Monday, March 13, 2006

Budget Priorities

Enlighten-NewJersey says, "Tell Corzine No Tax Increases - Cut Spending."

The Courier Post recently conducted a survey on how Gov. Jon Corzine should balance the state budget. The number one choice was “cut government jobs and benefits”, favored by two thirds of the voters. The second highest vote getter was “cut services”.
The choice Governor Corzine seems to be leaning toward, “increase taxes and spending”, is not an option favored by the people of New Jersey, at least not taxpayers reading the Courier Post.

I agree with Enlighten (surprise!), and decided to send the governor a little note about the subject. Here's what I wrote, via his email web form:
Dear Governor Corzine,

With regard to the Fiscal Year 2007 budget as briefed in your recent town hall meetings, I believe you have your priorities exactly backwards. The slides presented talked about how dire the spending problem is, yet did not offer a coherent plan to reduce spending. In fact, it appears that your budget plan increases spending by over 17% from the current fiscal year.
I find this level of increase to be totally unacceptable. I demand that you reduce spending significantly. From 1997-2004, state expenditures (from your presentation) grew at an annual rate of approximately 7.3%, while Gross State Product grew at an annual rate of 5.5% (unadjusted for inflation). Had we held state spending growth to the rate of economic growth, our 2004 expenditures would have been $22.4 billion rather than $24.5 billion, and we would have spent $12.6 billion less over the cumulative seven year period.
Your plan, as presented, states that expenses "will grow" at an annual rate of over 10.5% from 2007-2010, despite projected revenue growth of only 3-4% annually.
It would be appropriate, in my opinion, to set a baseline for your budget based on the growth in the economy over the long term (say, 10 years or so), so that the sustainable level of revenue based on current taxes covers spending. If the sustainable revenue does not support a new program, then that program must not be initiated. It would be much more fair to the taxpayers, and more favorable to the business climate, to have a stable tax code over a long period, rather than having the constant threat of new taxes deterring financial decisions.
There are reports that the state has collected some $500 million in excess of this year's budgeted revenue, due to the strength of economic growth this year. Those funds must not be spent frivolously, but should be used to either reduce next year's tax burden, or to satisfy some of the unfunded liabilities you highlighted in your briefing. It would be irresponsible to take this excess revenue as "found money" and expend it to the for other purposes.
Governor Corzine, it is vitally important to the future of our state that you get our spending house in order. The state collects more money than it budgets, yet every year reports a "budget hole" in the billions of dollars. Break the cycle and restore fiscal sanity to our government by stopping the spending increases.

Tags: New Jersey, Spending, Taxes, Corzine