New Jersey Budget Blues

We're now learning that the School Construction Fund needs $12.8 billion to make sure that all the projects started are completed. And that's the most optimistic scenario:

The report estimated that the Education Department would need at least an additional $12.8 billion to complete 313 construction projects in New Jersey's poorest urban districts.


But that figure supposes work would begin this year. In five years, the estimate increases to $18.2 billion. In 10 years, it balloons to $29.2 billion. These costs are on top of the $6 billion the state Legislature appropriated in 2000 for school construction.

The 313 projects listed in the report do not represent any of the projects districts requested in their 2005 long-range facilities plans. Instead, they are projects left from the 2000 plans.

The Education Department released the annual report, the first of its kind, to the Legislature in part as a reaction to a state Supreme Court order issued in December 2005. The order was the 14th decision handed down in the Abbott v. Burke case requiring New Jersey to provide a "thorough and efficient" education for all children. An earlier decision by the court mandated that facility upgrades are part of the requirement.

The School Construction Fund is nearly tapped out and the administration of the fund has not done a good job. Not to mention that the Courts are determining what money must be spent, not the Legislature.

The SCC was created in 2002 by then-Gov. James E. McGreevey to speed construction and repair of schools in the 31 Abbott districts, named for the Supreme Court cases.

The state agency has managed nearly 600 school projects. When the SCC had spent nearly its entire appropriation by mid-2005, it suspended all work, aside from 59 projects slated for Abbott districts. Those projects are not included in Thursday's estimates.

Although state lawmakers may be leery of spending more money, the state Supreme Court is unlikely to give them any alternative.

As you drive around the state, you'll find school construction projects that have simply ground to a halt because the money simply isn't there to complete school renovations.

And on top of all those problems, Gov. Corzine is considering calling for a gross receipts tax on top of the state sales and use tax. Corzine would claim that this tax wouldn't affect customers, but anyone with half a brain would know that the costs of the tax would be passed on by businesses to the ultimate user (the buyer). It's yet another sign that Corzine isn't serious about fixing the structural budgetary problems with the state, because all of his proposals are grounded firmly in the proposition of taxing the state out of fiscal trouble.

It wont work.

The state's budget problems include debt that needs to be retired, not refinanced. Specific funds that need to be properly funded with specific revenue sources and not raided in order to balance the general budget. Robbing Peter to pay Paul is not going to fix things. It only pushes the problem ahead, and compounds the problem with higher costs down the road.