Eileen Norcross of Reason ponders if Chris Christie can reform the Garden State:
“I’m gonna govern like a one-termer.” That’s the promise of New Jersey’s Chris Christie, who became New Jersey’s 55th governor this week. If true, it’s a welcome development, because fixing New Jersey’s fiscal mess isn’t a matter of mere accounting. It will require tackling institutionalized corruption head on. The Garden State’s budget has been crippled by spending schemes that largely benefit a well-paid and unionized public sector, itself a creation of New Jersey’s entrenched political class.
The magnitude of the damage is daunting. Last year’s $7 billion budgetary shortfall now stands at $8 billion and growing. The fiscal patches of 2009—stimulus money, tax hikes, and program cuts—spent their magic six months into FY 2010. With the nation’s highest property taxes (an average of $7000 per capita), an eight-bracket, progressive income tax, a $45 billion debt load, and the net loss of more than half a million residents since 2000, New Jersey is suffering the painful fallout of its long-running policy of fleecing residents to benefit politically-connected special interests.
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In essence, spending that should have been determined by the legislature has been decreed by the court, which claims it is upholding New Jersey’s constitutional guarantee to provide children a “thorough and efficient” education. The biggest benefactor of Abbott’s spending largesse is the New Jersey Education Association (NJEA), which is adamantly opposed to any attempt to rein in costs.
This is just one of the decades-in-the-making disasters confronting the state. Since 1990 local governments have added 45,500 new jobs. Nearly all of them are represented by one of a dozen unions, which have helped secure some of the plushest public sector jobs in the nation. It’s easy to see how property taxes have grown at twice the rate of inflation over the past decade. A government worker in New Jersey earns an average of $58,963, a police officer averages $84,223 (the second highest in the nation), and six-figure public sector salaries are commonplace. Compare this to neighboring Philadelphia, where the average police salary is $49,000. According to one estimate, of the $23 billion New Jersey raised in property taxes in 2008, $18 billion was spent on police, municipal, and teacher salaries.
The tab for public workers doesn’t end there. Factor in the state’s pension plan, currently under-funded by $34 billion. The New Jersey Taxpayers’ Association calculates pension payouts for the average teacher range from $1.6 million to $2.5 million, per retiree. For the average police officer, that range totals between $3.2 million and $6 million, per retiree.
As he takes office this week, Christie’s real challenge is to stop this exploitation of the state’s treasury by the public sector unions. Here are some easy ways to start. He can lead the charge in rooting out obvious public sector excess, such as massive cash payouts for unused leave, and paid time off for holiday shopping.
More difficult but still essential is changing the state’s budget rules. Christie must pull the plug on the Property Tax Relief Fund and reject the state Supreme Court’s Abbott funding requirements. He must return the state to a flatter income tax and put the revenues in the general fund. And finally, he must discontinue the fiction that this immense redistribution of revenues has anything to do with property tax relief.
Christie seems serious about his one-term pledge. He once told the unions he may declare a “fiscal state of emergency”—a move the public sector unions call “dictatorial.” That would allow him to void former Gov. Jon Corzine’s agreement to double union salaries in 2011. Christie also has strong words for the NJEA: “They need to get realistic that change is coming.” He supports both charter schools and vouchers, noting that competition will force failing schools to “change or perish.”
Of course, much like California, conservative/libertarian essays on New Jersey’s nearly-equally daunting Big Government woes are perennials, as this City Journal piece by Steven Malanga on “The Mob That Whacked New Jersey” from 2006 highlights. Hopefully Christie will have better luck than California’s Republication governor, who was more determined to get reelected and enjoy the perks of his job, than make the hard choices of governing.