Corzine's plan: Real reform or another gimmick?

Governor Corzine finally unveiled his fiscal restructuring plan during his State of the State address this week. It is a four point plan that he says is designed to change the culture of reckless spending in Trenton and it bring fiscal stability to our state government. You can read the address yourself at http://www.nj.gov/sos2008/speech.html.

I was shocked when I read the speech. There was a lot I liked about the plan. Here, I’ve written critically about Corzine and his asset monetization plan for months. I was amongst the first to call “monetization” what it is; a euphemism for borrowing. I’d published up funny and unflattering cartoons on my blog that made the Asbury Park Press’s illustration of Corzine as a snake oil salesman look complementary. I was so predisposed to hating this plan. Was this plan really a good thing for New Jersey or was Corzine that good a snake oil salesman that I was falling for his pitch?

Here are the four points of his plan:

One: Freeze overall state spending for the next fiscal year at its current level. I really like this idea! Cutting spending would be better, but a freeze is much better than the massive growth we’ve seen in recent years. Given that Corzine has already committed to increasing education spending by $500 million, freezing spending would have to mean that there are real cuts elsewhere in the budget. The governor says he’ll have to cut between $2 and $2.5 billion (what’s a half a billion among friends) from current spending in order to freeze spending. I don’t get the math, but cuts are good.

Two: “For future budgets, spending will not be allowed to exceed recurring revenue growth.” Corzine will propose legislation that will prohibit incremental spending levels from exceeding certified recurring revenues. That sounds good!

Three: “We will capture the value of our toll roads to pay down at least 50% of State debt and fund transportation improvements.” Couldn’t we capture Bid Laden first? Herein is the big problem. Corzine wants to borrow $40 billion dollars and increase tolls 500%, but not until after his next election. If we must raise tolls, and maybe we do, I rather see the state do that without borrowing the $40 billion. Corzine says that if we don’t do this, we’ll have to increase the income tax by 20%, the sales tax by 30% or reduce state spending by 15%. If those are the only options, I vote for reducing spending by 15%. Since Jim McGreevey became governor state spending has increased over 50% and the quality of life in New Jersey has declined. A 15% roll back doesn’t sound too bad.

Four: “Give voters the final say on new debt, just like the Constitution intended.” That sounds good, except for the caveat: Corzine wants voters to approve only debt that is not matched by revenues. I think the Constitution intended to give the voters final say over all debt. But affirming to give the voters’ our Constitutional power is a good thing.

Three out of four is pretty good. Let’s freeze state spending and control future governors and legislatures from spending and borrowing money they don’t know the source of. $40 billion in borrowing? That’s a terrible idea that is designed to expand government and reduce your personal freedom.