New Jersey is borrowing money for transportation costs and continuing to underfund its pension obligations, yet despite dire revenue forecasts, it’s time to cut taxes!
This is commentary from political blogger and cartoonist Rob Tornoe.
New Jersey is borrowing money for transportation costs and continuing to underfund its pension obligations, yet despite dire revenue forecasts, it’s time to cut taxes! I’m a cartoonist, not a mathematician or data specialist. Yet, all it takes is a cursory look at the budget to see the state faces a fiscal tornado that is barreling towards us at an increasing pace.
First, let’s take a peek at the state’s transportation costs.
While Christie inherited a bankrupt transportation trust fund (remember Corzine’s mistaken attempts at asset monetization?), he has refused to take any steps to repair the situation, such as raising the gas tax. Instead, he has relied on gimmicks, like allocating money set aside for the killed Hudson tunnel project, to keep it afloat. Now, he’s borrowing $260 million to replenish the fund, even as expenses are expected to rise to $646 million by 2016, with no way to pay for them.
Taking a look into pensions makes the dark path ahead seem even darker.
Both parties worked together to put off any heartache by phasing in full payments over seven years. That means while Christie can allocate just $1.7 billion towards the massively underfunded obligation and claim he made the full payment (this year he only paid $500 million), looking forward to 2018, that payment will balloon to nearly $5 billion. And that’s only if things remain the same.
The national Government Accounting Standards Board is about to approve new rules requiring pension systems to calculate their return on investment more conservatively. This could have the direct effect of increasing the state’s pension payment in 2016 from $3 billion to $5 billion. Ouch. Christie’s own tax cut proposal, a 10 percent across-the-board cut, will do little to help grow the economy since those that could use the money most receive the least. How that is a formula for a Jersey Comeback is anyone’s guess. What is less debatable is how much these silly tax cuts will cost the state. When fully phased-in in 2016, they will cost the budget a whopping $1.5 billion a year.
By 2018, the combined costs of pensions, transportation and Christie’s tax cut would comprise 19 percent of the state budget, according to The Star-Ledger. This is a steep increase from the 4.9 percent the state can’t even afford today. All this data led Star-Ledger Editorial Page Editor Tom Moran to conclude, “New Jersey is to America roughly what Greece is to Europe.” Of course, Christie will have us believe that all of these figures are not important, because a tidal wave to cash and job creation will follow his tax cuts to the rich.
As Dr. Evil would say, “rrrriiiigggghhhtttttt.”
It’s a shame. During his first two years in office, Christie actually worked towards putting the state’s fiscal house in order. And on items like these budget-crippling six-figure sick time payouts, he’s 100 percent right.
But when it comes to all this magical tax cut pixie dust, Christie is proving his ambition for national politics is larger than his desire to truly fix what ails New Jersey. Maybe he looked at the books and saw that New Jersey really was an unfixable mess, and thought it was best to get out while the getting is good. When the town of Hamelin, Germany refused to pay the pied piper for ending their rat infestation, he responded by taking the lives of their children. Now, after years of not paying the piper, it seems our politicians are perfectly content with sacrificing our children for short-term political gain.