Lower Taxes and Stronger Economic Growth Must Top List of 2007 Priorities

By Assembly Republican Leader Alex DeCroce

As we head into 2007 the Legislature has a variety of important issues to tackle including the need to enact tough ethics reforms and the challenge of crafting a balanced, fiscally responsible state budget. However it is clear that the two issues that must top our list of priorities going forward this year are the state’s desperate need for substantial long-term tax relief and for a business climate that will help foster a more productive economy.

A report issued earlier this year by two Rutgers economists painted a bleak picture of our state’s economic health in the wake of five years of Trenton’s tax-and-spend budget policies. This report was backed up by a recent survey of business leaders in the state concluding that confidence in the state economy among these leaders is at its lowest level since the 1991-92 recession.

The report, compiled by Rutgers economists James Hughes and Joseph Seneca, concluded that our state may now be facing its most uncertain economic future since the era of the Great Depression. New Jersey is suffering from an economic decline the severity of which has been exacerbated by the flight of affluent residents and high-paying jobs away from our state.

Over the past five years the state’s job growth has been largely limited to the public sector while the sluggish state economy hindered private-sector job growth resulting in the loss of many high-paid technology, knowledge and manufacturing jobs.

Private sector employment decreased by 7,900 jobs between 2000 and 2005, and more importantly we are losing jobs in sectors where our state used to be dominate. We lost more than 98,000 manufacturing jobs during that five-year period – twice as many as we had lost in the prior ten years.

In 1990 New Jersey accounted for a 20 percent share of all pharmaceutical jobs in the nation and today that has dropped to a 13 percent share. It is not difficult to pinpoint what has placed our state economy in this unenviable position.

For five years the leadership in Trenton has tried to balance runaway spending on the backs of our state’s taxpayers. Spending in the last five years has increased by more than $9 billion and the Democrats have hiked 94 taxes in those five years including the sales tax, the income tax, business taxes and taxes on a variety of other products and services.

These tax increases are choking off economic growth in our state and threatening to diminish the very revenues they were intended to generate. New Jersey must change course and must look at ways to encourage business growth and development in our state.

Meanwhile, property taxes have increased by 35 percent in the past five years and this is making New Jersey unaffordable for many families. As the property tax burden has made this a less desirable state in which to live, it has deprived the state of the labor market and potential investors that could support business expansion.

It is a simple formula: Hiking taxes to fund government spending, Trenton is chasing away revenue producing businesses and jobs. Meanwhile, these policies along with our state’s ever-growing property tax crisis are chasing away middle class and more affluent homeowners.

The recent special session on property taxes produced a lot of good ideas for cutting the cost of state government and reforming the way we fund our schools. The questions is whether the Democrat majority will have the courage to pursue those solutions.

Last year during the budget process Republicans proposed $2.2 billion in possible spending cuts and savings. Those cuts were rejected by the Democrats who instead increased the size of the state budget by $2 billion.

These savings, along with the ideas generated by the property tax special session, could be used to provide a substantial, long-term solution to our property tax crisis. If we were willing to cut wasteful spending we could roll back much of the 35 percent property tax increase homeowners have experienced in the last five years and sustain the relief going forward.

It is my sincere hope that the Democrat majority will not settle for a one-year, quick-fix gimmick that vanishes after this year’s election.

Republicans intend to fight for long-term solutions that make our state more attractive to homeowners and businesses. With the right priorities, we believe both goals can be accomplished.