| By including systemic drivers of swelling expenditures among the challenges his program will tackle, Corzine’s departs from the pattern of his Democratic predecessors. Democratic governors like Byrne and James Florio certainly pursued economies in government, but as free-floating and episodic, rather than integral to their tax reform programs. They focused entirely on shifting from grossly regressive property taxes to a progressive income tax.
Corzine’s approach is remarkable for transcending partisanship. In attacking the built-in formulas for school districts and for public employee pensions that propel increased expenditures without increasing service, he is taking a page from the Republican playbook. The Republican mantra since the Reagan realignment has been to cut spending (at least, cutting spending on education, transportation, and social investment).
This hearkens back to the debate in 1985 on the mandate of a precursor initiative, the State and Local Expenditure and Revenue Policy (“SLERP”) Commission. Democrats wanted a reprise of the blue-ribbon commission that Governor William T. Cahill had established in 1970 focused on the inequities in New Jersey’s tax system; Republicans insisted the SLERP commission should focus on ways to slash spending. The SLERP commissioners proposed 111 recommended reforms, roughly half of which made their way into law; but the recommendations for more efficient spending did not address what Corzine calls “cost factors that drive up spending and keep increasing the tax burden.”
Corzine’s integration of “cost factors” with tax shifting risks goring a traditional Democratic constituency, public employees, without rallying any Republican legislative support for the package: Republican strategists are already calculating how they can up the ante in demanding deeper spending cuts in order to give themselves an excuse to vote against any tax package.
But Republican legislators are not the primary constituency for Corzine’s program. New Jersey’s homeowners are. It is they, not posturing politicians in Trenton, who need to be convinced that the Governor has a real program for permanently containing property taxes.
Sustainable reduction in property taxes requires tight caps on local tax increases – an element of Byrne’s tax program that Corzine proposes to revive. But the caps will only prove sustainable if the cost drivers are trimmed. Otherwise Trenton will again cave in to pressure from local officials to gut and then kill the caps, as it quietly did during Thomas Kean’s administration.
Corzine does, to be sure, offer some ideas that deserve skeptical scrutiny by the four special committees the Legislature appointed this week to hammer out a detailed program. The privatization of assets like the New Jersey Turnpike, in particular, seems to throw away revenue potential over the long term in order to cash in quickly in the short – more of a boon to investment bankers than to taxpayers – and should probably go the way of the Governor’s misguided proposal for self-service gasoline on that same roadway.
On balance, however, the Governor has launched a far-reaching initiative that can make as much a mark on New Jersey public finance as Brendan Byrne did a generation ago. It is no guarantee of reelection – but the imminent collapse of the jerrybuilt policies of the past dozen years makes more of the same an even less likely bet.
Jeffrey Laurenti of Trenton is Senior Fellow in international affairs at The Century Foundation, a New York-based public policy research institution. |
