The Tonawanda News
North Tonawanda — For as often as the media uses outsized, hyperbolic phrases to describe routine functions of government, we have going on in New Jersey right now a true ideological clash.
New Yorkers should take notice.
There, newly elected Republican Gov. Chris Christie is addressing a budget deficit he says is approaching $11 billion.
Christie proposes to close that budget gap entirely by cutting spending.
How much spending is he cutting? Well to give you an idea, the entire state budget he’s proposed is $29.3 billion. That would put New Jersey’s deficit at more than one-third of its proposed overall spending.
Of course, in politics and government, there’s always the fine print and while property taxes aren’t going up on a state level, they’re certainly going to increase on the municipal one. Either way, we should keep an eye on our neighbors and see how this works out. In case you forgot, Albany’s worked itself into something of a budget jam, too.
Christie, who campaigned as a fiscally conservative every-man, has proposed a series of cuts that will impact every man, woman and child.
We’ll start with what he’s cut:
• $820 million in state aid for schools and municipalities.
• The jobs of 1,300 state employees.
• The earned-income tax credit, from 25 percent of the federal level to 20 percent.
• Medicaid spending, imposing a new $310 deductible for seniors.
• Medicaid prescription drug benefits, the copays for which will double in some cases.
That’s some painful stuff.
Add to that, Christie’s pledge — as yet unfulfilled — to pass statewide legislation capping local property tax levies.
If these state-level cuts are to mean anything, that’s a necessary step. All of the cuts to schools and cities will mean local taxes will increase, because the money to continue funding schools and cities has to come from somewhere. City councils and school boards will be faced with making draconian cuts in a single budget or increasing taxes. Probably both.
Of course, if you’re a taxpayer, you don’t much care which actual tax skyrockets, be it income or property — it all hurts.
Sour medicine, but when you’re facing a mountain of debt the size New Jersey is — and, for that matter, the size New York is — you have to take some drastic action.
Bravo for Christie facing that reality head-on.
But here’s where I get off the train.
While he’s making all of these cuts, he’s allowing a tax on people who make $400,000 or more to expire, costing the state $1 billion in revenue.
We’ve been through this before in the Reagan years and again under George W. Bush. We cut taxes on the rich, waiting for that money to trickle down to the rest of us. We got not so much as a drip.
Middle and lower class citizens in New Jersey are being asked to bear the brunt of the cuts in services because they’re the ones who rely most on government services.
Tough, but palatable — if those who are being hurt feel that the wealthy, too, are feeling the pain.
Wealthy towns and school districts that don’t rely much on state aid won’t be hurt much by the state cuts.
Poorer cities and school districts will see things go from bad to worse.
There are ways to mitigate this inevitable widening of the haves and have-nots.
Local property tax caps can be staggered so as to allow schools and cities to ease into the cuts through attrition and retirement incentives. The state could consider some short-term borrowing to ease its budget deficit and spread the cuts out over multiple budget cycles.
And, yes, we could ask the richest among us to pitch in their fair share.
If New York followed New Jersey’s example, it would be a start.
If we learned from it, that would be even better.
Eric DuVall is the managing editor of the Tonawanda News. His column appears Wednesdays and Sundays. Contact him at eric.duvall@tonawanda-news.com.
