Delaying the Details Is No Solution
Posted December 19, 2008

This week brought more dire news on the New Jersey fiscal front, with the year-to-date budget shortfall climbing to $459 million as state revenues dropped more than $200 million short of projections – for the second time in as many months.

As the Atlantic City Press reports,

The state collected $1.7 billion in November, almost $201 million less than budgeted in June, the [Corzine administration] figures show.

Since the fiscal year started in July, state revenue has fallen nearly $460 million, or about 4.7 percent, short of projections.

November’s figures follow a $211 million decline in October, which tripled New Jersey’s potential budget shortfall this year to $1.2 billion.

If this weren’t dismal enough, the Philadelphia Business Journal reports that, according to New Jersey State Treasurer David Rousseau, the actual budget shortfall may climb even higher than the projected $1.2 billion. According to the Journal, gross income tax collections materialized at $61.1 million below estimates, sales tax revenue at $73.6 million below, and corporate business tax collections at $19 million below.

And it didn’t stop there. As the Philadelphia Inquirer notes, realty transfer taxes were 29.5 percent under projections; tobacco tax revenues on wholesale sales dropped 13.5 percent this year, and tax collections on alcoholic beverages fell by 2.5 percent.

What is the administration doing about it? Unfortunately, not enough.

State Treasurer David Rousseau stated, “These revenue numbers paint a sobering picture of how the deepening economic downturn is impacting New Jersey jobs, businesses, personal income and consumer spending…. November’s shortfall raises additional concerns about fiscal year ’09.”

And for his part, Governor Corzine noted the revenue shortfall “is indicative of a very weak economy.” Yet, after stating the obvious, he stopped short of offering his plan for a solution – a ‘delaying the details’ practice that has become all too common in the current administration.

The Inquirer reports, “Corzine said his staff was working on closing the budget gap, but he has yet to announce a detailed solution. ‘We will be out very early in the new year with the specifics on this,’ Corzine said.”

Rousseau echoed this non-plan. “We will look more closely at the current year problem once we get a report on revenues from December, which is one [of] our heaviest collection months of the year.”

While it’s understandable to want to gather and evaluate as much data as possible before making a decision, and while the current national economic situation has certainly impacted the state, New Jersey’s budget problems are hardly new! And while the state is trying to address the situation in part by passing a “stimulus” package of legislation, the real solution – as we’ve said countless times before – is not in spending of any form but rather in enacting drastic, across-the-board spending cuts.

To deal with the problem, many in the state legislature are calling for a legislative review of the budget to determine where to cut spending. State Senator and Budget Committee Member Kevin O’Toole said, “It’s not enough for the governor to say he’s taking action…. The Legislature should sign off on whatever steps he is taking to deal with plummeting revenues.”

Fellow Budget Committee Member Senator Phil Haines agreed, noting: “The entire state deserves to know what the governor is planning to end this deficit spending…. The cuts he is making should be transparent and based on taxpayers’ priorities, not Trenton’s. They should be detailed to legislators who must answer to their constituents.”

We wholeheartedly agree. While Trenton promises a plan for action “very early in the new year,” New Jersey taxpayers bear the daily brunt of the budget fiasco today. With the pressing problems facing the state, it’s not enough to promise future solutions.

The time to act is now.

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