(Published in Asbury Park Press of May 30, 2013)
Government in New Jersey is grossly overweight. It is crushing our economy with high taxes caused by too much spending and debt, high electric bills padded with hidden taxes, high insurance costs caused by frivolous fee-shifting lawsuits, and complicated and confusing laws and regulations that put almost everyone in violation of something — unless they “pay to play.”
My campaign slogan is “Enough!” Our government needs Lap-Band surgery to shrink it to a size we can manage.
First, I would cut 15 percent off the state budget by repudiating (refusing to pay) any state debt that was not approved by voters as required by Article 8, Section 2 of the N.J. Constitution.
In 2008, Gov. Jon Corzine tried to hock the Garden State Parkway and New Jersey Turnpike because he said state government could not afford to pay $5 billion per year (15 percent of the state budget) for what was then $117 billion of debt and unfunded obligations. Today, most estimates put that figure at more than $200 billion, and I have not heard Gov. Chris Christie talk at all about this problem, or give any official numbers.
In 2003, Steve Lonegan sued to stop state agencies such as the Economic Development Authority from borrowing money without voter approval as required by the state constitution. The state Supreme Court let the EDA and other state agencies do it, but only after putting clear language on the bonds warning investors that these bonds were not backed by the “full faith and credit” of the state, and that taxpayers had no legal obligation to repay this debt.
Taxpayers only approved roughly $4 billion of state debt — a very manageable figure. We can and should refuse to repay anything not approved by voters.
For example, we should stop using almost all of the 14.5-cent-per-gallon gasoline tax to pay off debt incurred without voter approval, while our roads and bridges are falling apart for lack of funding. Most of that debt paid for overpriced political projects that benefited long-gone politicians and their campaign contributors.
The same government officials who claim we have a “moral” obligation to pay these debts just praised the Revel Casino for using bankruptcy to wipe out more than $1 billion of its debt. They also say that if we refuse to pay this debt, Wall Street will stop giving loans to government in New Jersey.
But economics professor John J. Wallis of the University of Maryland makes a compelling case that New Jersey’s 1844 Constitution brought us out of the economic collapse known as the Panic of 1837 by making it almost impossible for our state government to borrow money — until the state Supreme Court created loopholes some 130 years later.
Second, I would also use our state constitution — and bankruptcy and insolvency laws — to make our state pension funds solvent again. Christie’s auditors admit that state pension funds can only pay 46 percent of what they promise — if they get an 8.2 percent return on their investments. But pension investments in Revel Casino bonds went bad, and the funds are lucky to get 2 percent per year.
My best guess until Christie releases honest figures is that state pension funds can now only pay roughly 33 cents on the dollar. The worst thing we can do is keep paying all current retirees their full pensions, so that all younger workers get almost nothing when the money runs out.
I would immediately put a cap of $50,000 per year on all pensions, and increase the retirement age to 65, until a thorough audit shows the funds can pay more. I would never bail out the pension funds with big tax hikes on young people who are already struggling with student loans, Obamacare premiums and low-pay jobs.
Next, I would get rid of all of the hidden green energy and societal benefits taxes that are killing business with some of the highest electric rates in the country.
And I would get rid of fee-shifting lawsuits that force public schools, businesses and government agencies to pay big settlements when difficult employees get their feelings hurt. (These cases settle because current law awards thousands of dollars of fees to lawyers who “win” just a few hundred dollars for their clients.)