eCache

Budgets, Sales Tax, and a Challenge

There are rumblings from NJ Democrats that Governor Corzine’s proposed budget is about to hit a snag. Increasing the sales tax 16% as Corzine wants to do is likely to have consequences at re-election time. Democrats cotrol the state Senate 22 to 18. With the Republicans lined up against the sales tax increase, all it will take to stop it are two rogue Democrats.

Today Sen. Stephen Sweeney, D-Gloucester is making noise. According to him this is going to be a hard sell.

Sweeney has asked Corzine’s administration to show him a budget plan that doesn’t include tax increases, even if that means deep budget cuts. Sweeney suggested cutting the budgets of all state departments and agencies by 10 percent.

This is exactly what needs to be going on. Last summer . This is what organizations do when money is tight. I work for an Abbott district. We are already preparing budgets for next year with 10% decreases in spending.

This is what has been troubling with Corzine’s budget. He has spoken about the hard choices and the massive cuts, but spending, if he gets his way, will rise 9.2%. That is not being responsible. That is not tightening the belt.

Now, I have no expectation that Sweeney and other Democrats will actually vote against the sales tax increase. But it is good to have the discussion and perhaps, just perhaps, the public will latch onto this and demand a responsible budget.

Enlighten highlights the same issue today as does Sharon at The Center of NJ Life. Sharon challenges us with a legitimate quest:

Let’s hear some plans for where you plan to get the money or what you want to cut, instead of just gripes.

As I highlighted before, there should be a 10% across the board cut in all departments. Enlighten has found $858.52 million to cut. But more to the point, allow me to highlight two areas that I have not heard discussed thus far: Schools Construction Corporation (SCC) and property tax rebates.

Schools Construction Corporation
Last August it was noted that the SCC had but $60 million left of the $8.6 billion it took from New Jersey taxpayers. This money was encumbered after the referenda held in September. There is no more money for this agency to squander. So, let’s close its doors today. The state can cut the checks to each district that is in the middle of construction. These districts have facilities managers onboard. There is no reason for state oversight at this point. The districts can manage the projects from here on out. As Ken Adams has shown, the districts oversee these projects far more efficiently than the state does anyhow. I do not know what the budget is for the SCC and it is unlikely to significantly reduce the budget. Yet, this is exactly the kind of waste the governor promised to cut during the campaign.

The SCC is frought with corruption and inefficiency. It squandered the taxpayers’ money miserably. Now there is nothing left. So, there is no reason to have the agency. Perhaps more money will eventually be appropriated to complete the job SCC did not get done. Should the state ever get to that point, we can re-visit how best to oversee those projects. Since the money should be provided with taxpayer approval, I suspect it will be a long time before we really need that conversation. In the meantime, the state can shorten its payroll, save adding to the pension system, and keep more off of the state medical benefits tab. There is no down side to this proposal for the state. So Sharon, let’s cut this agency.

Slippage/Property Tax Rebate
One of the central themes here at eCache is that of slippage. Slippage is a measure of the inefficiency of the system. Collecting money from taxpayers, putting it in the bank, hiring a department to then write checks back to the taxpayers to return these excess taxes in the name of property tax relief costs money. It is a sham; a system full of good feelings, but really accomplishes little.

Thus, I propose eliminating the rebate sham program.

Whatever department manages this program and money can be eliminated. Again, that money gets to come directly off the tab of the taxpayers. Just like the SCC, more state workers come off the rolls. Fewer pensions will be funded. Fewer medical benefits will be purchased. This is all good.

Some will ask what will happen to those tax dollars. That is a very good question. And that is something the governor will need to address. Once we get rid of the sham program, is there a defense to collecting these extra tax dollars? Perhaps a compromise can be found that the state can use those dollars this year for an equal cut in government spending elsewhere. I certainly would be willing to entertain that. Or perhaps the governor will need to confess that there isn’t a legitimate reason for the state to sit on our tax dollars only to spend money to return them to us at a later date.

Neither proposal will shrink state government enough. But both cuts exorcise waste from the public payroll.

The issue here is not that this is not enough but rather, why wouldn’t we want to cut these two departments?

Also blogged on this date . . .

• The Lost Art of Logging - 2008
• Wild - 2008
• Chris Matthews' Leg: Now An Award - 2008
• 12 of 12 Baker Dozen-Style - 2007
• Long Posts - 2007
• Where Did I Go Wrong? - 2007
• Marlins' Willis Shuts Down Phils Offense - 2005
• Hunter S. Thompson - 1989