November 14, 2008
 | TRENTON SCRAMBLES TO SALVAGE ECONOMY |
To hear the talk in recent weeks from Governor Jon Corzine and the Democrats who have been in charge of Trenton for the past seven years, the sorry state of New Jersey’s economy was an unexpected phenomena that has blindsided policy makers.
Corzine and the Democrats cast a large part of the blame on the national economy and the policies of Washington, point to the current financial downturn on Wall Street that has resulted from the credit crisis, and say they are prepared to come to the rescue with a package of economic stimulus proposals and safety nets for the poorest of our residents.
Of course anyone who has been paying any attention to the actions taken by the Democrats in Trenton over the better part of the last decade knows this is all too simplistic — if not outright misleading.
According to the New Jersey Department of Labor the state lost 3,900 jobs last month, and has lost more than 20,000 jobs so far this year. Rutgers economist James Hughes testified at a recent Senate committee meeting that New Jersey may lose 67,300 private-sector jobs if the recession continues until March 2010 and a total of 246,300 jobs if it continues to February 2011.
New Jersey also may be facing the worst retail holiday shopping season in two decades and a potential $400 million shortfall in revenue for this year’s budget. The truth is, the economic crisis now facing the state of New Jersey was not created overnight and is not the result of just national economic factors.
While the mortgage and credit crisis that has affected financial institutions nationally is certainly a driving force behind this economic downturn, those who have controlled state government in New Jersey must shoulder a great deal of responsibility for our current predicament.
Seven years ago the Democrat leadership in Trenton embarked on an unprecedented spending spree with $11 billion in new government spending. To pay for this dramatic government expansion, these same leaders increased 102 taxes totaling more than $6 billion and more than doubled our state debt.
Making matters worse, at the same time government was hiking taxes and making New Jersey less and less affordable, they were imposing costly new regulations on our business community and dramatically increasing the cost of doing business in our state.
To say that our current economic problems are simply a result of the national economic climate is foolish. At the same Senate hearing where he discussed the bleak economic outlook for our state, Hughes testified that even before this current national economic downturn, New Jersey severely lagged behind the rest of the nation in job creation.
Hughes said that during the years between 2003 and 2007, while the national economy was expanding, New Jersey was only gaining 72,700 private-sector jobs – a number that should have been four times that amount based on how other states were faring. There can be no doubt this was connected with our state’s tax and regulatory climate.
The Rutgers Economic Advisory Service forecast released in January 2008 states that New Jersey’s economy will continue to perform worse than the rest of the nation through at least 2017.
So now, after years of higher taxes, more spending, more regulation and a hostile attitude toward the business community, Corzine and the Democrats claim to be coming to the rescue. Please excuse those of us who doubt that the same crew that created this current mess is prepared to save us from it.
Republicans in the Legislature have created their own blueprint for how to get our state out of its current economic quagmire. This includes both short-term and long-term solutions.
In the short-term we have proposed a sales tax holiday that would reduce the state sales tax from 7 percent to 3.5 percent during the upcoming holiday shopping season. Many businesses decide whether to stay open or shut their doors based on how well they perform at this time of year.
By cutting the sales tax we can boost consumer spending power giving a break to New Jersey taxpayers while also increasing sales for New Jersey businesses. Hopefully this will allow them to keep their doors open – and New Jersey workers employed.
For a more long-term approach, Republicans in the Legislature have proposed a “Common Sense Plan for an Affordable New Jersey” that calls for $1.32 billion in spending cuts, tax relief for middle class families, constitutional limitations of future spending and tax increases and a comprehensive economic development strategy.
The economic development component calls for expanding economic incentives to attract new, high paying jobs, establishing a preference program that guarantees a percentage of government contract work will be set aside just for New Jersey businesses, consolidating all job creation programs under the Economic Development Authority, and enacting regulatory reforms that reduce the time it takes to get approval for economic development projects.
This would be a whole new approach for Trenton. Given the negative impact the previous approach has had on our state, I think changing course sounds like a good idea.
Assemblyman Rudder represents the 8th Legislative District in Burlington County.
