The Corzine Shell Game

This is financial alchemy 101, courtesy of the supposed financial guru, New Jersey Governor Jon Corzine (D):

Governor Corzine urged municipal officials this morning to get behind an initiative that would enable them to defer employee pension payments to avoid property tax increases.

The governor told local leaders that he could not promise them that they would be spared cuts in municipal aid. The state's fiscal picture is bleak thanks to a recession-fueled budget hole.

"The high probability is we're going to have to come up with absolute cuts," he said during a meeting organized by the state League of Municipalities.

The state budget could be as low as $29.5 billion in the fiscal year that begins in July, which would be more than $3 billion lower than they current fiscal year spending plan, Corzine said.

"We are in a crisis," he said. "In an emergency."

The pension deferral initiative Corzine has proposed would save a combined $540 million if the towns opted to use it this year. So far, the bill that would enact the initiative has stalled in the Legislature, with Republicans leading the charge against it.

"I'm sure it's tempting for a mayor to skip a payment when revenues are shrinking, property taxes are rising and Corzine's only answer has been to cut municipal aid," said Assembly Republican Leader Alex DeCroce, R-Morris. "But skipping this payment will only set up taxpayers for colossal – even by New Jersey standards – property tax hikes."

Corzine is calling for municipalities to defer their pension payment obligations, which means that they'll have to make up the shortfall at some point in the future. Who pays? Taxpayers, who will be hit with higher tax bills both now and later. Tax bills aren't going to go down as property tax relief hasn't done anything to lower the tax bills of New Jersey taxpayers.

The state can't afford more of Corzine's fiscal chicanery, which is how the state got into the mess it has. It's time for a change, and it starts with state Republicans demanding that the state actually cut the state budget and workforce to match the seriousness of the situation. Reducing the budget to last year's level would be a start, and wouldn't require increased taxes or fees. It would simply force existing organizations and entities to make due with the same level of funding as they did last year.

I perish the thought of ever more radical moves, like seriously cutting the budget to where it was just two or three years ago. Profligate spending is why states around the country are in dire fiscal shape. Taxing their way out of the mess or hoping that the federal government will bail them out is only shifting the tax burden from fiscally incompetent states and municipalities onto already overburdened taxpayers.