| There are several reasons frequently cited as to why Governor Christie should not cut income tax, but there are other reasons which affect all of us that have received little attention. Certainly such a cut is not progressive as the middle class may save $100 while the wealthy save thousands of dollars. A reduction in property taxes is more equitable and what residents want. The continued lack of paying into the the pension fund only endangers further our credit worthiness and cost of borrowing, pushing the problem further ahead, and jeopardizing the fate of those who count on it. Reductions already made in his past budgets, have left gaping holes in the safety net and have resulted in increased government levies, fees, or taxes for lower and middle income residents who are suffering in the midst of a severely damaged economy.
The fact that tax collections are off $325 million through the first six months of the current year, not only exarcebates the problem but shows the governor is in no position to arbitrarily call for a self-inflicted wound through deliberately reducing the State's income stream. Republicans argue that reducing taxes will result in higher revenue, but higher revenue is much more a function of a broad-based, growing economy than it is of whatever small savings the majority of New Jerseyans would receive though a tax cut. The Garden State treasury would be better served if Christie concentrated on reducing the State's deplorably high unemployment rate.
Ever since Christie became governor, and not through his fault initially, the State has been cash-strapped. He admitted once in a moment of candor that upon taking office there were times when he was not sure the State would be able to pay its bills - a fact later reflected in a lower credit rating. Whether running a state or a corporation it is the leader who has the ultimate fiduciary responsibility to avoid bankruptcy. That means having sufficient income to meet expenses and obligations on a timely basis. Nonetheless, the State remains-cash-strapped.
What is less well known is the financial impact of the governor's policies on organizations the state funds through contracts and grants. He and his Treasurer have survived by pushing to the extreme outer margins their payment schedule to those whom the state funds. All vendors from Rutgers to the smallest non-profit group have suffered because the Governor has done little to increase revenue. As a result organizations that depend on government monies are being paid later and later and are being told a per-cent of funds needed to continue operations will be withheld until the end of the contract. The government now may only reimburse a company for leased space used in carrying out its contracted job, so if the company owns its own building the government may not reimburse the cost of mortgage, interest and other facility expenses. Organizations that rely on an indirect cost rate to cover administrative functions are having their rate reduced. Perhaps most ominous, the role of the Finance Department within State agencies is being reoriented so that the financial people report more directly to the Treasury and become less knowledgeable or concerned about the individual needs and welfare of groups they fund. The finance departments are gradually being stripped of employees and are following only the dictates of a State Treasury bent on a short term vision, compounded by Christie's belief in less government - all of which hurts the lives of middle class and poor alike.
What we have is a State Government which under Christie remains cash-strapped, is receiving insufficient income, and is passing the burden on not only to New Jerseyans in general but to the organizations which we rely on to provide essential services. State government has to contract out services, whether it's for professors, road pavers, or healthcare workers, but its policies are resulting in decreased and poorer services with companies increasingly facing the likelihood of extinction. Now with providers of essential services threatened and with the state generating insufficient cash, Governor Christie outrageously wants to decrease further the State's revenue through an unfair tax cut? I don't think so. |
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