Budget task force sees major fiscal challenges ahead for N.J.
Thursday, December 13, 2012 Last updated: Thursday December 13, 2012, 1:56 PM
BY JOHN REITMEYER
STATE HOUSE BUREAU
The Record
From The Political State blog on NorthJersey.com:\
No matter who wins the 2013 gubernatorial election,
New Jersey will continue to face some steep fiscal challenges unless major
budget reforms are enacted.
A new report on New Jersey’s finances released Thursday
by the State Budget Task Force said heavy debt, a grossly underfunded pension
system, looming federal spending cuts and an “eroding and volatile tax
structure” are all among the “difficult choices” the state faces in the years
ahead when it comes to budget policies.
The report, one of six the task force is compiling
at the state level, spelled out each major issue in New Jersey in stark terms.
The state will need to come up with $133 billion
over the next 10 years to meet infrastructure needs. New Jersey is also
carrying $33.7 billion in debt, which is more than the current state budget and
among the highest of all state’s per-capita.
The property tax burden in New Jersey has risen to
$25 billion statewide.
The state’s annual obligation to the public employee
pension system – a payment that has been skipped or only partially funded for
the last several years – will sit at $5.5 billion in just five years, which is
five times the amount Governor Christie put in the current state budget.
And since the state is relying on $12 billion in
funds from the federal government, even a 10 percent cut that could result from
the looming federal fiscal and spending policy changes generally referred to as
the fiscal cliff could cost the state $1.2 billion.
“Balancing budgets, to say the least, is going to be
a challenge,” said Richard Keevey, distinguished practitioner in residence at
Rutgers University’s School of Public Affairs and Administration and an author
of the report.
Christie, a Republican, has already said he’s
running for re-election in 2013. And Democratic leaders are waiting to hear
from Newark Mayor Cory Booker, who has expressed interest in challenging
Christie but has yet to make a final decision. State Sen. Barbara, D-Middlesex,
filed paperwork earlier this week to run for governor.
Other possible Democratic candidates include U.S.
Rep. Bill Pascrell, D-Paterson, state Sen. Richard J. Codey, D-Essex, and state
Senate President Steve Sweeney, D-Gloucester, and state Assemblyman Lou
Greenwald, D-Camden.
No matter who wins in 2013, they will have to
confront the significant budget issues spelled out in the report. One major question is whether tax hikes
would be needed, something Christie has resisted doing since taking office in
early 2010.
The report said a complete review of the tax and
spending structures at the state and local levels is long overdue.
The task force’s advisory board is co-chaired by
former Federal Reserve chairman Paul Volcker and former New York Lt. Gov.
Richard Ravitch. They started the project in 2011, and issued an overview
report in July 2012.
The in-depth report on New Jersey’s budget issues is
one of six state-level studies. The other state reports cover budget issues in
California, Illinois, New York, Texas and Virginia.
Both Volcker and Ravitch appeared with Keevey to go
over the New Jersey report Thursday morning at a hotel in Trenton.
They were reluctant to cast blame for some of the
major budget issues — such as the skipped pension payments or a reliance
one-shot revenue gimmicks — on any one party or governor.
“It’s very, very tempting to respond to the
inevitable questions about politics,” Ravitch said. “There were dumb things
done on a bipartisan basis.”
And though the report made a series of
recommendations — including more multi-year budget planning, regular funding of
the pension system, and the tax and spending review – the men did not advocate
for any specific solution, such as tax hikes or spending cuts. That is better
left to the elected officials, they said.
They also said the response to superstorm Sandy only
highlights the need for a sharp focus on the budget issues.
“It all comes back to the same question of
priorities,” Volcker said.
******
From Media Matters
http://mediamatters.org/blog/2011/03/07/doesnt-anyone-remember-christine-whitman/177285
"The first thing Christine Todd Whitman did upon taking office as governor of New Jersey in January was to cut the state's income tax. Then in July, as she signed into law her first state budget, the Republican cut taxes again while simultaneously closing the huge deficit left by her predecessor.
This is what her supporters call the Whitman miracle, the fiscal accomplishment that has sent her stock soaring among
New Jersey's voters and transformed her on the national scene from a political unknown into one of the Republican Party's newest stars.
But the key to the Whitman miracle lies neither in her political philosophy nor in her spending cuts, but rather in the fine print of her budget. Contained there is a series of arcane fiscal changes that some experts say amount to this: Christine Todd Whitman has balanced New Jersey's books and paid for her tax cut by quietly diverting more than $1 billion from the state's pension fund.Whitman calls what she did a "reform" of the pension system that puts it on a more "sound actuarial footing."
Others are less charitable. The one thing that even the actuarial consultants hired by the Whitman administration agree on, however, is that the chief effect of the changes will be to shift billions of dollars in pension obligations onto New Jersey taxpayers 15 to 20 years from now."
*****
My Comments-
And McGreevy and Corzine followed suit. All raided the pension fund or back doored it to allow increased spending and tax cuts so as to enhance their chances of reelection.
Essentially, then, the pension fund contributed to the political campaigns of all these past governors and is continuing to do so with Christie. He is not contributing nearly what is required.
I really thought the contributions were required by law but if you are the governor it seems the law doesn't apply.
And now there's a shortfall?
What a surprise!
It's all some sad BS perpetrated on retired workers, future retired workers and the New Jersey citizens.
And -
How about the federal government?
They spend trillions on "defense" (I don't know who we are defending against)
They spend billions on "The War of Drugs" and haven't won one battle yet!
They spend billions on Foreign Aid (much of which is used to arm foreign countries)
They spend billions keeping troops in countries such as Germany, Japan, South Korea, etc. Why do we have to have military outposts in these countries continually since WW II?
I think we all know why.
So tens of thousands of patronage jobs are made available for politicians to dole out and so military contractors and arms manufacturers (who employ cadres of lobbyists) can reap huge profits from taxpayer dollars.
Maybe it's time for the feds to stop all this wanton spending and start spending on our own people by helping to balance state budgets and improving our infrastructure!
They say "A fish rots from the head down" but in this case I think the whole fish (state politics and federal politics) are rotted !
I ask again, "What do you think??"
