Day of reckoning is on the horizon for budget

GREG BEAN

If you liked the lethiferous machinations our lawmakers employed to get a state budget passed in 2006 and 2007, I have a feeling you’ll absolutely love what’s gonna happen in 2008.

Those of you who have been paying attention know that in this state we’ve been looking at budget deficits of between $2.5 billion and $4.5 billion every year for the past several years. And we’ve seen our elected representatives do everything but condemn their own children to indentured servitude in order to postpone the day of reckoning.

Like a shopaholic who makes $1,000 in purchases every week on his or her credit card, but only pays the minimum payment every month, they keep hoping for some kind of miracle that will prevent the inevitable, that miserable day when the card is maxed out and a couple of leg breakers show up on the doorstep to collect. They keep praying that they’ll win the lottery (or find someone to pay a nice big lease fee for the Turnpike).

They dream they’ll find a bag of cash buried in the backyard (or raise the gas tax and a bunch of other taxes and fees that aren’t tied to income or property). They wistfully imagine they’ll bump into a leprechaun at the bottom of a rainbow and make off with his pot of gold (or convince residents to let them borrow a few more billion to tide things over).

Or maybe, the realists in the bunch are just betting they’ll be lucky enough to retire from office before the sky falls down and crushes them like doodlebugs on a windshield. That way, somebody else will have to deal with the problem and they won’t have to do anything unpleasant or unpopular, like actually cutting into the meat of the state budget.

That day of reckoning may be nearer than they realize, however. In fact, it could come as early as this year or next, since most reputable sources predict we’ll be looking at deficits of between $2.5 billion and $3.5 billion in both years, and the well is about tapped out.

Nearly everyone in state government agrees that taxes are about as high as they can go without precipitating an actual teatossing revolution. Last October, a statewide poll revealed that 49 percent of New Jersey residents said they are so fed up they would like to leave the state and move somewhere they can afford to live.

It was those disgruntled voters who turned down a ballot proposal in the November election to borrow $450 million for stem-cell research, an indication that not only are they up to the gullet with high taxes, they’re done borrowing to fund shortfalls and new programs.

They also turned down a proposal to reduce property taxes by increasing the sales tax, a denial that showed the folks in charge that we’re not such incredible idiots that we think raising taxes to reduce taxes makes sense.

This is very bad news for lawmakers and people like Gov. Jon Corzine, who don’t like to make waves and haven’t yet shown the will to do what really needs to be done.

Currently, the state’s debt load is about $32 billion, not counting the $100 billion or so we’ll need to cover pension fund shortfalls and retiree health-care costs – and that number, and our budget deficits, will only grow annually unless two things happen.

One, our lawmakers find their own backbones. Two, they use those backbones to stand up straight and do what those of us in the dreaded private sector are forced to do in years where our revenues fall short of expenses. In other words, it’s time to start trimming the number of state workers, and we’ll probably have to cut pensions and benefits into the bargain.

Personally, I think it’s interesting that during a period when this state has faced astronomical budget shortfalls every year for the past five years, the New Jersey Department of Personnel’s own figures show that the number of state workers increased 6.4 percent in just the two-year period between 2004 and 2006.

In 2004, according to the department, there were 79,298 workers on the state force. In 2005, there were 82,538 and in 2006, there were 84,401. That’s an increase of 5,103 workers on the payroll, and when you consider that the average annual salary of a state employee is $54,742, it’s a bump to the salary line of about $279,348,426 a year.

Are you beginning to understand why so many experts agree New Jersey’s budget problem is the worst in the nation? Can you see why they suggest it’s our own darned fault, and not a natural disaster like Hurricane Andrew or the Blizzard of ’49?

If you’re a manager in the private sector looking at a big deficit for the coming year and very limited revenues, do you respond by adding staff and expenses? Not unless you have a career death wish, you don’t. Managers get fired for stupidity like that.You respond by cutting expenses.And if that doesn’t work, you simply have to cut staff.

It’s time the public sector in New Jersey started acting like the private sector, like it’s a business (I thought former businessman Corzine would understand this simple concept, but apparently he’s forgotten).

Let’s take a look at what might happen if we reduce the number of state workers by 10 percent, which has been a fairly common reduction in private-sector work forces in the past few years.

In New Jersey, that would mean cutting about 8,440 jobs, and at that annual salary average of $54,742, it would mean savings of about $462,022,480, not counting benefits. Cut the number of state workers by 15 percent, and you’re looking at a savings of around $693,033,720, not counting benefits.

Couple that with reductions in pension and health benefits, and reasonable reductions in programs and services, and you’re beginning to talk real money.

Put that together with implementing some of the suggestions (like consolidating school districts and municipalities) made last year by that blue-ribbon panel on property tax reform, (none of which became law, or were ever seriously considered), and you’re starting to talk solution.

They won’t want to do that in Trenton, however, because it might cost them votes, and the state workers might picket the place again. But they might not have a choice, and that means we can look forward to a hell of a show come budget time, even better than “DancingWith the Stars.”

Gregory Bean is executive editor of

Greater Media Newspapers. You can reach

him at gbean@gmnews.com.