Driving Governor Scrooge

Politicians often find it difficult to avoid pandering: catering to the lowest desires or weaknesses of their constituents. Seeking votes, candidates often tell the electorate that which it wishes to hear. Most perniciously, politicians devise ways of showering their constituencies with goodies at the expense of other folks.

Naturally, this particular failing afflicts Democrats more than Republicans, as the modern Democratic Party thrives on promising one segment of the population that it will compel another segment of the population to pay the former’s bills. Such has been the mantra of the Party since at least the 1930's: "tax and tax, spend and spend, elect and elect". Tax A, spend on B, and reap B’s electoral gratitude. Bad policy. Worse economics. Tough to defeat.

Repeatedly, we see this with respect to tax policy: the politics of envy. Democrats repeatedly aver that a tax which affects only a small portion of the population – death taxes, for instance – are more desirable than those which hit more broadly. Precisely the opposite is true. Those taxes which hurt everyone are best, because they discourage folks from voting themselves benefits at others’ expense.

School financing here in NJ represents perhaps the pinnacle of that philosophy: folks in Newark elect representatives, who impose taxes on Morris County residents to spend money on their own constituents. If one accepts that government may legitimately beggar one’s neighbor for one’s own enrichment, this makes perfect sense.

If, on the other hand, one believes that a polity (or a constituency) ought to attend to the costs of its own desires from its own revenues, such represents a deeply problematic philosophy.

Consider: what incentive do folks in Newark have to elect fiscally responsible representatives? Already, the "State" – read taxpayers who don’t live in Newark – pays for the vast majority of Newark’s governmental costs. The Mayor may make more than the Governor, but to the good people of Newark, such is a matter of the utmost inconsequence, as they pay only about ten cents on the dollar of that salary. If Newark pays its teachers half again the state average, why would any City resident care? However profligate municipal government might be, it affects the residents very little, as most of the bills get sent somewhere else. If Newark residents had to pay for their own government, is there the slightest doubt that it would be considerably smaller?

But the constituency for politicians in Newark who express concerns for the well-being of Millburn residents is very small. "We have no right to tax our neighbors and use the money for ourselves"? Imagine the percentage of the vote that a candidate mouthing such heresy would receive in Jersey City.

Similarly, the constituency for NJ politicians who oppose attempting to saddle out-of-state residents with a share of NJ governmental costs is likely very small.

But here goes.

One of the selling points for the Governor’s monetization scheme rests on the assertion that a significant portion of the folks who will pay the freight reside somewhere else. If we jack up the tolls on our roads, the argument runs, we can stick PA, NY, and DE residents with a significant portion of the costs of running our schools, underwriting property tax reform, etc.

It’s a (Democratic) politician’s dream: impose the costs of a spending program upon folks who can’t vote against you in the next election. Use someone else’s money as a bribe to secure reelection.

But it’s rotten policy.

And it won’t work.

Tolls should be limited to the costs of running the roads. It’s perfectly fair to ask drivers to attend to the costs associated with maintaining the highways, plowing snow, etc. And because out-of-state drivers use the highways, and impose costs which would otherwise be borne by NJ taxpayers, tolls (or gasoline taxes) can legitimately be employed to offset the costs imposed.

But it is quite another matter to ask out-of-state drivers to pay for NJ schools. These folks pay for their own schools and take no action in NJ which legitimizes an attempt to make them pay for purely local governmental operations.

Obviously, taxing Peter (whom you don’t represent) to enrich Paul (whom you do) creates an offsetting incentive on the part of Peter’s representatives. Should NJ jack up tolls – turning that which should be a user fee into a tax – other states will retaliate. The inevitable result will be to shift that which should be general obligations, paid by the general public, into a tax paid only by motorists. For every nickel that a PA resident pays to underwrite NJ schools, an NJ driver will pay in PA to do the same thing there.

And that makes no sense.

To reiterate the obvious, NJ does not suffer from a want of revenues; it suffers from a surfeit of spending. Despite this self-evident truth, the Administration and the Majority continually search out new ways to dip deeper into the people’s pockets and persist in finding new ways to spend. If they devoted one-third as much effort to cutting spending as they do to increasing revenues, the problem would long ago have evanesced.

Hizzonor repeatedly contends that he did not seek election to play Scrooge. But in Dickens’ work, Scrooge’s fault rested on his miserly refusal to share his own good fortune with others. The book would not have "worked" if the money Scrooge eventually decided to donate to the poor belonged to his clients. Expressing one’s "compassion" with other people’s money produces precisely the sort of quagmire in which we presently find ourselves. If Governor Ebenezer wishes to demonstrate "compassion", great; he possesses the personal wherewithal to attend to many worthy causes.

But not on other people’s dime.

"Monetization" amounts to nothing more than yet another massive tax hike to underwrite a massive spending spree. Cut out the latter and the former becomes unnecessary. And THAT is the policy the state should pursue.