The Wretched

So New Jersey taxpayers, are you pleased with the new budget that Gov. Corzine has laid on the table? I didn't think so. Higher taxes and fees, one-shots, and continued structural deficits as far as the eye can see.

How do you get out from under this mess? Well, I've been saying for some time now that refinancing debt isn't solving anything. It's only extending the time to pay in exchange for what appears to be lower monthly payments. You still pay more in the long run, and that adds to the structural deficit going forward. Sure, you balance the budget today, but your kids will still be paying off your debt 30 years from now.

Brian has noted that the sales tax and gas taxes are regressive. He's right. They are regressive and hit the lower and middle class harder than upper class taxpayers. I would not want to see the sales tax raised because it also reduces the competitiveness of businesses compared to neighboring states. Raise the sales tax and you reduce traffic into the state to seek out bargains. Those out-of-state purchasers are spending money on food, gas, and other services. Raise the sales tax and those folks will stay in their home states.

The gas tax is a slightly different creature. Revenues generated from the gas tax are supposed to go towards transportation projects, and transportation projects only. If you're using your car, truck, or SUV on a New Jersey road, your gas taxes are going to pay for road improvements and maintenance. It also goes to mass transit, which improves the usability of roads throughout the region because it shifts traffic off the roads and eases congestion.

The Transportation Trust Fund was going to run out of money in July. Refinancing the fund's debt only buys time. It doesn't solve the problem. An increase in the gas tax is the best way to address that problem, even though it will hurt taxpayers across the board. After all, all taxpayers deserve roads that aren't crumbling under their cars (or on to them as concrete or debris falls down from decrepit overpasses and bridges), and a safe transportation system which we would have to rely upon should there be a natural disaster or a mass casualty event (terrorism).

And if the gas tax isn't raised this year, count on it coming up next year when the same problems resurface and Corzine figures that he needs to balance the budget somewhere and people will not tolerate tax increases elsewhere.

UPDATE:
Enlighten NJ has a breakdown of the tax and fee increases (which are euphemistically called revenue raisers).