At the New Jersey Affordability Forum held at Raritan Valley Community College today, I got the chance to hear Independent gubernatorial candidate Christopher Daggett outline his plan to fix the N.J. fiscal mess.
His plan, he says, is not to increase taxes - but instead to expand them. For instance, he would apply the 7% sales tax to more items, services in particular, thereby allowing the sales tax to generate more revenue, which will allow property taxes to decrease.
I don't know about you, but, to me, an expansion is an increase. In fact, on items that were never taxed before, the increase is infinitely large! But quibbling over whether an "expansion" is an "increase" misses the real issue.
Being a school board member means that I am thinking about property taxes all the time. You don't have to think very long about property taxes in order to develop a real loathing for them. But there is one good thing about our property tax system - it keeps our locally generated money right here in our community.
The property taxes that you and I pay each quarter are used to run our municipality, our schools, and our county services. With the exception of our municipal pension contributions, that money never makes it to Trenton. That means it can't be squandered by Trenton bureaucrats.
Daggett wants to send MORE of your money to Trenton, and that's the problem. The state has a habit of taking the income tax and sales tax money and making it disappear. Just take a look at the school construction fiasco or the plethora of useless patronage jobs.
In the spirit of the Affordability Forum, I offer a solution. A solution in sharp contrast to the Christopher Daggett big government plan. I propose that we eliminate the state income tax completely and allow New Jersey's twenty-one counties to implement their own income tax system. Let the counties keep the tax revenue generated by their citizens and use that money to alleviate the property tax burden. Let the counties decide which school districts and municipalities need financial aid. Cut out the State Street middleman.
The state can still have the sales tax, the highway tolls, and all of the revenue generated from various licenses. If any of the counties finds that they can't generate enough income to run their schools, the state can help out with the Lottery money - that's what it's for, right?
I'm not a financial wizard, and I'm not running for Governor, so this is only an idea. I don't have any numbers to back it up. But the underlying philosophy is sound. The state government is too big now, "expanding" the sales tax - giving even more money to Trenton - will only, ultimately, increase the size of government. And that's something we just can't afford.