NJ Fiscal Folly

Wednesday, February 15, 2006

Trenton Twaddle

The Corzine transition team report on property tax reform is a cynical piece of work. The basic thrust of the document is how to steer "reform" past the legislature, a state constitutional convention, and the voters. There's also an element of "bait and switch" involved: the enticement of slightly larger rebates is used to divert attention from the notable absence of specific reform proposals. "Pay no attention to the politicians behind the curtain!"

However, the most outrageous feature is the attempt to preclude any discussion of state spending simultaneously with tax changes. The document alleges that all state spending is already adequately covered by annual budget reviews, and therefore further discussion is unnecessary. This is simply not true.

For example, "Abbott school spending", which currently exceeds $3 billion per year, is based on a NJ Supreme Court interpretation of the "thorough and efficient" education clause in the NJ Constitution. Abbott spending is not subject to review or control by annual budgets. The only way to balance Abbott requirements against the state's financial resources is through a constitutional amendment.

Since funding and spending are intimately related, and since property tax reform would require a state constitutional convention anyway, why is it so illogical to consider spending issues like Abbott at the same time? Says the transition team, "combining the spending side with fundamental tax reform will doom the effort".

Maybe so, but let's get real. First of all, despite soothing phrases like "revenue neutral", "tax reform" is a code name for "tax increase", maybe not today but certainly tomorrow. The preferred method is usually some form of built-in escalator that lacks any trace of legislators' fingerprints.

More to the point, you don't cure a drug addict by giving him better funding. With an addict, lack of self-control destroys conduct and credibility. With NJ politicians, a history of disastrous financial practices nullifies any right to limit debate or obtain unconditional tax revenues.

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