New Jersey Budget Disaster Looms; Tax Hikes Pending

It's a broken record with New Jersey politics. The state can't budget for good times or bad. It always overspends, and considers taxpayers to be piggy banks that have the ability to give that much more in taxes to cover spending on programs of dubious worth.

Today, we've got a series of reports indicating that Gov. Jon Corzine has to call for additional cuts and dip even deeper into the rainy day fund to cover the shortfall for this year and next year.

With everyone knowing that the recession was going to continue, why was anyone contemplating a budget that depended on overly optimistic revenue projections? That's fiscally irresponsible. You are supposed to be taking the most conservative position when it comes to revenue projections, because if the revenues fall short, you can't fund the programs. But that's not how they do things in New Jersey - or most of the rest of the nation for that matter.

So, how will New Jersey deal with this? Raising taxes. We're supposed to be relieved that Corzine wants to tax wine, but not beer? How about the wineries in New Jersey that will be adversely affected by that (and which benefit from the Jersey Fresh agricultural products campaign)?

And can the media be honest with the public when it comes to Trenton's profligate spending? The state is spending $32-$33 billion, not the $29.8 billion that the Record reports.

Governor Corzine will raid what’s left of his surplus while pushing other expenses down the road to make sure the current budget year ends without a deficit.

The governor will also make some new spending cuts, to be announced Friday, to maintain a balanced budget through June 30, something the state constitution requires.

Corzine said the new budget maneuvers will offset a $1.2 billion shortfall in revenues the state expected to collect back in March when the governor presented a spending plan for the new fiscal year.

That budget is also off by about $2 billion now, prompting Corzine to say he will be coming out with new cuts next week.

"It will, without doubt, require an additional $2 billion in reductions in spending," he said Thursday during an afternoon news conference in the State House. "We'll be precise about that next week."

To get out of the current budget year without a deficit, the state will use $450 million from surplus funds and push another $450 million in planned expenses, including school aid payments and business grants, into the new budget.

The state is spending billions courtesy of the federal porkfest, and it is not reducing its own spending one bit. Any cuts to the state's budget are long overdue and will likely be for show.

Corzine is addicted to spending, and the federal bailouts enabled him to carry out spending without the slightest inclination to control costs. New Jersey recently began an amnesty program so that people would pay back taxes without having to worry about penalties for late payment. That's not going to cut it. We're talking being a billion dollars or more short, and amnesty will raise a pittance in comparison.

Also, Corzine's projections for revenues were off by 50%.

Earlier last week, the state Office of Legislative Services issued a memo on April income tax collections that indicated a 40 percent drop off this year from 2008. Corzine had projected the income tax collections, which are usually a big source of revenue for the state, would be off by 17 percent.

Rousseau said Thursday the April tax collections re-opened a shortfall that had been closed by Corzine’s earlier budget adjustments.

Corzine is widely touted as a financial wiz, but the only thing Corzine continues doing is sending the state into financial ruin with his outlandish and overly optimistic projections, and wishful thinking taking the place of prudence.