Top-Down "Stimulus" Means Little Real Relief
Posted October 17, 2008

Amazing. That’s the word that comes to mind when considering Governor Corzine’s economic stimulus plan, which he delivered    yesterday to a joint session of the Legislature. Unfortunately, the plan was not amazing due to an innovative, pioneering, or bold approach to energizing the state’s economy. Rather, it was amazing because even as New Jerseyans continue to face outrageous property taxes and skyrocketing costs of living, Corzine’s plan proposes more spending, bigger government, and no real tax relief for hardworking New Jersey families.

In short, the plan addressed four areas:

1. Providing assistance to those in need,
2. Directing support to short-term employment and economic activity,
3. Working to enhance the New Jersey’s business climate and long-term economic prospects, and
4. Addressing the state’s obligation to remain fiscally responsible even during a time of declining revenues and rising demands.

But instead of using this opportunity to cut wasteful government spending and lower the cost of living for New Jersey families, the governor advocated a spend-and-grow policy in which government is the one doing the spending and growing.

For example, Governor Corzine wants to devote $150 million to foreclosure prevention and neighborhood protection (what is “neighborhood protection,” anyway?) as well as appropriate $9 million for Legal Services of New Jersey and another $3 million for food bank assistance.

Naturally, we believe food banks are vital and driving down foreclosure rates critical, but the way to do it is not through more government spending but rather through tangible relief that leaves more money in taxpayer pockets.

Furthermore, Governor Corzine wants to create a new “two year program to grow jobs and encourage capital investment in New Jersey.” – Yes, yet another government program. With it, Corzine aims to give small businesses $3,000 for each incremental full-time hire that stays with the company for one year. Again, we believe supporting small businesses, which are the lifeblood of our economy, is great, but the way to do it is not to create a new program that hands out money (after it goes through bureaucratic hands) but rather to reform the underlying system that makes it so difficult – and so expensive – to do business in New Jersey in the first place.

In all fairness, Corzine’s plan does ask the legislature to expand the senior property tax freeze and raise the cap from $53,000 to $80,000. Technically, therefore, he can say his plan does provide tax relief. But what about the of middle-class families in the state struggling not only with their mortgages but also with the costs of educating their children and fueling their cars for their daily commute to and from work? For them, unfortunately, no real relief is in sight.

Altogether, Corzine estimates the cost of the stimulus package (prior to receiving any federal funding which may come in) will be $150 million. He indicates he has asked his cabinet to start “cutting back planned equipment purchases, consultant contracts and lower priority programs” to pay for the plan and says that even more cuts will be necessary.

Still, he promises that “spending will match revenues and at the end of this fiscal year, spending will be less than the $32.9 billion approved in June.”

While we certainly hope that is true, we continue to hold that real stimulus and economic growth will come to the state not when Trenton views bigger government and more spending as the solution but when the state once and for all looks to itself as the first line of spending restraint and implements tangible, long-term tax relief for New Jersey families.

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