For New Jersey: It's time to do the big things
Trenton, New Jersey
January 11, 2011
Lieutenant Governor Guadagno...
Members of the Legislature...
People of New Jersey:
It is my constitutional duty to report to you each year on the State of our State.
And today, it is my privilege to report to you that the State of our State is improving- getting better every day.
Why do I say that?State spending is down 9% in one year.
· The budget has been balanced.
· State taxes are lower- for the first time in a decade.
· The unemployment rate has begun to drop- and today is below, not above, the national average.
· Companies are beginning to take a second look at New Jersey.
Together, we have begun to do something no one thought was possible: we are turning our State around.
Without a doubt, there is much work still to be done.
But we cannot turn back now.
Make no mistake: New Jersey is coming back.
Think of where we were just one year ago:
· The FY ‘10 budget was over $2 billion in deficit- with the year more than half gone and our options shrinking fast.
· The state was actually in danger of running out of cash- within weeks of not being able to meet payroll.
· We faced a deficit for FY ‘11 that was projected to be $11 billion- equal to 37% of the budget- the largest deficit, in proportional terms, in the country.
· Property taxes had risen 70% in the prior 10 years.
· Independent analysts concluded we had the highest overall tax burden in America.
· Unemployment was at 10%- the highest in a generation, the highest in the region, and above the national average.
· Wealth, and jobs, and people were leaving our State.
· The New Jersey we love- the New Jersey of our youth- was in danger of slipping away.
Some were beginning to write off New Jersey, doubting we could change what the newspapers called our "old, hide-bound ways."
Back then, the state's largest newspaper opined: "taxes are too high as it is..."
Another paper put it simply: "New Jersey must change course."
The Day of Reckoning had arrived- and arrived with a vengeance.
We had a clear choice:
To continue our reckless ways, or change course and choose a new, difficult path- one that would require real political courage from all those who embraced the change.
Well, we did change course- decisively.
Today, step by step, we are putting ourselves on a better, more sustainable path- and pushing ahead on the road to growth.
Step one was to turn Trenton upside down -
To reverse the pattern of increased spending and taxing;
To upend the culture of burying problems instead of facing them.
You see, the right answer is to face big problems now ... Or face bigger ones tomorrow.
I believe in a culture of truth.
It hasn't always been easy- because some of the truths in front of us were not pleasant.
At the same time, everyone knew that the old direction was driving our State off a cliff- into the abyss of no growth, high unemployment, and a fleeing population.
But we did begin by turning the mindset of Trenton around, and today, with your help, New Jersey's comeback has begun.
The last year may have seemed like a long and winding road, but together, we have actually changed direction quickly.
Look what has happened in just 12 months.
· Within three weeks of taking office, we took immediate action to prevent a financial crisis and stabilize the state's finances.
· We balanced that FY ‘10 budget by holding back what spending could be stopped, and averted New Jersey's cash crisis.
· We enacted the first steps in reforming our system of pensions and benefits -- saving state and local taxpayers hundreds of millions of dollars.
· We enacted legislation to head off the looming crisis in our unemployment insurance system- preventing a tax increase of as much as $700 per employee for many employers.
· We made a down payment- with unanimous support in the legislature, by the way- on an education reform package which created a permanent interdistrict public school choice program.
· And we approved 6 new charter schools in New Jersey- a small first step... but with many more to come... Soon.
· We passed an FY ‘11 budget which restored some sense of fiscal sanity- it required spending cuts from every department of state government- but we closed that $11 billion budget gap- without raising taxes.
· Most importantly, we took action on the problem which the people of New Jersey have been crying out for us to solve- the growth of their property taxes.
· We capped that growth at 2% per year.
· Then, we made the cap real by limiting interest arbitration awards to 2% as well.
And in one year, New Jersey has gone from being a basket case to being a national model.
Those same newspapers who thought we were in deep trouble are now telling a different story.
One said, we have taken "the first step in a very new direction."
Another now says: "New Jersey is setting a national example."
So make no mistake: other states are watching what we do here.
Will we turn back, because the road is too hard? Or will we press on, because the future is too important?
New Jersey is getting recognized for taking on the tough issues that politicians have refused to touch.
We are showing other states that sometimes, to create real change, you've got to go all in and show a little Jersey attitude.
And this month, new governors are taking office across the country- Republicans and Democrats- many using New Jersey as the example of how they want to lead.
The stakes are high.
For example, one state- Illinois- has chosen a very different path.
They are in the throes of debating a 75% increase in income tax rates.
Is that what we want for New Jersey?
No. New Jersey intends to remain the leader, not only in turning around the national trend of out-of-control spending and taxes, but in finding the path to growth.
So on every one of these topics, we have more and bigger things to do.
We need to balance the budget, again.
We need to put the unemployment insurance fund on a long-term sustainable path.
We need much bigger and bolder education reform and steps to save our pension system.
And we need to enact the entire tool kit which will help us stem the growth of property taxes.
So have no doubt: we are not turning back- not on my watch.
But before I turn to the future, to the task ahead, I want to make two comments.
First, who would've thunk it?
If I, or the Senate President, or the Speaker, had told you a year ago that, by December, we would have a 2% hard cap on property taxes and a 2% hard cap on interest arbitration awards, you would have told us we were crazy.
Yet here we are...
With both caps in law.
People stood up for their principles on the one hand, but listened to the people who sent us here on the other.
This is the model for the way forward.
We must fight hard for what we believe in, but in the end, we must do the people's work.
My second comment is to say, to this Legislature, and to the public watching or listening today, "thank you."
We haven't always agreed, and we haven't always gotten exactly what we've wanted, but we have achieved compromise- and the people of New Jersey are better off as a result.