Recently, The Record of Hackensack reviewed Governor Christie's first six months in office. Reporter John Reitmeyer reviewed the governor's promises kept and promises not met in a front page article. Governor Christie's most notable accomplishments to date: no state income tax hike, public workers will now pay 1.5% of their salaries for health care, and no pensions for part time state workers. Governor Christie was also successful in pushing through a 2 percent property tax cap. In the works are the following initiatives: an economic growth agenda with more ‘public-private partnerships," strengthening "pay-to-play" laws, and greater transparency for local governments. Other promises of the governor are not close to becoming law: relying only on recurring revenue for the budget, eliminating dual office holding, cutting the state income tax for all taxpayers, and consolidating renewable energy manufacturing initiatives under "Renew NJ."
In the gubernatorial campaign as well as during the primary Chris Christie said he would maintain property tax rebates. Once in office the governor ended the rebates because the alleged $10 billion deficit for the 2010-2011 fiscal had to be closed. In essence, eliminating tax rebates was tantamount to a tax hike.
Although Governor Christie gets at least a B+ for rhetoric regarding fiscal conservative principles, so far he gets a total grade of C+ because he balanced the budget on the back of suburban taxpayers. In order to balance the budget the governor did not implement any "shared sacrifice" in the so-called special needs districts throughout the state. Aid was cut across the board in virtually all school districts, but the already minuscule state aid that suburban towns had been receiving was cut to zero in some municipalities and reduced to crumbs in others. In other words, Governor Christie exposed the income tax for what it is — a giant redistribution scheme courtesy of the State Supreme Court.
The worst tax policy is raising one tax in order to lower another. That was the promise of the 1976 income tax — the state would impose a "modest" income tax to provide tax relief to homeowners whose property taxes were ‘onerous." Here we are more than three decades later and the 2.5% flat tax has been replaced with a steep progressive income tax and New Jersey's property tax is the highest in the nation. In short, state government has failed to provide tax relief. But more importantly, state and local spending has increased well above the inflation rate during this period, while state debt has exploded.
The only way to provide lasting tax relief to the people of New Jersey is to phase out so-called state aid as quickly as possible so local communities would be able to decide how much they want to spend on schools, police, fire, etc. Of course, this means passing a state constitutional amendment putting school funding out of the reach of the State Supreme Court.
If Governor Christie would take on this initiative, then the national media would be justified in calling him a conservative hero. Governor Christie could be on his way of becoming a national fiscal conservative champion if he articulated the following: the income tax will be phased out as quickly as possible, the sales tax would be reduced by at least two percentage points — from 7 percent to 5 percent — so education and other decisions would be made by citizens in their municipalities; corporate taxes would be cut freeing up resources for businesses to expand in the Garden State and making New Jersey more attractive for all businesses.
In short, we do not need more "public-private partnerships" — a code word for crony capitalism; we do not need more top down, trickle down economics, which is what "state aid" is all about; we don't need the governor or the legislature micro managing local institutions. We need good old fashioned policies that work-free enterprise and limited government.
Murray Sabrin is professor of finance at Ramapo College. He was the Libertarian Party nominee for governor in 1997 and a Republican candidate for the U.S. Senate in 2000 and 2008. Check www.MurraySabrin.com for more of his writings.