Commentary 28- Fran Wood on Jon Shure's "Investments"

From the New Jersey Star Ledger

A case for investing our way out of fiscal problems
Posted by Fran Wood May 07, 2008 6:21AM
Categories: Policy Watch
Question: What is the most reliable way to solve New Jersey's fiscal problems?

A. Cut waste, fraud and abuse.

B. Invest in programs that benefit the state.

No doubt you answered A. You've been hearing that mantra for years, after all, so it must be the right answer.

Who would choose B in any event? Investing means spending, doesn't it? What justification is there for spending in a state as deeply in debt as New Jersey? Isn't that how our problems began?

Actually, no, says Jon Shure, president of New Jersey Policy Perspective, an organization that researches and analyzes state issues from the progressive side.

Our really serious current problem began, he says, with "the repeal of a sales tax increase in the early 1990s, then cutting the in come tax."

To make up for the lost revenue, he said, the state used money ticketed for the pension fund and retiree health benefits. This launched a "shell game" in which new programs were created with money from existing programs, all topped off by "excessive borrowing ... to cover it all up."

The result: "New Jerseyans are looking down the barrel of a budget that cuts services and threatens the state's quality of life."

Gov. Jon Corzine, in his 2008 budget speech, acknowledged the problems, then presented his own diagnosis: "New Jersey is addicted to spending."

So Corzine's proposed budget cuts spending, sometimes dramatically, in areas like parks, hospitals, human services, agriculture, scholarships and so on.

The fate of that budget is still undecided. Shure, for one, hopes major parts of it don't pass.

"It takes New Jersey in the wrong direction," Shure says, down a road that will worsen, not solve, our problems. And the only way to avoid that course, he says, is to "change the discussion."

Enter his Better Choices Budget Campaign, launched last month and now on a statewide road trip with an upcoming stop near you. His goal, he says, is to ex plain the long-term impact of the actions we take today.

Cutting "vital services" may get the budget balanced by the due date, he says, but such cuts "will weaken our communities, continue the relentless increase in property taxes, undermine the future for our families and hurt our children, our seniors and our most vulnerable residents."

As it stands, he says, the proposed budget "will make it impossible to provide the good education, health care and basic services our families expect and deserve."

If we're not going to spend less money, of course, we will need to raise more money, which leads to, yes, the dreaded T-word.

Shure admits any plan that includes more tax money is, to say the least, a tough sell. But he stresses that any talk of taxes should not imply an unfair burden on those least able to pay. He's for a "broadly shared" revenue burden, he says, including "ending tax breaks and subsidies to corporations that still lay people off or leave New Jersey when some other place gives them a higher offer."

Moreover, says Shure, our own legislators need to be reminded that voters have not always reacted negatively to taxes.

"They forget Gov. Byrne got re- elected after he got the income tax passed," he says. "Gov. Kean got re-elected in a landslide after he raised the income tax. And Gov. Florio lost (his re-election bid after raising taxes) by only 1 percent of the vote."

"You have to break through the psychology in New Jersey," he says. "We have the highest percentage of millionaires of all 50 states, yet we drastically underfund our state."

That's where he's trying to shift people's focus.

"If the governor and legislators think the only voices in New Jersey are the ones saying 'cut,' we're here to tell them there are others saying 'invest.'"

Those others (all listed at www.betterchoicesfornj.org) include at least two dozen organizations that understand, says Shure, the devil's in the details of Cor zine's proposed budget.

Its cuts to municipal aid, he says, will result in higher property taxes.

Its cuts in higher education aid will result in higher tuition at state colleges and universities.

Its cuts in medical subsidies will lead to higher costs for medical services.

"You can't make shortsighted cuts and end up with a good future and better quality of life for New Jerseyans," says Shure. Investment is "a more honest and, in the long run, profitable way for the state to deal with its problems."

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My Commentary:

Posted by Zemack on 05/07/08 at 9:41PM
Mr. Shure wants to benefit "the state" by making "investments" in education and healthcare, in order to "provide [what] our families expect and deserve"...to be paid for, of course, by those very same "families" courtesy of the taxing power of the state.

This is the classic arrogance of the tax-and-spend mentality, dressed up in brand new "investment" garb, that has gotten New Jersey into the economic death spiral it is now in.

Rather than benefit the state by raising taxes and dependence on government, how about "investing" in actual human beings by simply getting the state out of their way.

Here are two proposals along those lines:

1. Institute full tax credits for education, equal to the amount paid by individuals in local school property taxes, as well as the portion of sales and income taxes dedicated to state "aid" to local school districts. Extend the credits to all taxpayers, so everyone can direct their education tax dollars according to their own judgement, whether to the education of a child, grandchild or other family member, or even to a scholarship fund for private schooling for gifted, poor, or special needs children lacking adequate tax credits, or back to the public schools.

This would liberate education from the suffocating government-run monopoly and lead to an explosion of private alternatives to the public schools.

2. Liberate the health insurance market by repealing all coercive state mandates, including benefit coverage, community rating, and guaranteed issue health insurance mandates. These government-imposed directives violate the rights of individuals and insurance companies by forbidding them from entering into voluntary contractual agreements to mutual advantage. In addition, these mandates are a magnet for special interests seeking to impose coverage for specific ailments or medical procedures that force people to pay for insurance services that they do not want and wouldn't otherwise buy. This is a prime reason for skyrocketing health insurance costs.

Another reason for exploding costs is the lack of competition. In this regard, anyone actually interested in better healthcare for New Jersey residents should support passage of Morris County assemblyman Jay Webber's New Jersey Healthcare Choice Act. This act would remove the legal restrictions on the purchase by state residents of health insurance policies available in other states, thus opening the New Jersey market to national competition.

Together, these proposals would dramatically lower the cost of health insurance while greatly expanding the available choices by restoring the rights of individual NJ residents and families to tailor policies according to their own needs, affordability, and judgements, rather than the arbitrary whims of Trenton politicians and busybody do-gooders.

Jon Shure and his "progressive" ilk would never go for these truly progressive ideas, of course. They instead dream of all of the "investments" they could make, and the "prestige" they can acquire, with other peoples' tax money. The idea of people "investing"...i.e., acting on their own judgement...with their own earnings horrifies the "progressives", who see only helpless, parasitical incompetents waiting for government to "provide" for them.

But the "progressives" have it wrong. The best investment that can be made in healthcare and education is to liberate those fields from state interference, recognizing the individual rights of New Jersey's residents to manage their own affairs.