NJ Shutdown: Day 2

Yesterday, Gov. Corzine issued the order to shut down the state government except for essential government workers. There's no end in sight for the shutdown, as Corzine is obstinate on imposing yet more taxes - including the increase in the sales tax - along with a massive increase in state spending.

All while much of the media focuses on the tax increases and the opposition within the state legislature to those tax hikes in an election year, the fact that Corzine's budget is a significant increase over last year's budget gets next to no attention.

That's curious. If Corzine simply kept last year's budget in place, there would be no need for a tax increase, no additional state spending, and we'd be in slightly better fiscal shape than if Corzine's budget is adopted as is.

The state's 12 casinos are still open, despite the threat and potential closure - state inspectors aren't considered essential workers. Legal action is still underway to keep the casinos open (along with the thousands of people who rely on the casinos for jobs, the millions in tax revenues collected from the casinos on a daily basis, and the tourism money the casinos bring in on a daily basis.

The Bergen Record, on the other hand, thinks that Corzine is trying to impose corporate values on the budget - and that his budget is a model of fiscal conservatism. Never mind the tax increases and increases in state spending which outstrip the tax increases over time.

Corzine, the former Wall Street titan, is approaching the budget with the determination of a corporate troubleshooter, hired to dry up the red ink, declare a profit and please the shareholders.

The liberal governor preaches a brand of old-fashioned fiscal conservatism: the bills must be paid with a reliable, steady source of revenue. The state can't continue to balance the budget with a hook-or-by-crook method of borrowing billions, inflating revenue estimates and other "gimmicks," he says.

To carry out his plan, the freshman governor is prescribing a bitter pill for the short-term: raise the sales tax, freeze school spending, even in New Jersey's poorest areas, and trim government operations wherever possible.

Standing in his way is new Assembly Speaker Joseph Roberts, a veteran Camden County Democrat who believes that New Jersey's highest-in-the-nation property taxes are the most important crisis affecting voters. He argues that residents would be willing to accept a sales tax hike only if it can help defray or reduce the property tax bills that rise about 6 percent each year.

Raising the sales tax just to balance the budget, in his view, would be just another of the gimmicks that Corzine decries.

As Enlighten NJ consistently points out, Corzine's budget has state spending increase by 9% over last year. That's more than double the rate of inflation, and that increase has to be covered by increased revenues - tax increases like the sales tax. Eliminate the increases in spending, and there's no need for the sales tax hike.

The problem for Corzine is that those increases are part of promises he made during his campaign to the unions and taxpayers to provide property tax relief. Never mind that Corzine is simply replacing one kind of tax with another - the tax burden remains the same or higher.

Technorati: corzine, new jersey, budget crisis, fiscal folly.