The More You Read, the Sicker You Get

If you have not already read this perspicacious piece, do so right now.

Then, contrast it with this boneheaded letter to the editor of The New York Times, demonstrating what it is that we’re up against: someone who actually believes it’s a Bad Thing that New Jersey’s taxes "lag behind" two other jurisdictions in the Country.

If one takes the figures from last year – about $28.2 billion in state taxes – and adds to that sum the approximately $20 billion we pay in property taxes, that works out to just about $5500 in taxes for every man, woman, and child in New Jersey. Corzine’s proposals will add another $200 to that figure, never mind what property taxes will do.

Hence, before a family of five even considers the costs of housing, clothing, food, heat, electricity – maybe even an occasional movie – it must cough up an astonishing $25,000 to the local tax eaters. And, of course, the feds want their piece, too, and, then, impose the execrable Alternative Minimum Tax on those of us foolish enough to have a mortgage and kids while living in this tax hell.

Because, by paying for our homes, and paying taxes that Corzine and Shure think are too low, the feds think we’re rich folks not paying our "fair share".

The ENTIRE New Jersey Congressional delegation should DEMAND that the next bill adopted by Congress be the repeal of the AMT – which might more appropriately be entitled the Anti-New Jersey Tax.

And the ENTIRE Legislature should demand a No Tax Increase, No Spending Increase budget.
Not one more nickel in borrowing, taxing or spending. Indeed, a five year freeze on ALL governmental spending, at all levels, and tax cuts to match. If Steven Lonegan can do it in Bogota, we can do it everywhere.

Only Nixon ...

Christie Whitman was a great one for worthwhile initiatives which, having received a day’s headlines, never saw the light again. She held a news conference on tax limitation measures, calling together the various legislative sponsors of same (crediting myself retrospectively with some degree of foresight, I didn’t think she was serious and, hence, didn’t attend). A $25 million initiative to encourage municipalities to merge went precisely nowhere.

Kean – father, not son – Florio, DiFrancesco, and McGreevey wanted for any vision whatsoever.
And Corzine’s campaign offered little hope for anything better. Cover the uninsured, increase the magnificently foolish property tax rebates, etc. Typical electoral blather.

‘Course, for each of them, it worked – electorally, anyway – lending much credence to the new motto of the PoliticsNJ website. For each of these men and woman, power itself mattered more than what they did with it afterward.

Comes now Hizonor, with Executive Order Nine, creating the Governor’s Commission on Governmental Efficiency and Reform. The Commission’s stated goal:

"... evaluate the budget, structure and organization of government in New Jersey, including State agencies, instrumentalities and independent authorities, local and county government and school districts, and advise the Governor on governmental restructuring, effectiveness, best practices, efficiencies, cost-saving measures, and how best to achieve economies of scale in the delivery of services and programs, at the lowest possible cost, consistent with mission and quality."

With such a modest agenda, how can this Commission possibly fail?

Consider the number of studies by commissions on governmental efficiency, property tax reform, restructuring, etc. – to the reports of which noone paid, or pays, the slightest attention – and wonder, why is Corzine even bothering? No Governor has ever been willing to assume the political risk associated with doing the things which need to be done to bring about governmental efficiencies. Politicians of all stripes recoil at the loss of employment opportunities which governmental restructuring would produce. The unions oppose any effort to rein in costs, if their members would potentially receive fewer benefits (and, in any just system, they would). Liberals object that cutting off subsidies would hurt urban areas (they’re right; financially, anyway, in the sense of no longer being able to live off of someone else’s paycheck). Conservatives rightly fear any report into which the NJEA has the slightest input.

But, being gullible, let’s assume, for the moment, that Corzine, although a stark, raving liberal all these years, actually believes in governmental reform, and wants a commission to offer REAL thoughts on reform, not just the politically correct pabulum of previous commissions. What might such a commission recommend?

First, for government to be efficient, it must be responsible. That means that the folks who spend the money must answer to the people who pay the bills. It simply will not do to create a system in which some governmental officials get to spend money on their own constituencies that they did not need to raise in taxes. Or, put another way, the voters who benefit from spending must be the same ones who pay the bills, such as there is NEVER an incentive to stick another community with the costs of one’s own benefits.

In practice, this requires drawing governmental lines, assigning responsibility to each, and then absolutely proscribing "pork" – that is, cross subsidies. The state is absolutely prohibited from underwriting costs in localities. NO municipal aid, no $$$ for municipal buildings or community centers. Municipalities do what they do, the state does what it does, and the two do not mix.

So, to use an obvious example, take schools. First, eliminate elected Boards of Education. Instead, the Governing Body of each municipality appoints a superintendent, who appoints principals, who hires teaches. NO ONE gets tenure. No one gets a pension (everyone gets a 401(k) option). No one receives health benefits (the costs of providing same would be calculated, everyone’s salary increased accordingly, and the benefits abolished, the employees left free to secure such plan as they see fit to purchase) And the Governing Body answers to the people for its tax and spend decisions.

And further consider: what possible excuse exists for Morristown to exist, separate and distinct from Morris Township and Morris Plains? Or why two Hanovers, two Boontons, two Chesters, two Mendhams, two Rockaways? And Victory Gardens? Please.

39 municipalities in Morris County? Try 10-15 (which is still probably too high). Indeed, consider abolishing counties outright; if there were but 10 municipalities in Morris County, what purpose would a county government serve? Create an incentive for municipalities to merge, going straight to the people, over the heads of recalitrent local officials. If the bribe is big enough, the people will respond, and the savings, in the future, should be large.

Give each of the new municipalities the REAL ability to chart their own futures, such as either abolishing the state income tax and permitting a local option. Or, if the state is concerned respecting the necessity for a more equitable distribution of school funds than would otherwise occur by municipality, accord each child an equal voucher, redeemable for an education (or refunded to parents for home schooled kids).

The reason government is so expensive now is that (a) there’s too much of it; (b) powerful special interests have an incentive to get it to vote them money at others’ expense. If we reduce the size and scope of government, make it directly answerable to the people it governs, many of the problems would – if not disappear – at least become manageable. People would stop writing to their state officials about property taxes, because the problem would rest with the Mayor. Pension and health benefits would cease to be an issue, since neither would be provided by the state (or localities), but would be bought by the employees themselves. Pork would be prohibited.

Now, any plan offered by such a commission which is not politically dead on arrival simply isn’t worth the paper it’s written on. If it doesn’t offend the NJEA, CWA, School Board Association, League of Municipalities, County Officials, etc., it’s obviously way too tepid.

Is Corzine serious? Perhaps. Conservatives, they say, are liberals mugged by reality. The only way to stop the inexorable growth of government spending is to ensure that the people doing the spending are the same folks paying the bills. Any incentive to vote oneself, one’s friends, or one’s constituency money must be wrung out of the system.

A Governor with vision could make this happen, provided (a) that he accepted the likelihood of being a one term governor, more unpopular even that McGreevey or Bush and (b) that he single mindedly pursues an aggressive agenda, likely against the folks in his own Party who (rightly) fear for their political lives. It means ruling by blue pencil, playing political hardball, keeping the Legislature in session, cutting unusual political deals.

All of which tends to militate against the thought that the Guv is really serious.

But, only Nixon could go to China....

Birthday Wishes for the Governor's Schools

It is – for the next five minutes or so, anyway – my birthday. So, as is the tradition among the Little People, I employ the anniversary of that event to bestow a gift. Of course, I bestow this gift upon our esteemed Governor.

While the national economic news looks increasingly good, New Jersey’s continues to look tepid, if not downright dreary. This can be explained in two simple words: taxes and spending. (If one wishes to add another, "regulation" comes in a close third). As I recollect, New Jersey taxes its people more than any other state, being particularly vicious when it comes to business and the "rich".

I spent the anniversary of my mother’s agony (and – liberal Democrat that she once was and sometimes still purports to be – subsequent consternation) bopping around Bucks County, PA, looking at sites for a relatively inexpensive relocation, when the time is right. Development there defies belief (apparently, PA residents don’t consider building homes for themselves to be a fundamental threat to the environment), and the prices match. Not long ago, one could purchase a substantial tract and construct a substantial house for a fraction of the price of New Jersey realty. Now, the prices often roughly compare. Significantly, PA residents – curiously unconcerned, apparently, about the quality of their drinking water – have refrained from any draconian Highlands-like building moratoria (see "regulation", above), so, likely, the high end homes which might once have been built in Hunterdon County will be built in Bucks. And the millionaires who might have moved here – despite our insane tax and spend policies – will move there instead.

For those folks who believe that ANY new construction represents little more than the continuing spread of the human pox across nature’s landscape, shooing people off to PA probably seems a good idea. But to rational folks, it should be a cause for great concern.

The Governor, over the course of the past few weeks – and even the past few days – has made some very encouraging noises. His apparent opposition to any income tax hikes displays a remarkable degree of Republican economic literacy (if, alas, betrayed elsewhere in the budget). That is, if one absolutely, positively MUST impose a tax, sales taxes are far preferable to income taxes. By definition, they don’t target one particular group and, hence, they don’t provide anyone (in particular) with either an incentive to vamoose or with no incentive whatsoever to restrain governmental spending. The best taxes – indeed, the only responsible taxes – are those which are flat and uniform. Time will tell if he can maintain some modicum of tax sanity against the envycrats who dominate his Party. (Up until a few weeks ago, he seemed a charter member of that wing. Battlefield conversion, perhaps.)

And his statement to our black robed masters – the Supreme Court – to the effect that we can’t afford more spending on the obscenely expensive Abbott districts, merits special note. Over the course of the past three years or so, something like $4 out of $5 in increased state school spending went exclusively to the Abbott district, as gross an injustice as it’s possible to imagine. Of course, the self-appointed advocates "for the children" oppose any effort to curtail spending – or even to insist that the district pay some portion of their own way. Their motto: ABBOTT DISTRICTS TO STATE TAXPAYERS: DROP DEAD.

It’s probably too much to expect of a Dem Governor that he write a brief note to the Court as follows:

Dear Members of an Equal, not Superior, Coordinate Branch of Government:

I have reviewed my copy of the State Constitution and seem to have missed the section which permits you to dictate spending on ANYTHING. Should you, in the future, see fit to opine on the subject, I will happily consider your views, as I do that of every other constituent, and shall, then, act in the manner I, and the Legislature, think most appropriate.
However, as, in my view, you lack the authority to compel the state to spend a single nickel, should you purport to Order us to do so, I will politely by firmly decline, and will, further, politely but firmly direct the Officers of the Executive Branch to ignore any enforcement Orders you might be inclined to issue. I might even suggest to the Legislature that Judicial Officers so profoundly ignorant of fundamental constitutional doctrines – such as separation of powers and that elected officials make spending decisions – might be encouraged to seek another line of work for which they are qualified.
If you wish to effect education or tax policy, you are invited to seek election to an office constitutionally entitled to make such policy.

Anyway, back to the point.

The Guv simply hasn’t imposed the kind of pain on the tax consuming class necessary to bring New Jersey back from the brink. To begin, spend not one nickel more this year than last (an already obscenely bloated state budget). Make your list of priorities, and act accordingly. And, next year, spend even less.

But, now, my gift of (even more) gratuitous advice:

Take $1.5 million otherwise allocated to Newark or Camden, and use the money to preserve the Governor’s Schools.

As I recollect, the administrative costs of the Governor’s schools seemed somewhat bloated, but these (relatively) inexpensive exercises provide challenging experiences for the Best and the Brightest students here in NJ. We spend a bloody fortune on the worst performing students – without, apparently, much in the way of appreciable results (about "vouchers", more in the future). We skimp on our brightest kids. That’s bass ackwards.

I don’t know whether parents pay some modest tuition for the Governor’s Schools; perhaps, if they don’t, they should be asked to do so, to contribute to the reduction of the budget mess. But it’s simply folly to slash one of the only programs which actually reaches out to the best students and brings them onto NJ college campuses at which, hopefully, some of them will choose to matriculate.

The Guv talks about making NJ a center for high tech, knowledge based industries (even if he picked a foolish vehicle and inappropriate means). Here’s a slam dunk opportunity to prove it.

Indeed, if he can’t find the money in the budget, he’s one of the few guys in the state with the private wherewithal to keep a magnificent program running. Instead of spending hundreds of thousands of dollars on campaign contributions to Democrats running for office, spend it here. In short, get one’s priorities straight. If he wants to spare the taxpayers this small burden, put his own money where his mouth is.

A Grim Fairy Tale

One upon a time, tucked in the valleys of mighty rivers and nestled against the shore of a great ocean, a group of prosperous, happy people lived together in a little society, know as Jonsylvania. Through their industry and thrift, they created one of the most beautiful, wealthiest communities in the land.

The people fancied themselves very cosmopolitan and, certainly, with their level of education and affluence, they had a right to be somewhat self-satisfied.

But even in a prosperous a society such as Jonsylvania, there were still pockets of poverty. Many of these folks were recent immigrants from foreign lands, not yet versed in the culture or the language. Often, though, they were people who, for one reason or another, made poor choices, such as abusing alcohol or drugs, having children out of wedlock, or failing to take advantage of the fabulously expensive education Jonsylvania offered.

Now, it came to pass that the people elected a new chief, F. Todd McJondey. The Chief felt passionately that a just society could not tolerate poverty in the midst of prosperity. It especially troubled him that so many children seemed to be living in poverty, despite the affluence of the land. So, he appointed a new Commissioner of Compassion, in the Division of Envy, Department of Confiscation, Jon Sertan, to rid the society of the bane of poverty.

Sertan was every bit as progressive as the new Chief. "If only we could increase the amount of money we spend on the poor," he thought, "they won’t be poor any more". So he embarked upon a great crusade to confiscate money from the good citizens of Jonsylvania to improve the lot of the poor.

Sertan noticed that even many folks who worked hard failed to make enough money to provide what he considered to be an adequate living for a wife and family. So, as his first decision as Commissioner of Compassion, he decreed that, henceforth, all workers would receive a living wage. This, he felt, would surely improve the lives of the working poor.

Jim Jonsson lived in the main town of Jonsylvania, Jonville. There, he operated a small store, catering to the needs of his fellow citizens. When he started the business, he worked hard – sometimes sixty to eighty hours a week – but, by dint of the sweat of his brow, the business prospered. Jim made a good living for his family, paid his (already uncomfortably high) taxes, and, as he got older, hired ten essentially unskilled employees (mostly immigrants, the young, and the relatively poor) to help him, giving him some leisure time to spend with his family, coach his son’s hockey team, and become something of a patron of the town.

Shortly after the election for Chief, Jim received a letter from the Commissioner of Compassion advising him that, come the first of the year, he must pay all of his employees more money. Some of his employees had been with him for some time, and he considered them his friends, so he was happy to pay them more money, figuring that all of his competition would be in precisely the same boat, and all would have to raise their prices, as he anticipated doing, passing along the cost of this new mandate to the customers.

After a few months, though, he began to notice a significant reduction in business. Encountering one former customer, Jim asked him why he no longer shopped at Jim’s store. "Well, Jim, it’s like this. I’d love to shop with you, but I’ve got a family of my own, and the prices across the river in Delavania are a lot lower than yours."

Jim got to thinking that, if this kept up, he’d lose all his customers. So he cut back his prices. But, now, his profits were squeezed, and he no longer had the money to help out around the town, or to provide for his family as he once did. When two of his employees announced that they were leaving, he decided not to replace them. Once again, he found himself working 60-80 hours a week, but, at least, now he had the money to pay his mortgage and the big tax increases the chief had imposed (despite his electoral promise).

But Compassion Commissioner Sertan felt more needed to be done to help working families. Wages – for those who still had jobs – were higher, it was true, but they still couldn’t afford to buy health insurance, the costs of which had skyrocketed in recent years, in part because government mandates that all coverage he expensive. So, as his second ukase, Sertan announced that, henceforth, every employee must be provided with health care coverage.

In his little shop, Jim was beside himself. Providing this coverage would cost him about 40% of his employees wages. In view of the competition from the shops in Delavania, he knew he couldn’t increase prices, so, when the mandate came down, he reluctantly fired half of his remaining eight employees. They couldn’t find new jobs and went on unemployment or welfare.

And, still, despite investing in labor saving machinery, such as self-scanners for his customers, business fell off. "We can get much better service across the river in Delavania, at the same prices," said his former customers. Indeed, the more expensive and more profitable the item, the more likely people were to travel across the river to purchase it.

One day, Jim bumped into an old neighbor of his, Del. They fell to reminiscing about old times and Jim observed that he hadn’t seen Del around much lately. "I moved to Delville, in Delavania two years ago," Del replied. "I got a gorgeous house on some land for a very competitive price. The property taxes are half what I paid in Jonville, and all of those taxes are spent locally, not shipped off to other districts, so our schools are great. They let me build on my property without delaying me for months with governmental approvals. The income tax is 1/3 what I was paying. They were HAPPY to get my business. And they didn’t have a litter of kittens when I wanted to own a gun!! Let me hook you up with my real estate agent..."

It pained Jim to think about leaving Jonsylvania. He’d been born and raised there. And he rather agreed with the Chief’s view the society needed to do a lot to make life better for the poor. But the more he thought about it, the more he realized, that he simply couldn’t compete here in Jonville anymore, and if he didn’t do something, he’d be among the poor needing society’s help.

So, he closed his store, picked up his family, and moved across the river. Once again, he could operate his business, hiring people who wanted to work at a wage he could afford to pay. To his surprise, he found that he already knew many of his neighbors, including a few men who used to run businesses near his in Jonville, and were now in business here.

None of his former employees could find work; no one in Jonsylvania was hiring the kind of unskilled help they could offer.

The day after Jim moved, Chief McJondey and Sertan met for their weekly conference. The economic news was grim. Unemployment was up; more people were uninsured; poverty seemed to be increasing. Surprisingly, despite the massive tax increases, revenues failed to meet expectations, especially on taxes directed at the more affluent and business. "It means," said Sertan, " that we must redouble our efforts. We must hire more governmental employees to meet the needs of the poor. And we must find new sources of revenue by increasing taxes on the rich and business, so that they pay their fair share."

But across the river, Jim no longer worried about that. Indeed, he had a brilliant idea, and began a business, developing land for homes and business in Delavania, marketing it to his former, upscale neighbors in Jonville. What began as a trickle of emigration became a flood; Jim’s businesses boomed.

And he lived happily ever after, surrounded by his family and friends, with only the slightest tinge of regret that he had been driven out of the not-so-happy-or-prosperous land across the river.