Friday, April 14, 2006

More on the New Jersey Budget

Enlighten New Jersey spends a little blog real estate to remind us that "There Are No Cuts In Governor Corzine's Budget."

Governor Jon Corzine and his supporters claim his proposed $30.9 state budget for 2007 is a fair and reasonable plan while acknowledging spending will climb 9.2% over last year’s budget of $28.3 billion. No matter how you try to spin it, Corzine’s budget will increase state spending by $2.6 billion.

Corzine has explained $1.63 billion of the increase with his proposed $1.1 billion payment to the state worker pension fund and his request for a $530 million increase in property tax rebates. So where is the remaining billion dollars in additional spending going? It’s being spent on the Governor’s priorities.
Conveniently, the Governor's Budget in Brief provides a detailed list of different budget line items that have either increased or decreased. Enlighten pointed out a few highlights, but some summary data would also be useful to emphasize the magnitude of the problem.

State Operations - $268,887,000 increase
  • 16 line items increased, totaling $690,608,000
  • 39 line items decreased, totaling $421,731,000
Two of the decreases, totalling $125 million, allegedly shift costs to the federal government. Given that New Jersey typically gets back 57 cents on every dollar sent to the feds, I am highly skeptical about the opportunity here.
Eighteen, for $108 million, come from "efficiencies" in each of the departments. There is no detail, as far as I can tell, about how the governor plans to make the bureaucracy more efficient. To gain efficiency in a business sense (our governor is a businessman, after all), we either have to produce more government services for the same cost, or produce the same government services for a lower cost. Enlighten points out that the state employs 154,700 people. 80,900 are full-time employees, which means that each full-time employee must produce an extra $1,340 worth of services to achieve $108 million in "efficiencies." At $40 / hour, that's 33.5 hours of extra work for each employee, or the equivalent of of 1,355 man-years of work. Think the unions will stand for that?
Four items worth $95 million aren't really spending decreases, because they reduce fund balances (Prescription Fund, Division of Pensions/Pension Fund, Governor's Contingency Funds, and Contingency Funds). This exactly the kind of budget trick the governor told us he wouldn't use.
Four line items, totalling $28 million, appear to be related to staffing reductions, including the governor's salary. It was so kind of him to sacrifice his $250,000 salary in the face of a $4,500,000,000 hole -- we're 0.0055% of the way there now!
Finally, there's a one-time savings similar to the campaign funding Enlighten pointed out -- we are "saving" $600,000 by not funding the Governor's transition as we did last year.

Grants-in-Aid - $885,514,000 increase
  • 36 items increased, totaling $1,708,960,000
  • 76 items decreased, totaling $823,446,000
The governor finds more creative ways to give away our money. I suppose I should be encouraged by the $250,000 reduction to Weehawken Arts. The largest Grants-in Aid "reduction" is $215,000,000 attributed to the Hospital Provider Assessment. This is really a half of a new, $430,000,000 tax (Budget in Brief, page 6). Calling it a cost reduction is nothing more than a big fat lie.

State Aid - $1,007,679,000 increase
  • 15 items increased, totaling $1,165,754,000
  • 19 items decreased, totaling $158,075,000
The big increase, $744,117,000 to the Teacher's Pension and Annuity Fund, dwarfs all of the savings combined. Even excluding this pension funding, the increases are still more than 2.5 times the decreases. This is a "hard choices" budget? Hardly.

The bottom line, again from Enlighten New Jersey's post:
So it goes throughout Corzine's budget – a small cut here and a large increase somewhere else in his budget plan In the end, Governor Corzine has funded his priorities and his priorities are costing the state’s taxpayers an additional $2.6 billion.

Tags: Jersey, Taxes, Budget