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Former Assemblyman Jack Ciattarelli. (Photo: Kevin Sanders for New Jersey Globe)

Ciattarelli: Governor Murphy is failing taxpayers

By Jack Ciattarelli, June 11 2020 11:14 am


It’s a lie.

Governor Phil Murphy is saying that New Jersey needs to borrow billions to avoid having to lay off 200,000 public workers at the local and state level. That’s false. He’s using fear in an attempt to win public support for his unconstitutional and reckless borrowing scheme to balance our state budget. A scheme, mind you, that will raise taxes and severely punish everyday New Jerseyans, as well as future generations.

We all support our police, firefighters and teachers, but Governor Murphy disingenuously threatening their jobs to get away with governmental ineptitude is wrong. Fact is, the Murphy Administration has been marked by patronage, incompetence and waste. Before the Governor raises one penny in taxes to pay for his borrowing, how about trimming the fat?

During the Great Recession, New Jersey faced budget gaps from steep drop-offs in income, sales and business taxes. In fact, a Republican Governor and a Democrat-controlled legislature closed an estimated $6 to $11 billion budget gap without borrowing or tax increases. That 2010 budget was $29 billion.

Governor Murphy’s 2020 budget was $39 billion; his 2021 proposed budget is more than $41 billion. That’s right. Governor Murphy’s proposed budget is $12+ billion higher than just 10 years ago. Is anyone’s life any better because of it? And why is it we closed a proportionally bigger gap in a state budget during the Great Recession, but Murphy says we can’t close this gap without borrowing up to $14 billion?

I’ll tell you why – the Governor refuses to make the hard decisions. Making New Jersey the only state in the nation to extend its fiscal year-end and then using fear to stir up support for a multi-billion-dollar borrowing scheme is the easy way out. Our state needs this Governor to step up and do the right and necessary thing: make the hard decisions to reduce spending that he should have made months ago. We need him to stop with the appalling appeasement of the special interests and start caring about the needs of the average taxpayer.

The budget gap between now and the new 2020 fiscal year-end is $2.7 billion. Governor Murphy’s failure to act decisively has led to this situation. If the Governor had furloughed all the state workers who were idle through the pandemic and deferred the 3rd and 4th quarter pension payments, he would be well on his way to balancing this year’s budget. Are those pleasant choices to make? No. But it’s what a leader would do. With the year-end extended to September 30th, there’s still time.

Some will say it is unconstitutional to defer pension payments. Those are the same people who ignore the clear legal precedent that it is unconstitutional to borrow funds to balance our state budget. Those are also the same people who rightly condemn Governor Whitman’s pension bond scheme, even though Governor Murphy’s scheme does the exact same thing – borrow to make pension payments.

As for next years’ budget, just as we closed the gap in 2010, we can do it again. Furloughs, downsizing, budget cuts, benefits reform, privatization and deferred pension payments are what we need. (Yes, we do have a long-term pension insolvency problem, but we do not have a short-term pension liquidity problem.)

I’ve made clear my intention to file a lawsuit to stop Governor Murphy’s borrowing scheme. If the Supreme Court rejects my lawsuit, then sales and property taxes can, and most probably will, be increased to pay back the bonds. Here’s where the Governor, yet again, talks out of both sides of his mouth. He says that property taxes will increase if his scheme isn’t approved, but then he proposes a law that says property tax surcharges can be used to pay back the bonds. It’s insulting to all of us, and that’s putting it mildly.

If the Governor was intellectually honest and truly fighting for taxpayers, he would, at the very least, write the proposed law to say that in no event will statewide property taxes be increased to pay back the bonds.

And let’s not forget, New Jersey’s debt was recently downgraded and remains on “watch” for future downgrades by bond rating firms. The Governor’s borrowing scheme will only move us closer to junk bond status, which would be devastating in myriad ways.

Previous New Jersey Supreme Court rulings make clear that certified revenues in our state budget cannot include bond proceeds. Bottom line, borrowing to balance our state budget is unconstitutional. And so, we need the state Supreme Court to not acquiesce to Governor Murphy’s disastrous plan with a “wink and a nod,” but to fulfill its obligation as an equal and independent branch of our government. Simply put, we need the state Supreme Court to uphold the law and protect taxpayers.

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