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This is an extraordinary moment for the State of New Jersey, or at least it has the potential to be. A decade-plus of denial is ending; the time is at hand to come to grips with a government finance crisis that severely weakens New Jersey's ability to meet the present and future needs of the people who live here.
So we're glad that Governor Corzine has put matters out in the open. He is right to frame this as the high stakes debate that it is. He us right to challenge critics to be honest in offering alternatives and to get past the wholly inadequate cry to cut waste, fraud and abuse. He is right to say this job is what he was sent to Trenton to do, and to recognize that fixing this overarching problem is worth risking his governorship for.
If you believe state government has a major role to play for social justice and economic fairness, to help everyone in New Jersey reach his or her full potential, then you must conclude that taking on this fight is good. You understand that only upon passage of the state sales tax in 1965 and the income tax in 1976 did New Jersey become a modern state, fully engaged in promoting a high quality of life. And you recognize that New Jersey's relatively short tenure as a first-class state is very much in jeopardy today because of the ticking time bomb of horrendous fiscal decisions dating to the mid 1990s.
Governor Corzine on January 8 delivered a clearheaded, straightforward State of the State talk that is especially encouraging to those of us who've been saying for years that something needed to be done. NJPP sounded what at times was a lonely warning, dating back to publication in August 2001 of Judith Cambria's prescient report, Take the Money and Run: How Fiscal Policy from the 90s to Now Threatens New Jersey's Future. That analysis pointed out mismanagement and gross neglect as serious as if laws had been broken. Judy's predictions for what would happen if corrective action wasn't taken -- unfortunately -- have come true.
NJPP's work in our first 10 years included many proposals for fixing New Jersey's finances. We called for increasing the state income tax on the wealthiest households and both raising and broadening the sales tax to reflect today's economy. To some extent, these steps have been taken. We called for reforms that would make the state budget process more open and accountable, some of which have been done. We called for meeting the state's transportation needs by increasing the gasoline tax, noting that almost every state has raised its gas tax since New Jersey last did so in 1988. And we've questioned the economic value of tax breaks for businesses handed out, mostly over the past 12 years, as New Jersey joined other states around the country in unproductive competition against each other.
Yes, we've done a lot of work in this area, but it is hard to imagine we'd ever have come up with what Governor Corzine has proposed. It's so new and different and outside that box that it is, frankly, hard to wrap your mind around. For better or worse, only someone from Wall Street could produce this sort of "big idea" in the form of a new entity to run the toll roads, raise the tolls and borrow massive amounts of money to put into three pots: maintaining the toll roads, meeting the rest of the state's transportation needs and paying off half of the state's $30 billion-plus in debt. Our job is policy analysis but we'll confess that the plan on the table is hard to evaluate in conventional ways. It would be equally tempting to immediately reject it whole or embrace its entirety. But neither is in New Jerseyans' best interests.
Certainly some toll increase makes sense, given the sorry condition of New Jersey's transportation infrastructure and our over-dependence on cars. Tolls have been kept artificially low by politicians lacking the courage to face the truth. One thing we want to look at, though, is whether targeting the increased costs only on toll-road users is the fairest way to do this. Governor Corzine was clear in his speech about rejecting tax increases for fear that New Jersey would "lead the league" in such categories as sales and income tax rates. Maybe he's right. But, maybe New Jersey should worry less about state-by-state rankings that politicians and journalists hold so dear, and more about how to lead the league in categories that really matter--like fewest bridges falling down or fewest working families getting sicker than they would if they had access to health care. These silent statistics might not show up in rankings but speak loudly about what kind of place New Jersey is. So we will examine what it would look like to use a combination of tolls and taxes.
We'll also use our voice to bring to the debate the need for a number of actions that need to be taken in addition to whatever debt reduction/ transportation funding plan passes legislative muster. Such as? Creating a state and local tax structure that is more fair and adequate. Adopting more budget and fiscal reforms that make it easier to follow the money and weigh alternatives. Recognizing that New Jersey's patchwork tax structure is really the symptom of a larger problem: fragmentation of the state into far more local governments and school districts than it would seem could be efficient and accountable. And taking a harder look at what businesses really do and don't pay in taxes and whether the current system is justified.
We'll point out how important it is to not only fill the hole, but also to erect a solid foundation where the hole was. And also that, as ambitious and comprehensive as the Governor's proposals might be, they still only deal with half the state debt and part of the state employee pension and health care funding shortfall that Corzine's predecessors irresponsibly created.
We'll weigh in on behalf of progressive values and fairness. We'll be constructive, but we won't simply accept the political realities of the moment. Political realities are often the obstacle to real change. As NJPP starts its second decade, we look forward to working with the Governor, the Legislature and the citizens of New Jersey to make this the state we know it can be. We respect and appreciate the candor and courage coming from the Governor's office. Considering where this state has been, that's a pretty good start.
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