Back in another lifetime, when I lived in the socialist State of New Jersey, I was one of the founders of a website called “Conservative New Jersey.” I will reprint a series of articles we did on Christie, hoping it will convince the good people of the Free Republic of South Carolina to say NO to him.
Here is Part 1 of the series we published about the New Jersey Beluga Whale and the myth of conservatism that surrounded him. I apologize if most of the links are now broken. With time, everything changes.
Myth #1: Chris Christie opposes the re-distribution of wealth in New Jersey and balanced the budget without gimmicks or tax increases.
Here are the facts: a truly conservative Republican staunchly opposes any and every policy that redistributes wealth from those who create it to those who do not. While there are many redistributive policies that, practically speaking, can only be dismantled with great difficulty over a great length of time, some can be addressed with dispatch – Abbott Districts and COAH are two that come immediately to mind – especially if the Republican Governor in question has the power of a line item veto, which is precisely the case in New Jersey.
It is true that within minutes of taking office, Gov. Christie vetoed a proposed tax increase on household incomes of one million dollars or more. However, during the Republican primary in 2009, Mr. Christie attacked his opponent’s 2.9% flat tax proposal and condemned it as a tax increase on the lowest income earners – as if the redistribution of wealth by means of a progressive income tax was a vested property right that conservatives should defend. Disingenuous at best and flat out false at worst, Mr. Christie’s assault on the Lonegan Flat Tax proposal had the practical effect of defending the status quo of progressive taxation. His veto of the millionaire’s tax was less one of principle than of pragmatism: he did not want to lose tax revenues that might otherwise vanish if those who paid them moved out of the state.
While it is true that during his campaign Mr. Christie promised that he would “cut taxes across the board,” he has yet to submit a proposal to do so – despite the fact that such a move would have the effect of jump-starting the New Jersey economy and would enjoy broad popular support.
The Bogus Budget
Of all the claims to conservative fame made by Mr. Christie, perhaps the most disingenuous involves the budget he unveiled earlier this year which he claims closed a deficit of over $2 billion last year and $11 billion this year without resorting to tricks or fiscal smoke-and-mirror gimmicks.
But that is precisely what Mr. Christie has done and it was accomplished first by bullying the most conservative members of his party in the state legislature (Michael Doherty, Allison McHose and Michael Patrick Carroll – all of whom refused to support his budget for reasons outlined below) into voting in favor of it by threatening to give even more concessions to the Democrats. They caved and the budget passed with unanimous Republican support. As it turns out, Mr. Christie cut the budget the same way Republicans have pretended to do so in the past – by using the Democrats’ wish list as the baseline for spending and then simply reducing the rate of increase in spending.
According to research conducted by Americans for Prosperity the amount of state government spending actually RISES by 6% (including a 10% increase in executive branch spending over Democrat Governor Jon Corzine’s budget for the prior year). Not a single department is closed or one government employee laid off. In fact, the amount of money spent by the Governor’s office on salaries ROSE by $440,000 and the number of staff making more than $100,000 per year INCREASED by ten.
The $2.56 billion dollar “savings” everyone is crowing about was accomplished in part by imposing additional spending mandates on municipalities and local school boards while eliminating $420 million in municipal aid and over $800 million in school aid – much of it consisting of surpluses accrued by school districts that did a better job of managing their budgets. In effect, the Governor “raided” these funds, leaving districts in wealthier communities with little or no operating revenue.
It was also accomplished by eliminating $1.3 billion in property tax refunds. Gov. Christie took revenue that, by law, is supposed to be dedicated to property tax relief and used the funds to GROW government and expand entitlements.
The Governor’s budget calls for $613 million to be sent to pre-Ks in New Jersey’s Abbott “special needs” districts (despite the fact that the state constitution does not authorize funding for pre-schools); the food stamp program will be expanded from 135% to 185% of the federal poverty level; $110 million is appropriated for a new public option health insurance program called New Jersey FamilyCare (a program even more aggressively socialist than Obamacare); there is a $79 million increase for the “Healthcare Subsidy Fund,” essentially free health care for those ineligible for government and non-government sponsored programs – i.e., illegal aliens.
Recently Gov. Christie was a guest on Meet The Press and explained to host David Gregory that “In New Jersey what we did was we cut spending in every department, a 9 percent cut in real spending...”
In light of the foregoing, we can assure the reader that the Governor’s claim is a flat out lie.
Smoke and Mirrors
Now for the gimmicks: $70 million will be secured from the sale of carbon credits in the Regional Greenhouse Gas Initiative (ReGGI) – a Cap & Trade program identical to the one passed by the House of Representatives last year (see Part 4); $3 billion in pension payments that were supposed to be made by the end of the fiscal year in June were delayed a couple of weeks, pushing the debt into the next fiscal year – an accounting trick employed previously by Democrat Governors Jim McGreevey and Jon Corzine.
Mr. Christie also canceled the Homestead Rebate, a program that returned a small portion (in most cases a few hundred dollars or less) of the property taxes paid by homeowners back to them in the form of a check – usually mailed out just before the November elections. The rebate itself was a gimmick first employed by the Byrne administration over 30 years ago to buy needed votes just before the election.
Gov. Christie was right to eliminate it. However, his action was both cynical and hypocritical: during the 2009 Republican primary his opponent, Steve Lonegan, properly labeled the Homestead Rebate check as a scam calculated to garner votes – and he promised to eliminate it. Lonegan was attacked by Mr. Christie, who gained cheap political mileage by promising voters that he would keep the rebate in place, even though he knew fully well he’d have to eliminate it if he got elected.
Another gimmick is the 2% property tax cap. Starting next year, municipalities throughout the Garden State will be prohibited by law from raising property tax rates more than 2% annually. Any increase above that amount must be approved by the voters in a referendum. Superficially it has the appearance of a solid, conservative policy: capping outrageously spiraling property taxes is a good thing, right?
Not in New Jersey.
For one thing, there is nothing to prevent a 2% increase EVERY YEAR. In ten years, a $6,000 property tax bill could increase by over $1,300. For another, the law is riddled with exceptions like holes in Emmentaler cheese. Pensions, health benefits and a number of other costs – all of which are primarily responsible for higher taxes in the first place – are exempt from the cap, which means that homeowners could still get hit with a 6% tax hike under an ostensibly hard 2% cap.
Yet another problem involves the requirement of a referendum whenever the cap is exceeded – a requirement that’s been law since 1976. As any New Jerseyan with a clue can tell you, these plebiscites are almost never held because elected officials always manage to find ways to circumvent the process and avoid putting any proposed increase up for a vote.
Worst of all, 60% of income tax receipts (which by law must be dedicated to relieving the property tax burden imposed by school funding mandates) will continue to be given to just 31 out of nearly 600 school districts and these 31 low-income Abbott districts contain only 20% of the public school student population with an average expenditure as high as $18,000 per pupil.
Most of the non-Abbott districts receive considerably less (Mr. Christie’s hometown of Mendham gets about $2.32 per pupil – that is not a typo…it really is $2.32) and 58 communities receive no money at all. Many school districts are starved for funding and have no choice but to make up the shortfall through higher property tax rates – most will be forced to cut back severely on essential government services wherever possible.
The only result that can come from state mandates on local spending coupled with state restrictions on local taxing authority is the chaos now unfolding in California, where public sector unions crowd out spending on essential services until the system collapses due to the imbalances between mandated spending and limited taxation.
The 2% property tax cap effectively freezes in perpetuity the re-distribution scheme put into place by the Supreme Court in the Abbott decisions. In the event an Abbott district needs more money to meet its constitutional mandate to provide a “thorough and efficient” education and Trenton prohibits the school district from raising its own taxes in order to pay for that spending, then the only place to get that money is through wealth transfers from the State House (say hello to higher income, sales and other taxes).
If Mr. Christie were a serious and committed conservative, he would have declared political war on the Abbott decision itself as an unconstitutional encroachment by an activist Supreme Court on the authority of the legislative and executive branches. Alas, no such declaration has been made and none appears to be forthcoming.
Instead of obliterating the Abbot districts, Mr. Christie chose to feed the beast by channeling another Christie – in this case, Christie Todd Whitman – and doing what he expressly promised on the campaign trail that he would never do: incur debt without voter approval.
Paul Mulshine explains:
I want you to read the column I wrote in December of 2000 about the prior governor named Christie. Note how as a candidate Gov. Whitman promised she would never borrow without voter approval.
Now consider that this governor named Christie made the exact same promise. Yet he’s already borrowed $750 million without voter approval, and for the exact same purpose – to build schools in areas controlled almost entirely by the urban Democratic machines.
Worse, this Gov. Christie intends to borrow close to $4 billion more – all without voter approval – to complete the work of the prior governor named Christie.
The Tax Man Cometh
A close analysis of the Governor’s budget reveals close to $250 million in new taxes and fees – none of them major and almost all of them hidden from plain sight, making them even more insidious since most folks shrug them off as part of the rising cost of living in the Garden State.
There’s a new tax on insurance premiums, a new tax on health care, a new tax on new businesses, and finally, a tax on consumers that will confiscate more than 28 million dollars of gift cards purchased in New Jersey. That’s right. If you do not use a gift card to your favorite restaurant after one year, the State will confiscate the money!
You can read about these tax bills yourself right on the State Legislative website:
S2096 — Concerns certain taxes and assessments dedicated to the administrative costs of the DOBI.
S2112 — Adjusts time periods for presumptions of abandonment, limits issuer imposed dormancy fees, and provides for related administration for certain unclaimed property.
S2143 — Removes cap on .53% hospital total operating revenue assessment and raises cap on ambulatory care facility gross receipts assessment to increase charity care subsidy monies.
S2088 — Increases and establishes certain business filing fees.
However, there is a more open tax that has already hit New Jersey homeowners squarely in head like a well aimed baseball bat: as we observed earlier, the 2% property tax cap goes into effect NEXT year. The severe cuts to property tax relief made earlier this year to better fund the Abbott districts are already cascading their way through the system and into homeowners’ wallets. Many have seen their property taxes increase between 10% and 25% over last year’s rates with the result that ever-increasing numbers of homeowners are placing their homes for sale on the market or simply abandoning them to foreclosure.
Uncle Sam’s Teat
A conservative would properly shun any federal stimulus or bailout funds and during his gubernatorial campaign Mr. Christie promised “I will rely only on recurring revenue to balance our state budget, not one-shot gimmicks like federal stimulus aid or other revenue unlikely to recur in the future.”
But that was then…this is now:
Christie’s budget relied on about $270 million in one-shot revenue sources that may not recur next year, according to non-partisan budget analysts with the Office of Legislative Services. The budget also includes about $1 billion in federal stimulus funds.
Aside from the fact that this money will not be available for next year’s budget is the even more egregious fact that it was picked from the pockets of future generations in other states.
There is also the matter of the contest between the individual states to vie for $400 million in federal assistance for the public school system courtesy of the Race to the Top Fund, a grant program with a Faustian price tag: any state ultimately awarded grant funds would be prohibited from cutting its education budget in the following year. Had New Jersey received the grant, it would have put us – the taxpayers – on the hook for $400 million in the next fiscal year. Thankfully, an error was committed in the application process and the Garden State was denied the grant. We’ll explore the fallout of the Race to the Top debacle in Part 3.
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In Part 2 we will examine the myth that Gov. Christie took on and defeated the public employee labor unions and that his reforms have reduced the size of state government.