Op-Ed: Here’s how New Jersey can cure its budget woes

There's no way to sugarcoat it: New Jersey is mired in a budget crisis of historic proportions, and no matter what Governor Corzine does to address it, there’s simply no way to please everyone.

The good news is that a fair and compassionate approach to addressing our budget woes is also the most fiscally responsible approach.

Recently, more than 40 of New Jersey’s top economists and public policy experts wrote to the governor and said that it is just bad economics to try and solve our budget crisis by cutting the services lower- and middle-income residents of New Jersey rely on.

In fact, the experts — including Doug Massey of Princeton and Henry Coleman of Rutgers — argue it is more economically prudent to take in revenues from residents in the top 4 percent income bracket (above $250,000) than to cut spending targeted at lower- and middle-income households.

The approach they championed – first proposed by the Better Choices Budget Campaign, our coalition of 38 groups including tenants, labor, environmental and others – calls for protecting essential services through fair, targeted revenue increases. So far, Corzine has commendably taken some steps to share more of the burden of the recession with the wealthiest. But more needs to be done to maintain vital services and invest in a strong New Jersey.

Simply stated, too many of the planned $5 billion in budget cuts impair critical services that help working families make do in this economic downturn: After-school programs that let parents keep their jobs, job training and GED preparation so people can secure jobs. Health care for struggling families. Nursing home support for our seniors. Property tax relief for lower- and middle-income homeowners and tenants.

This isn’t trimming government fat; these proposed budget cuts go straight to the bone.

Proposals

The Better Choices plan proposes the following steps to prevent many of these cuts:

ä Doubling the surcharge on the corporate business tax.

ä Asking two cents on the dollar more of residents making between $300,000 and $400,000.

ä Protecting our environment while generating revenue by tripling registration fees on polluting, gas-guzzling SUVs more than 5,000 pounds.

These are just a few steps that could mitigate some truly disastrous cuts and give lower- and |middle- income families some relief, and we urge legislators in Trenton to adopt them.

We all know the familiar argument against asking corporations and the wealthiest few to chip in during a budget crisis, that it will cause them to leave the state.

This has actually been shown to be false. Just last year a Princeton study found that New Jersey’s 2004 tax increase on half-millionaires essentially led to zero migration of wealthy households. Another study, conducted at Rutgers, surveyed 150 top executives and found that more than 95 percent of them were committed to staying in New Jersey.

Reasons to stay

The reasons they cited for wanting to stay? Our well-trained workforce, great schools and access to quality health care – all of which require public investment. Given that, one could argue that an approach of “cut, cut, cut” is, in fact, the approach that could drive businesses away.

To others who simply say our problem is overspending, we ask: Which services do they think we have too much of?

Are our roads too safe?

Is our air or water too clean?

Are our children’s classes too small?

Is tuition too low?

Is our health care too good?

The real risk we face is underinvesting in areas that make New Jersey a great place to live and do business.

In addition to restoring vital services through sensible revenue increases, we also need to start talking about long-term fiscal planning.

Even in the best of times, New Jersey suffers from a multi-billion dollar gap between what it needs and what it raises, and most economists expect our national recovery to be slow.

Meanwhile, more than $4 billion in the current budget comes from one-year fixes and even more is from expenses put off for another day. A discussion of long-term solutions to our fiscal problems is long overdue.

The governor has taken some steps to fairly spread the burden of the economic downturn. We commend him for adopting many of the revenue proposals that we proposed last year, in particular, revenue increases aimed at wealthy residents making more than $400,000. This is a solid step forward toward real shared sacrifice.

If our legislators adopt these measures and the proposals outlined above, we will be able to restore vital services in a fair and compassionate – and yes, fiscally responsible — way.

Eva Bonime is the executive director of the New Jersey Working Families Alliance and coordinator of the Better Choices Budget Campaign.

Originally available at: http://www.northjersey.com/opinion/bonime_061109.html?c=y&page=1