Almost all of New Jersey's 12 largest sources of tax collection are below last year's figures, and the Governor continues to look at new areas to cut. The OLS report on year-to-date budget numbers is available here, and notes that Corporate Business Tax collections are down 6.3% this year, among other signs that our economy is slumping.
The Governor has responded with basic economics: revenue is down, so we must reduce spending to keep our budget balanced.
From an excellent feature in Sunday's Star-Ledger,
According to information the state provided to Moody's Investors Service, the governor plans to save $100 million to $150 million by eliminating equipment purchases and discretionary grants, and is counting on $625 million more in savings from mandated 5 percent spending reductions. State Treasury officials said there is also $200 million in unspent funds from last year and another $200 million in fiscal year 2008 tax receipts....
In a private briefing with union leaders, he raised the possibility he'll cancel or postpone the raise owed to state workers next year, according to those who attended. Other state budget officials privately confirmed that is one of many options being explored....
Union leaders are adamantly opposed to canceling the raise or laying off workers. They also raise concerns over cutting any contribution to the pension fund.
Bob Master, a lobbyist for the Communications Workers of America, the largest state employee union, said unions view a higher-income tax hike as a way to essentially force a trickle-down, by getting wealthy people to send their money to Trenton, where it can go to work on infrastructure projects or other stimuli.
The Governor is right to suggest that cuts made in other states may need to be mirrored here in New Jersey. As for Mr. Master, he is advocating for his members, but his ideas would further sink the state's economy. The idea of using Trenton as a redistribution of wealth center has been a proven failure in this state for a decade - and that was during good economic times. The reality is that New Jersey's public employee system remains unsustainable, and that altering it will be necessary to help fix the state's budget.
Comments