New Year.Same Fiscal Fiasco
Posted January 3, 2008

Over the recent Thanksgiving and Christmas holidays, millions of motorists took to New Jersey’s highways and byways for journeys both long and short.  We sincerely hope they enjoyed their trips because soon, traveling the same highways and byways may cost them double what it did this year.

This Tuesday, in his State of the State address before a joint session of the state legislature, Governor Corzine is expected to lay out his plan for monetizing New Jersey’s toll roads.

While few details are known about the plan, which has been the subject of speculation for months, the New York Times reports that “[i]n general, it would involve borrowing money by using toll increases as collateral.  Tolls on state roads including the New Jersey Turnpike and the Garden State Parkway would rise considerably in the years ahead, but Mr. Corzine has not specified by how much or when.” 

According to Newsday.com, however, at least a 45 percent increase would be necessary simply to make needed repairs on the Parkway and to widen the Turnpike.  Fixing the roads, though, is not Corzine’s sole aim, and his real goal in hiking freeway fares is to address the state’s serious fiscal fiasco.  Indeed, Newday.com reports that “Corzine wants to use money from the deal to pay at least half of the $32 billion in state debt….”  This debt, the article continues, has doubled since 2000, and this year the state will spend approximately $3 billion, or almost 10% of its annual budget, simply to pay it down. 

“Without reducing our debt burden, our financial situation will not allow us to make needed investments in critical infrastructure or rationally balance the books,” Corzine noted.  “That doesn’t mean we can’t and it doesn’t mean we won’t reduce spending.  We can, and we will.  But it is the ever-increasing debt burden that is sucking the life out of the state’s finances and our ability to serve our citizens.” 

We’ve been saying the same for years regarding the life-sucking nature of the state debt.

Indeed, this debt burden, coupled with a history of unwise fiscal decisions, has landed New Jersey among thirteen states nationally facing budget shortfalls in 2009.  According to the Center on Budget and Policy Priorities, which recently announced this ranking, in addition to facing a budget gap, New Jersey also “face[s] a structural budget imbalance, which means that revenues routinely grow more slowly than the cost of providing the same level of state services.” 

The Center’s report goes on to note that “[i]n states facing budget gaps, the consequences could be severe – for residents as well as the economy.  Unlike the federal government, states cannot run deficits when the economy turns down; they must cut expenditures, raise taxes, or draw down reserve funds to balance their budgets.” 

It’s no secret that revenue in New Jersey does not match spending.  Yet, while the governor’s solution is to concoct new taxes and fees to “close the gap” and fund his exorbitant spending initiatives (i.e. $450 million for stem cell research), we continue to maintain that the real solution is not squeezing every last dollar from hardworking taxpayers but rather once and for all changing current spending habits that are reminiscent of a five-year old who still believes money grows on trees. 

In 2008, we challenge the governor and the state legislature to begin to exercise the same fiscal restraint that New Jerseyans exercise each and every day in their own budgets.  Hiking tolls will not solve the long-term problem of persistent fiscal mismanagement.  The state needs to set – and keep – a New Year’s resolution to fix the root problem of New Jersey’s financial crisis – namely, overspending – and to stop passing the burden of payment on to future generations.

Over the next few weeks, Governor Corzine will be holding town hall meetings across the state to solicit citizen input concerning his toll plan.  We encourage you to check out the locations and register to attend a meeting near you.  Make your voice heard.  If enough people speak out against the fleecing of New Jersey, we can make a difference!

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