Seven ideas for cleaning up New Jersey?s fiscal mess

Seven ideas for cleaning up New Jersey?s fiscal mess

By Seth Grossman, Political Columnist

(Reprinted from the June 30, 2010 Current-Gazette Newspapers of Atlantic and Cape May County,….scal-mess.html)

In 1966, some 44 years ago, most people in New Jersey complained that property taxes were too high. So our politicians “fixed” the problem by giving us a new 3 percent state sales tax.

This poured lots of state money into local public schools and governments, but most of it paid for big pay hikes and more government employees ? not property tax relief. The big winners were public employee unions, which now had more members, dues money, and political clout.

Two years later, those unions demanded and got the Public Employment Relations Commission (PERC) law of 1968. This new law, with later amendments, forced almost every public employee in the state to either join a union or pay big union dues anyway. And it gave state arbitrators and bureaucrats, not local elected representatives of the people, the power to set the salaries and benefits of public employees.

Before 1968, public employees got lower salaries and benefits than people doing the same jobs in private business. But they worked fewer hours, got more days off, Civil Service job security, and better pensions. After 1968, public employees got all those things plus much higher pay, pensions, and benefits to boot.

This caused another property tax ?crisis? in 1976. Our politicians again “fixed” things by giving us a new 2.5 percent state income tax. And to guarantee that this new state money really cut property taxes this time, they gave us a new law with “caps” that were supposed to limit future budget hikes to the inflation rate. No local tax hike could exceed the “cap” unless voters approved.

But local politicians quickly figured out how to get around the “cap.? Money from state and federal grants were exempt from the “cap,” so every town now lobbied for and got more grants.

In 1977 Atlantic City was more creative and sold its water department to the Atlantic City Municipal Utility Authority (ACMUA) which it had just created to beat the ?cap.? The city didn’t raise property taxes, but its ACMUA borrowed the $5 million purchase price and then jacked up every water bill in town to pay back the loan.

The end result of the ?cap? law, and countless gimmicks to avoid it, was that state and local government got even more complicated, confusing, and corrupt. Federal and state politicians expected and got paybacks from local officials who got the biggest grants. Citizens had no way to control waste and fraud. If they complained about any state or federal grant, the money would just go elsewhere and their town would get nothing.

Now, 34 years later, New Jersey has the highest property taxes in the country. But we also have some of the highest sales, income, business, cigarette, death, and real estate transfer taxes as well.

What can Republican Gov. Chris Christie do to fix this?

First he should forget quick-fix gimmicks like his proposed constitutional amendment with its 2.5 percent ?cap.? We’ve been there and done that. Instead, he should apply basic principles of American liberty, equality, and democracy to address the underlying causes. Here are some ideas:

1. Distribute all state income tax money equally to every town and school district based on population and number of students. This is the only way to get politics and corruption out of ?property tax relief.?

2. Change the 1968 Public Employment Relations and Civil Service laws so that public “servants” are no longer masters of the people we elect to represent us and no longer forced to join unions to keep their government jobs.

3. Post all public employee contracts and salaries on the Internet so every citizen can quickly see how our tax money is spent.

4. Allow non-union companies to again cut grass, paint walls, install lights and plumbing, etc. in public parks and buildings.

5. Give scholarships and reimbursements to parents who save money for taxpayers by sending their children to private schools that meet public school standards.

6. Get all elected officials and part-time elected officials out of the pension system. The state pension funds are broke, and there was never a constitutional vote to bail them out. Therefore, we can legally do this retroactively.

7. Keep the promises Republicans made in 1993 to adopt term limits, initiative and referendum, and recall laws with realistic signature requirements. Republicans broke those promises right after they won that election. Then they made existing recall laws more difficult by doubling the signature requirements.

Somers Point attorney Seth Grossman appears live on WVLT-92.1FM, heard throughout South Jersey 8-9 a.m. every Saturday. For information see, email or call (609) 927-7333. Breakfast discussions are held 9:30-10:30 a.m. every Saturday at the Athena Diner, 1515 New Road, Northfield.

  • Seth Grossman

    Seth Grossman is executive director of Liberty And Prosperity, which he co-founded in 2003. It promotes American liberty and limited constitutional government through weekly radio and in-person discussions, its website, email newsletters and various events. Seth Grossman is also a general practice lawyer.

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