Taxajersey

New Jersey Governor Jon S. Corzine delivered his annual State of the State address on January 9. While many items were on the agenda, fiscal issues remained the most pressing and included New Jersey’s highest in the nation property taxes and budgetary shortfalls. Perhaps some of those nasty highways, including the infamous Turnpike, could be sold off. His proposals may set examples for other states and have an impact at the federal level, where state policy has long been utilized as a proving ground for new experiments.

Property taxes, for all who have lived in New Jersey, evoke two main responses: Either that of a shudder due to their extreme cost, or a giggle from those either so wealthy or so strained as to revel in this symbol of government incompetence. Average rates in the state are about $6000 and rising approximately 7% per annum. Corzine had originally promised a 20% decrease in property taxes, but reneged early in his term. On January 9th he introduced some suggestions for the problem, including a direct credit of 20% of the property tax bill to households earning under $100,000 per year, 15% for $100,000 to $150,000 and 10% for $150,000 to $200,000. Unfortunately, this does little to address actual spending and budget shortfalls either in municipalities or in the state government. It’s a little like taking money out of the right pocket and putting it in the left, due to the numerous funding schemes and court decisions that require much of the property taxes to be redistributed from richer to poorer districts. My personal hope, and perhaps the intent of the governor, is that by shifting some of the property tax burden to the state in the form of a credit, he can curb state spending – all states except Vermont have Constitutional clauses requiring a balanced budget. The more likely outcome is, however, a further tax increase. Sales tax in NJ was raised by 1% this past summer to tie for the highest state sales tax in the nation at 7%, and the cigarette tax was also raised to America’s highest level at $2.57 per pack.

Corzine praised New Jersey’s new commitment to stem cell research. The first of a planned package of bills, the legislature and governor allocated $270 million primarily to construct new stem cell research sites. While superficially appearing to be a waste for a state hard pressed to stay in the black and unable to control spending, there is hope that this will make New Jersey the leader in stem cell research and create an economic mini-boom in biomedical research and development. President Bush’s determination to again veto stem cell bills coupled with the lack of sufficient votes to override in the House and Senate makes this even more likely.

Corzine also spoke of ‘monetizing’ state assets. The Turnpike (Route 95),Garden State Parkway (GSP), and Atlantic City Expressway (ACE) are all being considered for liquidization – at an estimated $10 billion. This is poor policy for two reasons: firstly, although Corzine promised not to use any revenue from the sales to make a “one-time budget fix to cover routine operating expenses,” it would still be a one-time injection of funds. Likewise, if the Turnpike, GSP and ACE are going to be bought by a private entity, that either means the new owner is getting more out of this than we are, or he’s going to raise tolls. Neither is appealing nor reasonable.

Those not in New Jersey may ask, how is all this important for my state? The answer is multifaceted. New Jersey has the most out of control taxes in at least three categories (property, sales and cigarette) while having the highest per capita income. This means that the structural problems are the worst, particularly for property taxes. Consequently, if anything does go as planned, there may be a model to replicate. If shifting tax burdens to the state to fall under the cap and at the same time quell tax increases because they are now being considered state wide, that’s progress. As for our highways, if selling them to private investors does anything other than create unreasonable toll hikes, I’ll vote Democrat in 2009.

If there’s one thing politically active students at Brown like, it’s grass-roots nitty-gritty popular politics (i.e. student activism). In New Jersey, that spirit is alive and well. A few years ago, the state banned the use of student activities fees for lobbying the state government. This legislation was affectionately referred to as “Kill PIRG,” as it struck a serious blow to the many liberal and progressive student initiatives based at state colleges.

I took some time to sit in on an organization meeting with representatives of Rutgers, Drew, TCNJ (The College of New Jersey), Stockton and Ramapo, all of whom were very dismayed by recent cuts in higher education funding. Their resumes were frequently similar – campus leaders for CAN (Campus Anti-War Network), SDS (Students for a Democratic Society), Tent State, an organization promoting higher education as a right for all and one or two members of the ACLU (American Civil Liberties Union). Their goal: find a way to form a “State-wide Student Organizing Committee,” perhaps a union, alliance or broad-based coalition.

While I find it hard to support most of their other positions, including some information passed out by one representative on providing higher education for ‘undocumented Americans’ (read: illegal aliens), I certainly admire their spirit. Unlike so many other student groups that engage in a lot of noise making and name calling, this bunch seemed to be prepared to really devote themselves to the long haul, to building a comprehensive and inclusive organization. After so many poorly executed initiatives, seeing such sensible activists is a breath of fresh air.