Road To Ruin

Add the Wall Street Journal to the list of those opposed to Governor Corzine's toll road proposal. The Journal's Saturday editorial repeated the themes that have become prevalent here at NJ Business Matters,

Essentially, the state would be issuing new debt to pay down old debt. There would be an obligation to pay off bondholders and pay a dividend to the state. Mr. Corzine is betting that this bond authority can be made independent enough from Trenton's politicians to guarantee a regular revenue stream that couldn't be spent on the usual political payoffs. But the pols have a way of getting their clutches on such pools of surplus cash (think Social Security)...

As the Governor fine tunes his budget and state government braces for cuts that taxpayers and business owners have been demanding, the Journal levels with us and acknowledges that controlling New Jersey's spending is the only way to work ourselves out of this debt. In the last 20 years state revenues have grown at a rate of about 3% annually. Spending has grown by 7%, and NJ has made up the difference with some tax increases, but mainly with borrowing. Hence, state debt has increased by nearly $30 billion since 1990.

Excessive spending created the situation and reduced spending is the clearest way out of it. As the editorial closes,

Mr. Corzine's toll-hike plan is well meaning but unlikely to work and is already encountering bipartisan opposition. If it fails, he ought to consider the only real solution, which would be a state constitutional tax and spend limitation. He'd be a hero to taxpayers, and it might even save the state from bankruptcy.

That would be a step toward truly saving our state.