A Comprehensive Strategy

BY LINDA STAMATO

As Gov. Jon S. Corzine sells his plan for restructuring the state's finances, he has invited alternative ideas. As a citizen advocate of sound public policy, I offer mine.

The state needs to find a way back to fiscal sanity -- no question about that. The plan that is put into place must demonstrate unequivocally that state government will end its excesses and construct ways to prevent its members from acting irresponsibly -- so that if we can dig our way out of this $32 billion pit, we won't be put back in there again by short-sighted actions of our executive and legislative branches.

I don't buy the governor's "either/or" framework for fiscal salvation. We don't either need to increase the income tax by 20 percent or the sales tax by 30 percent or the gas tax by 12 cents or live with the governor's plan. A combination of approaches makes more sense: taxes, a freeze on spending and reductions in costs to accompany reasonable increases in tolls. An income-tax increase should not be summarily dismissed, certainly if equity is a consideration, and equity must be considered. An increase in the gas tax also makes sense in order to address transportation-related needs, including public transit, and, not least, encouraging fuel efficiencies and a reduction in carbon emissions. (To be sure, Gov. Corzine's own ambitious goals for reducing greenhouse gas emissions ought to figure in the picture.) And the property-tax rebate program, moreover, which takes more than $2 billion from the state treasury, involves too significant a sum not to be considered.

Any plan will require sacrifice. It must be broad and deep, equitable, and sound in terms of policy and planning. And, as wild as it may seem, I think if we accept the fact that we need to deal aggressively with this challenge to the state's future solvency and, indeed, its survival as an attractive state in which to live and work, then why not try to alter the cost side of the ledger, say, the pension arrangements and other benefits currently given to public employees? If we cannot afford them, we ought to reduce the burden those benefits place on our citizens. To put it simply, why not renegotiate the terms? Why not at least try to equalize the burden of paying what we owe by reducing both the debt and the costs that contribute to it? Why not ask public employees as well as private workers (commuters) -- all citizens -- to do their part? After all, in one way or another, we benefited from the programs that created the state's debt.

As for the roadway toll increases and the use of tolls to finance debt reduction and transportation projects, why the need to create a public benefit corporation? Why not simply raise tolls and sell more bonds to pay down some of the debt and, at the same time, replenish the Transportation Trust Fund? In a combination approach less bonding is necessary. Higher tax revenues from gasoline, too, could augment these sums.

We need a mix of tax and toll increases along with reduced costs for pensions and benefits to constitute what the citizens of the state (and those who travel through it) will contribute. A mix will meet objections that will be raised, legitimately, by those who see the plan under consideration as regressive, falling disproportionately on those who use the toll roads.

What about the other side of the equation? What must be promised to gain the people's support to restructure our state's finances? If, by legislative act, we need to strengthen the constitution's debt limitation clause requiring voter approval for the issuance of bonds backed by the state, let's do it forthwith. Citizens have the right and the responsibility to make this decision.

While we may not save a lot by cutting out corruption and reducing waste, we ought to do it nonetheless -- plan or no plan. End abuses of pension benefits by elected and appointed officials such as dual-office holding; adding members to tax boards whose responsibilities have declined, not increased; appointing officials to lucrative state positions in order to gain their votes on legislation. Stop the practice of adding "Christmas Tree" items to the state budget by individual lawmakers outside established public processes, end payroll-padding, "pay-to-play," and all acts that satisfy special interests and violate the public trust.

We know what we have to do.

If there is no genuine effort to substantially improve the way government functions, to demonstrate courage and conviction, and to genuinely serve in the broad public interest, then no effort to establish fiscal stability will "sell."

This is not an argument to reject the governor's plan; it is an attempt to take it seriously, to modify and broaden it, to equalize its impact, and to reduce some of the costs that burden the state treasury. The future of our state depends upon us putting our fiscal house in order, but the solution needs to be more equitable and comprehensive than the one Mr. Corzine has presented.

The governor's plan starts the necessary dialogue. He is right to warn against delay, empty rhetoric, political posturing and excess partisanship. We need to move as swiftly as we can to get on the path toward financial solvency, sanity and sound governance.

Linda Stamato is co-director of the Center for Negotiation and Conflict Resolution at Rutgers University.