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But you keep forgetting this is a National recession.
The state budget is related to the recession, but it is not the same thing. Fixing the state budget is a problem that needs to be attended to without exacerbating the recession.
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The second question is- do you believe government workers having lesser benefits really help you as a private sector worker or does it lower the bar for the benefits that your private sector employer has to provide to attract and retain talent.
If the government provides certain benefits that makes that job more attractive does a private employer need to compete. There are many industries that can not move out of the State- banking, retail, service industry, sales etc. Yes manufacturing can and did go but it went all the way to Asia and no State in the US can compete.
I can address this. With the exception of occupations that are dominated by public sector workers (teaching) and minimum wage jobs, the government don't really "set the bar".
If it was decided that the government should "set the bar" by ensuring that government work was the most lucrative career, it would ultimately hurt the economy, because it would drain top talent from the private sector (you know, where those tax dollars come from).
Moving away from defined benefit plans would help, because it helps prevent the state from going bankrupt, or at least reduce the size of the bailout that the state will need to ask the feds for. While nobody likes cuts, self-imposed discipline is less unpleasant than that imposed by creditors and those offering a bailout.
As far as benefits are concerned -- the total compensation package is what counts. Private sector employers can't really get away with giving employees something that costs $30k if the employee thinks it's only worth $10k (btw, this is one reason high income taxes aren't business friendly!). Everyone understands how much a $10k bump in salary is worth. Even matching 401k contributions are easy to value. Employees aren't nearly as good at correctly valuing a defined benefit plan.
Shorebaby is right that financial firms have the option of moving their operations around. Software development can be located almost anywhere. These days, the trading operations can (and do) locate almost anywhere. There are some large trading desks that are not located in NYC/Chicago. Older firms have their roots in NY, but newer ones keep popping up, and these new ones are free to pop up anywhere. Complacency is what destroyed big auto, and it could also destroy NYC as a financial center if it ever forgets that it needs to stay ahead of the curve to be competitive.
The same is true of the exchanges themselves -- electronic trading makes it easier for someone to set up an exchange somewhere besides NY. ICE for example are based in Atlanta.
So they will all go to China where the pay is $30 a month.
Huh? I am not sure if you mean the wealthy will go to China because of lower taxes, but if that is what you are meant I am sure there is a happy medium between here and China.
""We're very confident we've been able to close the additional budget gap in (fiscal year) 2010 and in (fiscal year) 2011 we're going to be able to solve that problem without any new taxes at all and without any real significant cuts," Christie said.
Skipping the "fiscalese," what happened was the budget freeze imposed by Gov. Christie when he took office generated more savings than expected, enough to cover much of the lost tax money."
Who do you think the vast number of the millionaires are? Athletes, Wall Streeter's, Entertainers, Doctors and Lawyers with lucrative NJ practices and businessmen with successful businesses located in NJ. Now why and how is it so easy for them to leave. So the lawyer/doctor can just go and automatically they will have a million dollar practice some where else? The businessmen can just up and go and automatically his client base follows. I do not believe it is as easy as you believe it is. Athletes live by where their team is based- we just lost one millionaire to Washington DC.
Why do you doubt that if they leave someone else will not step in and fill the void and their business or practice will grow?
As I pointed out -- those whose work revolves around New York City can live in either NY, NJ or CT. If all three of these push taxes too high, the whole region will ultimately suffer for it, as the money will find its way to whatever tax havens it can.
Doctors and lawyers to a large extent support the local economy. Of course the support infrastructure for the local economy can't pack up and leave, but then, the support infrastructure is not what generates the wealth to begin with.
What will happen is that the wealth generation engines (e.g. pharma, finance, technology) pack up their bags and leave, and those doctors and lawyers find that their practices suddenly aren't as lucrative any more (and then some of them might leave too). They can't do this overnight but they can do it gradually. Larger firms have presences in multiple branches, which makes it harder for any single state to tax them to oblivion. Smaller firms are popping up all the time, and they will pop up in places where the owners want to set up a business. If no-one wants to set up a business in NJ because the tax climate is toxic, that stifles growth. For example, Atlanta has an electronic futures exchange (ICE). Why doesn't NJ have such a thing ?
The "businessmen" go wherever the business is. They travel frequently and can quite easily acquire multiple residences -- they would be among the first to find smart ways to avoid being soaked.
I thought I read recently that NJ has the largest growing sector for back office computer data services in the country. Landlords are seeing significant rental activity in building housing these systems.
If the income is generated in NJ then the tax is due NJ no matter where they live.
Okay- lets say you are correct on everything. Answer my questions on what you will cut.
If I were in charge and had political cover to do whatever I wanted:
Long term -- fix the pension system. That means closing entry to defined benefit plans and buying out those who are already in them with lump sum payments. The latter would be extremely controversial because it would bankrupt the plan.
Mid term, challenging some of the mandates, policies and procedures that make high spending almost inevitable. For example, Abbott districts and binding arbitration.
There is no pleasant way to implement cuts in the short term. There is an enormous infrastructure built around a budget that we can't afford to pay for. Pulling funds (e.g. including state aid) from places that don't spend them intelligently is a start but it doesn't completely solve the problem. Entities that are on life support from the state (like Irvington township who sent property tax bills of almost 3k to some of their residents) need to be treated like bankrupt debtors and the state needs to play an active roll in putting these places on track (on track to self-sufficiency, that is)
""We're very confident we've been able to close the additional budget gap in (fiscal year) 2010 and in (fiscal year) 2011 we're going to be able to solve that problem without any new taxes at all and without any real significant cuts," Christie said."
Skipping the "fiscalese," what happened was the budget freeze imposed by Gov. Christie when he took office generated more savings than expected, enough to cover much of the lost tax money."
LOL so we have to take a freeze forever. Every year there are expense that go up. Little things like the cost of maintaining the building, buying materials, paying people salaries.
And if he isnt raising taxes where do you think that money will come from? Come on this isnt brain surgery? CUTTING FUNDING!! YAY!! So once more, what will happen next year when there are even more cuts that must occur in order to stop from raising taxes?
""We're very confident we've been able to close the additional budget gap in (fiscal year) 2010 and in (fiscal year) 2011 we're going to be able to solve that problem without any new taxes at all and without any real significant cuts," Christie said.
Skipping the "fiscalese," what happened was the budget freeze imposed by Gov. Christie when he took office generated more savings than expected, enough to cover much of the lost tax money."
ROFLMAO!!
Do you even read your own sources?
"Christie wants to slash education spending and enact other cuts."
How is that not "nothing needs to be cut"?
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