Thus far, the parallels between the gubernatorial campaigns of 1993 and 2009 appear striking. On the one hand, the Democratic Governor has toured New Jersey in an effort to present bold, politically risky solutions to the enormous challenges confronting state finances. On the other, Republicans have exploited popular resentment of our state’s high cost of living and opposed efforts to achieve fiscal solvency. Yet those who think the coming campaign will mirror the anti-tax revolt of 1993 should consider the consequences of that election and its significant impact on our state’s current fiscal health.
On Thursday, New Jersey lawmakers, lobbyists, and business leaders made the annual Chamber of Commerce sponsored train trek to the nation’s capital. State Senator Jennifer Beck (R-Monmouth), rumored to be on Chris Christie’s shortlist of candidates for Lieutenant Governor, criticized Governor Jon Corzine’s handling of fiscal issues. Pointing out the failure of his asset monetization plan, she asked, “What’s his legacy?”
Former Bogota Mayor Steve Lonegan, himself in hot pursuit of the Republican gubernatorial nomination, believes the state’s problems can be solved by implementing tax and spending cuts with the zeal of a “kid in a candy shop.”
Senator Beck, Mr. Lonegan, and their fellow Republicans fail to recall their own party’s legacy of fiscal irresponsibility. In the aftermath of Christine Todd Whitman’s 1993 victory over Jim Florio, Republicans enacted the very policies that led to our present predicament. According to a 2001 report published by New Jersey Policy Perspective, Whitman Administration budgets were:
… dangerous to the state’s economic health. New Jersey cut its income tax more deeply than other states and reduced more than 40 other taxes. This tax cutting went along with increased, not reduced spending. So, despite unprecedented prosperity, New Jersey never got its budget in true balance, usually spending $400 million more than its current revenues.
The use of one shot revenue sources, increased borrowing, and the numerous withdrawals from so-called savings accounts ultimately resulted in a reduction of aid to municipalities and an increase in property taxes. The last time Republicans controlled the State Capitol they robbed Peter to pay Paul, growing the size of government while taking credit for significant cuts in income taxes; cuts that only transferred the burden to towns strapped for cash in the face of shrinking assistance from Trenton.
Governor Corzine announced in his 2008 State of the State Address that New Jersey needed to restructure “our fiscal practices, balance sheet, and most vitally, our culture” or “our options, our priorities, and our future will be continually constrained.” One year later, he faces criticism over his inability to win passage of proposals such as the monetization plan and pension payment deferrals. However, upon considering the Governor’s quiet success at reigning in runaway budgets through spending cuts and state workforce reductions, a different picture emerges.
New Jersey’s budget for Fiscal Year 2009 spends $600 million less than it did last year. That is the largest year to year decrease in state history, and three times larger than any reduction in the past. Moreover, it dedicates $650 million toward debt reduction, resulting in a savings of $675 million over the next five years. Perhaps most importantly, this budget moves us closer (from $1.8 billion to $600 million) to eliminating the use of one-time revenue sources, a gimmick employed in the past by Democratic and Republican Governors alike.
According to a recent article in the Philadelphia Inquirer, Mr. Lonegan would veto programs that he believes are wasteful or “out of step with his conservative view.” Like most of the naysayers in his party, specifics are not the former Mayor’s strong point. However, the question begs to be asked, where would Republicans cut? Would they reduce the $16.7 billion – fifty percent of the overall budget – allocated for property tax relief? Or would they prefer to cut the $11.5 billion allocated for aid to public schools?
Through consolidation of departments, this year’s budget already reduced the cost of state government by $300 million. The size of the state workforce has been reduced by 2,000. Legislative pork in the form of Christmas Tree expenditures have been eliminated. There are no new taxes, and none of the existing ones have been raised.
The failure of Governor Corzine’s asset monetization program does not erase the significant progress he has made in restoring sanity to fiscal policy. Christie Whitman won in 1993 because she painted Jim Florio as a tax and spend liberal instead of recognizing him as the pragmatic problem solver that he was. As the present campaign unfolds, Republicans will look to the same tired playbook. It is important for Democrats to push back against these criticisms, point out the Governor’s record of responsibility, and remind voters what happened the last time Republicans were in charge of New Jersey’s purse strings. In some ways, 2009 may resemble 1993, but it diverges in one crucial respect: we know how the story ends.