Tuesday, May 09, 2006

New Jersey: Hopeless?

The Home-Tribune, an excuse of a local New Jersey paper, had an editorial on Sunday lamenting the sorry state of the state's finances:

The bad news for the state last week got worse. At a hearing before legislators, the state treasurer said tax collections in the new year were running behind projections by as much as $500 million, which means a budget already criticized for increasing taxes and cutting spending may have to have more of both.

Note the only solution they can even concieve of is tax increases, which is part of what created this horrible situation to begin with. How bad is it?

The $500 million tax shortfall also was something of a clarion call, coming in the same week as a new study that showed the state was losing its economic strength. In the last decade, New Jersey has lost more high-tech jobs than any other state. A Brookings Institute report commissioned by New Jersey Future also found that the state was replacing those jobs with lower-skilled, lower-paying ones. The jobs leaving the state paid an average salary of $36,000 a year; the jobs being created here paid an average of less than $23,000. The anticipated shortfall therefore seemed somehow prophetic. In years past, even during recession, the state's tax revenues have often exceeded projections. Just last year, New Jersey bailed itself out of a gloomy budget season with much higher than anticipated tax receipts. Now seems the time to wonder whether those days have gone.

Two weeks ago, Rutgers University economists James Hughes and Joseph Seneca published an op-ed contending that New Jersey's taxes on businesses — hiked in order to pay for ever larger state budgets — were turning it into a state hostile to business. The men noted that the state's business tax climate was now ranked 49th in the nation by a Washington-based tax policy group.

This is the result of years of liberal policies, from McGreevy to Corzine (yea, he's only been in office for a few months, but he has only offered more of the same poisonous liberal medicine of increased taxes and fees on businesses and the middle class). All of these progressives are now starting to see the fruit of their labors - a state that is going bankrupt because it can no longer afford the social model that it has set up. Milking the rich and middle class is great fun, but when they have had enough and leave, who is going to pay for your failed philosophies? Local businesses? Er, no...see the line about losing high-tech jobs? How are you going to raise your revenues now that you have driven the best-paying companies out of town, to be replaced by low-rent jobs paying on average one-third less?

But the leftists writing at the Home-Tribune are locked in the same mental box that most so-called "progressives" are: there is no other option to economic distress other than continuing to raise taxes. Note the tenor of the two following sentences from the editorial:

The Legislature has yet to instill much confidence that it has grasped the seriousness of the situation. It already has signaled its unhappiness with the governor's tax hikes...

...the best news for the state by far has come from the governor's office, where the Corzine administration seems particularly committed to trying to right the ship

Bad: Fighting tax hikes, a policy that has brought New Jersey to its current state of disrepair
Good: More tax hikes!

Isn't someone who performs the same action over and over, hoping each time for a different result, displaying behavior that falls under the textbook definition of insanity?

What a great place for the New Jersey Government, and its local media, to find itself...

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