Rebate Baloney

I received my NJ FAIR application in the mail today. (Any governmental program with the word "Fair" in it almost certainly isn't.)

Now, I confess that rebates were, in part, a Republican idea. But it is the genius of the Democrats that when the Republicans concoct a really bad idea, the Democrats adopt it and make it exponentially worse.

Rebates exist less for valid policy reasons that for the fact that politicians love to be able to brag to their constituents about checks which – surprise – happen to arrive in the mailbox just before election day. Alright, let’s go further: there exist precisely no valid policy reasons to offer rebates.

Rebates are costly. This form did not get printed, handled or mailed for free. It will not be returned or processed for free. Assuming that checks actually issue, each one of them will cost money to print, mail, and process. Millions of dollars better spent on other things, wasted so that politicians can make a campaign pitch with public dollars.

When this matter came on for discussion, during my first term, I dissented from the Administration’s rebate proposal on the grounds that it – yet again – provided a windfall to the cities and shafted the suburbs. As the formula considered a home’s assessment rather than the quantum of taxes paid, a disproportionate share of the rebates went to people who live in relatively inexpensive housing. Camden residents received something like 90% of their school tax assessments back via rebates; Harding residents received something like 6%.

I suggested that if a 33% school tax offset was the goal, simply provide every homeowner with a refundable income tax credit for 33% of his/her school tax payments. EVERYONE would receive precisely the same percentage tax cut, and urban residents would no longer have their hands in suburban pockets.

‘Course, it suffered from the "defect" of not producing a check to the voters. I thought that an advantage; my colleagues disagreed.

Rebates, though, on the budget, look like spending. Hence, the Democrats were able to "reduce spending" this year through the simple expedient of a rebate cut. (Their "FAIR" promise – that the receipts of the mis-named "millionaires’ tax" would fund rebates – having been conveniently forgotten) Had my suggestions been accepted, the Dems would have been (further) revealed as the unambiguous tax-increasers they are (as if any doubt really remained after the mega-tax increases over the past four years).

Comes now, Jon Corzine. As I said, the Republicans never crafted an idea so bad that a Democrat couldn’t make it worse. Corzine proposes to increase rebates by making "specific spending cuts" (which he fails to specify). Curiously, he asserts that he will not increase other state taxes to increase rebates (where was he when we needed him last year? I don’t remember any broadsides condemning the Democrats for their massive tax increases and outrageous 17% spending increases. Perhaps I missed them.) But, then again, Florio and McGreevey both promised tax cuts before their elections...

Rebates, Corzine avers, are guaranteed to grow 10% per annum (just like the funds from the Democrats’ massive tax increases last year would fund increased rebates, right?) But, as we have seen, rebates are silly ideas. And given that most people in suburban districts are disproportionately shafted by rebates, while folks in urban areas unreasonably benefit, across the board increases merely freeze in the existing inequities.

Rebates should be abolished, not increased, and state taxes cut, dollar for dollar. Why take from one pocket to put it back in another?

The only real solution to outrageous property taxes lies in cutting spending and a fairer distribution of existing state aid.