Friday, November 06, 2009

Lame Duck Corzine Finally Takes Action

The lame duck Governor of New Jersey, Jon Corzine may have finally done something fiscally responsible for a change. He's called for a freeze in $400 million in spending that the state simply doesn't have. I guess we should be thankful for token measures and ignore the fact that the state budget passed for FY2009-2010 should never have included that spending in the first place, and that last year's budget (FY2008-2009) should have been vastly scaled back because of all the warning signs about the slowdown in the economy.The latest round of cuts would not have been necessary, or could have been scaled back had the state budget been much more realistic in the first place.
Governor Corzine is preparing $400 million in budget cuts and wants legislators to shelve any new spending measures during their upcoming lame duck session, all to offset revenue losses blamed on the poor economy.

A hiring freeze and travel restrictions will also remain in place as revenue collections continue to come in below original budget projections, the governor said Thursday.

"My administration will continue to live up to our responsibility to maintain a fiscally balanced budget during the next two months," said Corzine, who lost Tuesday’s election to Republican Chris Christie. "These cuts will be tough but necessary choices that need to be addressed now."

Last month, state Treasurer David Rousseau said revenue collections for the first three months of the budget year that began in July 2009 were off by $190 million, or about 3 percent.

Corzine, in response, said workforce reductions, a new employee pharmacy benefits program and debt refinancing were already generating savings during the first quarter. But he also asked department heads to identify $200 million in possible cuts that could be enacted on Dec. 1.

The governor said revenue collections in October were also off, and he called for up to $400 million in cuts to be ready by Dec. 1.
Meanwhile, the NY Times is operating as the excuse factory for Corzine's loss in the election, claiming that Corzine was aloof and unlucky. Sorry, but the Times can't make excuses for Corzine proffering a tax and spend plan that raised sales taxes to cover a property tax rebate only to sharply curtail the rebate limiting its effect on hundreds of thousands of homeowners throughout the state (and Corzine actually called for the elimination of the rebate during the budget negotiations). No, luck has nothing to do with Corzine's situation. Corzine failed to bring the state's spending in line with revenues. He did nothing to reduce state spending, and instead oversaw an increase in state spending at both the state level and watched as local municipalities continued to raise property taxes through loopholes he allowed in the property tax scheme he proffered. The state regularly rubber stamped increases above and beyond the 4% "cap" he put in place, making the cap a symbolic gesture. A hard cap would have forced municipalities to make hard decisions that they've refused to make for years; just as surely as the state had refused to make hard decisions on funding of programs that were unjustified or didn't work to achieve the goals anticipated. The stimulus funding granted the state papered over the inability of the state to control its spending.

Taxpayers saw through all this when they sent Corzine packing.

Now, Republican Chris Christie will have to do more than talk to get the state out of this fiscal black hole. He's going to have to put teeth into property tax reform and control profligate state spending.

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