Saturday, January 28, 2006

Early Corzine 

New Jersey has a new governor in Jon Corzine, whom I voted against mostly because the Democrats in the state have waged war against both employers and affluent taxpayers, and I am fortunate to be both. I have nevertheless expressed the hope -- and it is only a hope -- that Corzine's personal wealth and obvious national aspirations will motivate him to uproot the state's culture of political corruption and inefficiency.

Corzine's first trial balloons, released yesterday in the form of recommendations from his transition team's outside advisors, are quite promising.
Corzine's ethics advisory team called for a series of reforms including public financing of elections and a ban on corporate and business contributions to campaigns. It also called for the reinstatement of a bribery statute the Democratic-controlled Legislature quietly repealed in 2004: "The repeal makes prosecution more difficult and thus makes it far easier for lobbyists to pay gratuities to public officials and for public officials to accept them."

So that's good. A few prosecutions would help, though. Since the state is dominated by Democrats, I'm sure he will have an opportunity to demonstrate that he is not just another New Jersey hack.

On the budget, which faces an obscene shortfall considering the strength of the economy, he wilted in the face of Republican foot-stamping. The "final report" from his transition team abandoned earlier "draft" proposals that I liked a lot: a phasing out of the state pension system -- why should state workers get archaic defined benefit plans that are no longer available in the private sector? -- and a proposal for a sales tax on clothing.

No, I do not think that new taxes are the best way to close the deficit, but new taxes will be part of any deal and a sales tax on clothing strikes me as an excellent way to go. In an affluent state like New Jersey, the vast preponderance of clothing expenditures are obviously luxuries, not necessities. The idea that they should be exempt from sales tax is archaic. People waste a huge amount of money on clothing, virtually all of which is imported (both to the United States and to New Jersey).

Of course, the real trick to more efficient government in New Jersey is to rationalize the levels of government below the state. There are so many overlapping jurisdictions -- townships, boroughs, counties, random authorities for this, that and the other thing -- that the taxpayers underwrite an enormous amount of conflict between organs of government. You can't open the paper in this state without reading about politicians fighting with each other, sometimes to the point of litigation, each side funded by the taxpayers.

This last -- overlapping jurisdictions that spend our money on both sides in fights with each other -- is the core inefficiency in American government generally. See that last proposal discussed in the Star-Ledger story:
Another transition policy group recommended giving the Department of Military and Veterans Affairs responsibility for protecting the state's military installations from Pentagon budget cuts. No state agency had this responsibility in the past. The Bush administration's plans to close the Fort Monmouth Army research post in 2011 will cost New Jersey more than 5,000 high-paying civilian jobs.

So, in my capacity as a New Jersey taxpayer I am going to underwrite an agency to lobby and perhaps sue the federal government which I pay for in my capacity as a federal taxpayer. All this, so I can "protect" 5,000 high-paying civilian jobs in a state with a crying shortage of competent professional employees.

To paraphrase a lefty bumper sticker, if you don't get outraged when different levels of government -- both of which you pay for -- lobby, obstruct and sue each other, you just aren't paying attention.


By Blogger Counter Trey, at Sat Jan 28, 02:23:00 PM:

TH, I wish I were as sanguine as you. I disagree with two points.

1. Public funding of political campaigns puts the fox in charge of the hen house. Incumbents will make it impossible for upstarts to get any money and the incumbents will become permanent fixtures in Trenton.

2. There is a way to close the deficit without raising taxes. Cut spending. When state spending has doubled (from $14b to $28b) since the 1993/1994 budget year (DOUBLED!), it is hard to take anyone seriously if they argue that spending cannot be reduced enough to close the gap.

To put the rampant spending in context, consider this: The average annual increase in state spending is almost triple the consumer price index over the same time period. Since McGreevey/Codey/Corzine have been in charge—just four short years—the budget has grown 33%, which is 7% compounded annually versus a little over 2% for the CPI.

It shouldn't matter that those that are used to sucking the life out of the NJ economy expect to continue to pucker. We will hear all kinds of nonsense over the next few months about how "complex" the budget is and that how many will suffer without state support. Of course, we also heard the same kind of nonsense when conservatives called for welfare reform and now even most on the left agree that welfare reform was a huge success.

We need a governor with the will to slash. I’m pretty sure Corzine lacks that will.  

By Anonymous Jim - Parkway Rest Stop, at Sun Jan 29, 09:34:00 PM:

The state cannot tax its way out of this mess. I don't even want to hear that "we need to do both". Baloney! I am not willing to accept any new tax in this state unless and until meaningful spending cuts occur and every single person with a no-show job loses it.

Additional taxation will serve only to drive businesses and affluent residents to Pennsylvania.  

By Blogger TigerHawk, at Mon Jan 30, 10:07:00 AM:

Jim, I agree with you, so perhaps my point -- which was that the circumstances of any political deal would probably require new taxes whether good policy or not -- was poorly made. Since we are going to lose on the new taxes (having lost the election), I was voicing my support for a sales tax on clothing.  

By Blogger Michael Martin, at Wed Feb 01, 11:35:00 PM:

I appreciate your thoughtful commentary on N.J. taxes and actually found myself respecting a Republican's opinion. The incredible amount of boroughs and agencies in the state is indeed a labryinth; in the same vein, some are calling for combining the many districts into one to save money. One of the major problems is that our state taxes are sent to the federal government to the tune of receiving $.57 for every $1.00 taxed. I also agree that some form of taxation, as regrettable as it might be, may be needed to close the $6 billion budget gap. Clothes taxes, according to last week's 'Reporter's Roundtable,' may not be at the top of the list, though, because of issues with NY-bordering counties. An increase in the gas tax may be the most viable of unattractive options. One thing that Corzine is doing is floating ideas out there and doing consulting; he is also cutting some agencies and has made some major cuts to politically-appointed jobs in the governor's office. I would ask that you give him a chance, since I understand that you don't have the same enthusiasm for his tenure as I.  

By Blogger Counter Trey, at Tue Mar 21, 03:59:00 PM:

Well, TH, Corzine is not proving to be any different from his Democrat predecessors. A 9.2% increase in NJ state spending is neither a freeze nor a cut, as Enlighten eloquently points out:


After all the teeth gnashing and hand wringing over how to close that darned complex spending gap, Corzine proposes one of the biggest spending increases in NJ state history. Anyone who was paying attention should not have expected anything better from Corzine, one of the most liberal spenders in the Senate.

So, after several years of threatening to move my business and family out of NJ, my wife is finally joining the chorus. Bucks County, PA--home of the 3.07% flat income tax--is a nice place to live and work.  

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