Tuesday, February 16, 2010

Christie's Choices

Governor Chris Christie has a thankless and difficult job, as do the other 49 state governors. Because of the Bush near-Depression, the country’s economy is in the tank, and more of the burden of essential services is being placed on the states.

There are difficult choices to be made, but the character of the Governor will be measured by the approach he takes. Looking at it simplistically, there are two factors that need to change – expenditures and revenue.

To date, Christie has suboptimized the solution by only considering the expenditure side. There is no doubt that draconian cuts are necessary – the question is where those cuts should be made. Cuts that simply transfer the fiscal burden to municipalities or property owners are not cuts at all, but simply a Titanic deck chair rearrangement. More importantly, expenditure reductions that place the burden on the most vulnerable New Jerseyans are foolish, immoral, and in the long run more expensive. A good example is his proposed cut on charity care for hospitals. Like those of his Republican colleagues in Congress, his actions will result in more people dying from lack of adequate health care in the United States.

Let’s be honest – to get out of this situation, we need to address the revenue side of the equation also. You can call them taxes, fees, or whatever, but in order to maintain essential government services, revenues must increase. Yes, we should aggressively cut waste from programs, but I’ll bet many of those programs are running on a bare-bones budget even today.

Those on the left who rail at the Governor’s policies without suggesting alternatives are not adding value to the debate. Instead, they should work to implement both cuts and revenue enhancement that do not place an undue burden on those citizens who can least afford them.

First, New Jersey should proactively promote consolidation of the various municipal authorities, local governments, and school districts. Economies of scale will eliminate unnecessary administrative overhead while improving the overall quality of our government services. Home rule is a luxury that we can no longer afford. By consolidating and implementing lean/six-sigma practices, our agencies can provide higher quality services at lower cost.

Second, New Jersey should increase the gasoline tax. Right now, we have one of the lowest taxes in the Northeast. The increase in revenue should be used to subsidize mass transit, which is more efficient than personal automobiles – and more available for the less-advantaged citizens. Also, to reduce the burden of this new tax, part of this enhanced revenue should go to an income tax rebate for licensed drivers with incomes below a certain threshold.

The character of the Governor and the health of the State will be measured by his actions moving forward.

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