxpayers. Gov-elect Christie now has one of the most difficult jobs in the nation, and he must contend with a state legislature which is firmly controlled by the Democratic Party. Despite Corzine’s persistent lobbying the legislature recently rejected gay marriage as well as free in-state tuition for illegal aliens. The new Governor has a mandate for dramatic reform so all eyes will now be on the state legislature. If they are going to climb out of the current fiscal hole they need to put partisan politics aside.
I sure hope President Obama is not looking to New Jersey for the new initiatives he will propose in his upcoming State of the Union Address.