A new report showing the myriad sources of government revenue in New Jersey and where and how the money is spent provides a valuable 30,000-foot view of how our tax dollars (and fees, tolls and surcharges) can be spent more efficiently.
The report, “Adding It All Up: An Impartial Look at NJ’s $117 Billion Government,” comes at a time when the Legislature and governor are about to enter a new budget season. The number in the title of the report — $117 billion — should get everyone's attention. Hopefully, it will draw the attention of Gov. Phil Murphy, who has said tax increases may be needed to balance his 2019-20 fiscal budget, which he will unveil next month. The state’s Democratic leadership, which has been pushing a number of fiscal reforms recommended by a bipartisan task force, has said it won’t support any new taxes. This report should help bolster the case for drawing a line in the sand.
Commissioned by the conservative think tank Garden State Initiative, the report reinforces my long-held belief that New Jersey doesn’t have a revenue problem, it has a spending problem. The state’s $34.7 billion budget represents only about one third of all the money raised by New Jersey's 1,522 government entities – 21 counties, 565 municipalities, 590 school districts, 88 charter schools, and 257 authorities, boards and commissions. As the report notes, there is one government entity for every 6,000 New Jersey residents.
The report is the first in a five-part series focusing on the "true size of New Jersey’s expansive government" and how much is being spent in specific categories, and "identifying opportunities where it can be made more efficient."
The initial report is chocked full of statistics, some of them surprising. Among them: The corporate business tax only accounts for 2 percent. Fees and tolls generate 11 percent of all revenue. Property taxes account for just under a fourth of all tax revenue, and income taxes another 12 percent. Federal aid accounts for 12 percent.
In terms of overall expenditures, nearly 30 percent goes toward state government, 22 percent schools, 12 percent municipal government, 10 percent pensions, 5 percent county government and 10 percent local and state authorities. At 22 percent, public employee benefits are the largest expenditure category for the state.
"With the raging debate regarding NJ’s total tax burden," the report says, "we’re not looking to take an axe to indiscriminately cut spending, but rather, offering practical solutions that will maintain the quality of services offered and save $1 billion tax dollars."
That $1 billion can be saved, the report says, by examining the delivery of just four services: school transportation, streets and roads, school facilities and inspections. Up to $200 million can be saved through efficiencies in school transportation alone.
This report is just one of many that have been issued over the years that have pointed to ways government spending could be reduced and services provided more efficiently. When will the decision makers finally pay attention to the reports and act on the common-sense recommendations?
With budget season looming, now's a good time for Murphy and Trenton lawmakers to start.