March 21, 2006

Drink? … Smoke? … Screwed!

Filed under: Uncategorized — Jim @ 9:59 pm

It’s no secret. The Garden State’s finances are in the toilet. The state is looking at a shortfall in the billions of dollars. The voters knew this going into the most recent election for governor. Nevertheless, as history will record, Jon Corzine won the race.

Today, Governor Corzine announced his proposed budget for Fiscal Year 2007.

Let me preface this by saying that I am not an economist, nor am I particularly facile with figures. However, I do speak English, I didn’t just fall off the turnip truck, and I manage to pay my bills every month. Therefore, I tend to believe that if you are in a financial hole, the way to get out of the hole is to be sure that the amount of your “outgo” is less than less than the amount of the “outgo” that got you into the hole in the first place. In English, that means that you have to spend less than you have been spending until you are out of the red ink.

Which makes if difficult to understand why this year’s budget calls for spending increases over last year’s in the amount of 9.2 per cent.

The Governor explained this increase as being largely the result of “already legislated, mandated, negotiated and inflated costs.” The budget also includes some proposed reductions in spending, however, as Ken Adams pointed out in big, red letters, only in the world of politics do reductions in anticipated increases in spending equal “cuts”.

Not surprisingly, Enlighten New Jersey has provided considerable detail much better than I could have, and I suggest you head over there and check it out. I do, however, have a couple observations.

The Governor proposes that the state’s sales tax be raised from six percent to seven per cent. The government (and the press) characterize this as a “one percent increase” in the sales tax. That’s very clever, but even a math-challenged guy like Yours Truly knows that it is not a one percent increase, but rather it is an almost seventeen percent increase in sales tax. (Math 101, folks – 1/6 = 16.66). If you still can’t see it, it means that if a purchase normally would have cost you $100 in sales tax, the same purchase, under the Governor’s plan, would cost $116.66 in sales tax.

The Governor’s plan also nails the politically easy targets — smokers and drinkers. The taxes on cigarettes, wine, booze and beer are to be increased. I have to wonder whether sufficient thought was given to the collective effect that an increased cigarette tax will have on: (a) people deciding that they can no longer afford to smoke (healthier Garden Staters, but less revenue for the state), (b) increased cigarette sales in nearby states such as Pennsylvania and Delaware (less revenue for the state), and (c) increased internet cigarette purchases (less revenue for the state). I’m just sayin’.

Oh, and before the teetotalers out there get all giddy, did I mention that the Governor’s plan will also tax tap water. Yes, I said tap water. Talk about a “dry state”!

Although the budget and the state’s finances are complicated (and beyond the scope of this post), a couple things about the proposed budget seem clear at this juncture:

Republicans, not surprisingly, hate it.

Many democrats (who have a stake in the status quo) also hate it.

And, if the Star Ledger Readers’ Forum is any indication of public opinion, the citizens of New Jersey really hate it.

The next few weeks ought to be quite something to watch as the rogues politicians and lobbyists savage one another to protect their respective interests. Of course, while they wrestle in the muck that is the Jersey Political Swamp, people and businesses will quietly go elsewhere.

In typical Jersey fashion, no one will notice until its too late.

Update: DynamoBuzz has more here, here and here.


  1. Here in Washington, we dont have an income tax, just a sales tax. it varies by county but ranges from 7.8% to 9.0%.

    Which isnt much above what you’ll be paying.

    Which is why we will NEVER pass an income tax in Washington state. Sure, they say they’ll reduce the sales tax down to 2 or 3 percent but it NEVER stays there. They always raise it when they need more money and then they pretend it’s still not as much as we were paying before.

    Politicians…they should all be dragged off and shot…

    Comment by mr. helpful — March 22, 2006 @ 12:48 am

  2. … right after the lawyers.

    Except the ones with great farookin’ hair.

    Comment by Ken Adams — March 22, 2006 @ 9:53 am

  3. I was reading about this in the WSJ op-ed section yesterday… sounds like the good gov (like all nice little mob-like communists) will be trying like mad to raise your taxes…. because capitalism is a crime. Heaven forbid you actually get to keep the money you work so hard to earn!

    From what I hear, the IL gov and Mayor Daley are doing the same thing to that state.

    Comment by Teresa — March 22, 2006 @ 2:04 pm

  4. As a former Chicagoan and current NJ resident, it is eerie how similar the two places are. The major difference that I can see is that winters are harder in Illinois. Oh, and Corzine is from Illinois. Coincidence?

    Comment by nesselrode5 — March 23, 2006 @ 1:38 pm

  5. Corzine is from Illinois? Oh, well he learned from the masters then *grin*.

    Comment by Teresa — March 23, 2006 @ 3:47 pm

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