Why New Jersey's Broke (Part 2)

Usually when a state is on the brink of shutting down, the main players will emerge at the 11th hour from a smokeless room to ...
by | July 7, 2006

Newjersey_1 Usually when a state is on the brink of shutting down, the main players will emerge at the 11th hour from a smokeless room to announce a deal and hold a press conference praising each other, despite their differences, for all their hard work in coming up with an arrangement everyone can live with. That wasn't the case in New Jersey.

Instead, it's been the opposite scenario. The press conference took three days to happen because they couldn't come to agreement, and positions actually appeared to harden as deadlines came and went.

It would be surprising in any case, but New Jersey is a state where one party -- the Democrats -- hold both the governorship and the legislature. A deal was finally cut yesterday, but to find out why it took members of the same team to so long to play nice, I called David Rebovich, a well-connected political scientist at Rider University in Lawrenceville.

For one thing, Rebovich said, the public heard all the talk about budget deficits and figured the folks in Trenton were just crying wolf. They've heard this so many times before and the politicians have always figured out some kind of way to paper over the problem in the end.

But Governor Jon Corzine insisted that the state get its fiscal house in order, quoting his father as saying "Once you're in a hole, stop digging." (Bet you didn't know it was Old Man Corzine who came up with that phrase; no wonder the governor is so rich.)

Corzine wanted to raise taxes, which Democratic legislators, badly burned by a 1990 tax increase, wanted no part of.

Since returning to power after a period in the wilderness, the composition of the Democratic legislative caucus has changed. More members represent suburban districts, Rebovich says, and are wary of having to defend state spending programs that they feel largely benefit the urban north. "The insurgent Democrats are led by South Jerseyans," he said on Wednesday. "They feel they have never received as much from the state government."

The suburbanites especially didn't like the idea of having to explain a sales tax hike at the same time their constituents are receiving annual property tax increases averaging 7 percent a year, because Trenton has frozen its payments to local school districts now for five years running. That's why legislators have insisted all along on devoting most if not all of the sales tax hike to property tax relief.