Hurricane No Reason To Be Talking Tax Hikes
As the devastating damage and destruction continues to be assessed (and there is little doubt the dollar figure will end up somewhere in the stratosphere) from Hurricane Sandy, talk from politicians has started to surface that goes something like this “How can we raise your taxes to pay for all this?”
As a quick tutorial, New Jersey residents already pay the highest tax burden in the nation.
Even slowing the rate of growth of our highest in the nation property taxes was a knock down, drag out, political fight as our Governor and Senate President argued not over tax relief and cutting those taxes, but merely slowing their meteoric rise.
When that bloodbath ended, we were treated to a 2% cap, year over year, on property tax increases, unless citizens vote to exceed that cap in their municipality. Fiscal mismanagement and government spending at an unsustainable level were left untouched. Our highest in the nation property taxes would continue to make living in New Jersey more and more difficult as they would persist in going up.
Along comes Hurricane Sandy. Just two weeks ago our State was changed forever by the storm, and now our elected leaders, from both parties are failing us. Governor Christie is warning us of “Post Storm Tax Hikes.” The Governor laments that there is an “exception in the law for emergencies.” He then said:
“They’re probably going to have higher taxes,” said Christie. “It’s got to be paid for. This goes back to the old magic money tree. There’s no magic money tree.”
True enough, there is no magic money tree. Many of us have been saying that for years while clamoring for government to cut the largesse and reduce spending. Our elected leaders failed us, time and again.
Governor Christie also said yesterday that he had met with legislative leaders from both parties and that:
“I got a commitment from all four of them that Hurricane Sandy recovery issues would be outside the political realm,”
That translates to “we will be raising your taxes in the near future.” The Governor actually thinks that New Jersey’s residents won’t mind paying even more exorbitant taxes:
But the fact is, what annoys people more than anything else is waste. As long as they know that their money’s being spent in a way that’s helping bring the town back to life, I think people will understand.”
Before discussing yet more tax increases, it is a good idea to look back at what happened in Louisiana after Hurricane Katrina, as reported this week by NJ Spotlight:
In fact, based on the experience of Louisiana following Hurricane Katrina, state revenues could even get a net boost as a result of massive reconstruction financed by federal disaster relief funds and insurance settlements in the remaining seven-and-a-half months of the current fiscal year…
“When Katrina hit in August, Louisiana’s contingent revenue forecasting group met in October and reduced their revenue forecast by 10 percent,” Rosen reported. “The Republicans in the Legislature loved it because they wanted to cut spending anyway. But when the revenues came in, they exceeded the pre-Katrina amount.”
“The amount of federal and insurance money coming in was enormous, and it was amazing how quickly it got spent,” Rosen said of post-Katrina Louisiana. Louisiana’s “sales tax bubble” lasted two years, riverboat casino revenues soared because of new patronage from the construction workers who poured into the state, and income tax revenues suffered some in the first year because people who were rebuilding deferred as much tax as they could, but bounced back strongly the second year.
That recent history should be a powerful guide for New Jersey’s elected leaders in determining whether they need to further bury the citizens of New Jersey under the rubble of higher taxes. My guess is that our state taxes are already too high for sustainable growth in New Jersey. It’s just a guess, but if the revenue from a post-Sandy bubble is sent to those people who need it — instead of used by politicians to trade for votes — we might figure a way out of this mess without added new property taxes on top of the already highest burden in the nation.
We should make sure the Governor and legislature hear what we have to say about this.
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