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| Corzine First to Face Voters as Governors Brace for Backlash |
| 2009-03-24 |
| New Jersey Governor Jon Corzine says his plan to shrink a $7 billion budget gap by raising taxes and cutting workers' pay will create "a stronger footing for tomorrow." By the time that tomorrow comes, Corzine may be out of a job. The governor, a former chairman of Goldman Sachs and the only incumbent up for re-election this year, is trailing his likely Republican opponent amid voter anger over the economic crisis -- and the steps he's taking to deal with it: a fiscal 2010 budget that lops 9 percent from the current one, a wage freeze and unpaid furloughs for state workers, and possible cuts in property-tax rebates along with higher taxes on the wealthiest residents and on cigarettes and alcohol. Corzine, 62, is the first governor to feel political wrath; he won't be the last. The 50 U.S. states are facing combined deficits of as much as $370 billion over the next 2 1/2 years, according to the Center on Budget and Policy Priorities. President Barack Obama's economic-stimulus package will probably cover just $140 billion of that, the center says, leaving states with two choices: cut spending or increase taxes. "It's a rock and a hard place for every state," says Joe Seneca, a former chairman of New Jersey's Council of Economic Advisers and an economics professor at Rutgers University in New Brunswick. "State reductions are still necessary despite the federal support, and that will again further weaken the economy." Balancing the Budget Unlike the federal government, most states must balance their budgets. And when they try to erase deficits by raising taxes and cutting jobs, they risk further damage to the economy because people with less money won't spend as much. While Democrats captured the presidency in November to go with their control of both houses of the U.S. Congress, the anger at the state level knows no party; whoever is in power is fair game. A list of governors who may be in trouble in 2010 compiled by the Cook Political Report in Washington includes Democrats Corzine, Bill Ritter of Colorado, Pat Quinn of Illinois, Chet Culver of Iowa and Jim Doyle of Wisconsin, along with Republicans Jan Brewer of Arizona, Jim Gibbons of Nevada, Tim Pawlenty of Minnesota and Charlie Crist of Florida. Democrats currently hold 19 of the 36 governorships that will be up next year. |
| Posted by:Fred |
| #5 EU6305, if Caleefornya would act in it's own self interest and deport the illegal aliens (or at least turn them over to ICE, rather than acting as a sanctuary), I would have more sympathy. |
| Posted by: Rambler in Virginia 2009-03-24 17:58 |
| #4 Propping up state expenditures with deficit federal financing prolongs the adjustment period. Unless you're talking about California where we spend billions on illegal aliens; housing them, feeding them, educating them, jailing them and providing for their health care. They're a federal problem so it would be kinda nice if the feds would help us out with some of those expenses. |
| Posted by: Ebbang Uluque6305 2009-03-24 17:49 |
| #3 DoDo is right. There is just as much pork and waste at the state level as there is at the national. I can't wait to see Ritter go, personally. A complete disgrace. |
| Posted by: DarthVader 2009-03-24 15:34 |
| #2 Wouldn't that be a very stimulating use of the cash? Growth in state expenditures exceeded economic growth over the last expansion. They need to come down to come into alignment with the private sector's ability to produce revenue. Propping up state expenditures with deficit federal financing prolongs the adjustment period. |
| Posted by: DoDo 2009-03-24 11:20 |
| #1 So let me get this straight. 1/3 of Obama's planned deficit spending could pay off ALL the states deficits combined? Wouldn't that be a very stimulating use of the cash? |
| Posted by: AlanC 2009-03-24 10:48 |