The Gannett News Bureau reports that the Corzine administration plans to borrow $2.5 billion, over and above the toll road scheme, as a stop gap measure to build new schools.
Corzine's plan to borrow the $2.5 billion will strive to be repaid through existing taxes, meaning it wouldn't have to be put before the voters.
“All political power is inherent in the people. Government is instituted for the protection, security, and benefit of the people, and they have the right at all times to alter or reform the same, whenever the public good may require it.” ~ New Jersey State Constitution, Article I, 2a.
The Legacy of Thomas Lifson
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If you look at Corzine’s asset monetization presentation, he had already included borrowing $1billion per year for SCC as part of his financial restructuring plan.
(http://www.nj.gov/sos2008/background.pdf)
Look at page four in the Gov.’s presentation, the one with the title – “New Jersey Has Significant Long Term Obligations Which Result in Large Annual Budget Requirements.” At the bottom of the page there are 3 footnotes. Footnote #2 pertains to debt service in 2010 and reads – “Assuming $1.1 bn/year for TTFA, $1.0 bn/year for SCC, $200mm GO FY08 and $100mm Building Authority FY08”.
I know I’m swimming against the tide by supporting the toll road monetization idea, but I think with some changes to the plan and other concessions by Democrats on state spending, school funding, etc, Corzine’s concept is the best option we have.
Corzine is trying to sell his plan as some sort of debt reduction plan, which of course is ridiculous. You obviously don’t solve a debt problem by taking on even more debt. He’s actually trying to solve a cash flow problem caused by something he’s unwilling to explain – the skyrocketing cost of employee benefits.
Because Corzine’s not willing to level with people, he’s not getting any support for his monetization concept.
Corzine is trying to sell his plan as some sort of debt reduction plan, which of course is ridiculous. You obviously don’t solve a debt problem by taking on even more debt. He’s actually trying to solve a cash flow problem caused by something he’s unwilling to explain – the skyrocketing cost of employee benefits.
Because Corzine’s not willing to level with people, he’s not getting any support for his monetization concept.
Enlighten,
As usual, your analysis in on the mark. The problem state with the state is employee benefits.
However, Corzine's plan will do reck the New Jersey economy and way of life.
The answer is to reduce the state payroll and renegotiate the union contracts. If the unions won't renegotiate, then the number of employees must be further reduced.
"The answer is to reduce the state payroll and renegotiate the union contracts. If the unions won't renegotiate, then the number of employees must be further reduced."
Of course, I agree and have been saying that for years. That’s what we need to do to solve problems going forward. However, the cost for retired employee benefits are going up 18+ percent, per year and the pension obligations incurred to-date still need to be met. We do need investment in infrastructure and if not for the huge weight of public employees around our necks, there’d be no problem.
I think Republicans better start figuring out how Corzine’s plan should be modified in conjunction with other state spending issues so that taxpayers don’t end up with the short end of the stick all the way around.
If not Corzine’s asset monetization concept, then I’d like to see another plan that solves the problem without large tax increases on the usual suspects. I’d rather a broader-based tax increase, tied to actual use of government services, predicable and spread out over many years, then the alternatives Democrats will impose. That’s what the toll increases would be and that’s why the “tax the other guy” Democrats are squawking over Corzine’s plan.
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