New Jersey: A Viable Future or an Economic Wasteland?

By: Salvatore Pizzuro

On Tuesday, February 26, 2008, New Jersey Governor Jon Corzine will deliver a budget address that will call for cuts in the State budget that will include downsizing in vital services. This is the result of desperation in the effort to cure the State’s fiscal woes. It is apparent that the Governor has realized that his “Toll Hike Plan” will not fly, politically. In addition, realistic alternative plans have not been forthcoming. Without true teamwork in solving this dilemma, New Jersey will continue to struggle under the maze of uncontrollable debt.

In the past, I have suggested that Governor Corzine must serve a second term in order to make any fiscal plan truly effective. Nevertheless, the possibility exists that if an effective plan is not agreed upon by the State Legislature, the Governor will opt to not seek reelection. The result will be that the debt burden will be inherited by the next administration and future State Legislators. The portion of the annual budget that is reserved for debt service will continue to grow every year. Eventually, New Jersey will take on increased sales and income taxes, and local communities will see continued property tax hikes.

The impact that this scenario will have on New Jersey will be unprecedented. We already have the highest property taxes in the nation. The middle class exodus to other states will make it all but impossible for some communities to survive, as the tax base will become smaller and smaller. New Jersey, even with excellent resources at its disposal, will become the economic wasteland sandwiched between New York City and Philadelphia.

The Governor and the Legislature do not have ample time to seek a solution. Decisions must be made now. Some economists insist that we must raise State income and sales taxes now. Others claim that such a move will destroy an already shaky State economy. Increased gasoline taxes seem to be given more credence by lawmakers. However, there is the suggestion that additional gasoline taxes will be devastating for the tourist industry.

The latest economic forecasts suggest that a recession is inevitable. Should this happen, will the Xanadu project, scheduled to open within the next year, be economically viable, or an albatross that will falter after costing taxpayers millions of dollars? With an increased number of hospitals closing in New Jersey, will emergency medical services decline to a level where it would be more expedient to seek medical care in another state? Will further cuts in higher education make it so expensive to seek a higher education in New Jersey that one portion of our young people will forgo college and another portion will opt to be educated in other states?

New Jersey has reached a point where we cannot offer young adults the concept that staying in school and working hard will necessarily serve as a road to a better life. More importantly, time is passing all too quickly, and the opportunity to fix this problem may not continue to be within our grasp.

The time for a solution is now. State lawmakers must place their egos and political careers aside and do the right thing, now. We cannot sit back and wait, since there is no more time.

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