Ciattarelli: Transparency and Immediate Savings Needed, Not More Borrowing
Ciattarelli: Transparency and Immediate Savings
Needed, Not More Borrowing
Hillsborough, April 27, 2020 – Jack Ciattarelli, a certified public accountant (inactive), two-time business owner, former local and state elected official and a declared candidate for governor today issued the following statement:
“While New Jersey hopes and prays for a return to normalcy, it’s plain that nothing is normal about our state’s deteriorating fiscal position. The Governor himself has spoken of the ‘revenue cliff’ crashing our state’s finances.
“We currently don’t know the full extent of our state budget problems. I urge the Governor to include a structured and consistent fiscal update in his COVID-19 press briefings, even if just once a week. That kind of transparency will be key to building a consensus on the way forward.
“Because of the crisis, the administration “froze” $920 million of appropriations. But that’s only 2% of the budget. We need immediate and real savings in line with clear priorities (e.g., public employee pensions vs. property tax relief).
“I have called for reviewing Governor Corzine’s Great Recession state employee pay freeze and furlough actions as a possible model, and I have long supported public employee benefit reforms. It’s also time to review every program, contract and practice, no matter the size, and suspend or end those that we can do without temporarily or permanently.
“If we still cannot meet the challenge of balancing our budget, then it will be time to appeal for a federal bailout – knowing that if it comes, it’s likely to have significant strings attached. For example, any federal bailout should be expected to help fill a one- or two-year budget hole. It shouldn’t be expected to solve our long-term pension problem.
“If the revenue falloff is $10+ billion, as Moody’s projects, federal support is probably necessary. However, we cannot afford to wait. We need to act now to identify immediate and recurring savings. It’s the only way to correctly set a course that best protects New Jersey over the long-term.
“If federal assistance is needed, we can make a good case, as New Jersey is a ‘net donor’ state when it comes to tax money sent to Washington, D.C. In fact, New Jersey is ranked one of the worst in terms of what it gets back in federal aid.
“Bailout or no bailout, we must avoid plunging New Jersey deeper in debt that will further burden taxpayers and place an unneeded drag on our economy as we work to recover. The Murphy administration’s call to borrow up to $9 billion from the Federal Reserve for operating expenses, with the reported potential for unspecified tax increases to pay it back, is alarming.
“New Jersey voters wisely amended the State Constitution several years ago to prevent more borrowing to pay for operating expenses. If the Murphy administration pursues borrowing to close budget gaps, they’re inviting a lawsuit to stop it.”