The Freak Show: How Much Money Is Enough? Hal B. Selzer April 23, 2012 Columns New Jersey has a new law that allows the state to take the remaining funds from gift cards after they go unused for two years. Because of the law, a number of companies are pulling their gift cards out of NJ. American Express will no longer sell them here, and InComm and the Blackhawk Network, both of whom serve as middlemen for retailers and whose cards come with all kinds of brand names in convenience stores and shopping malls, will be out of the state by June. In Point Pleasant, a new law has been proposed that will require any nightclub staying open after midnight to pay a tax of $25 per half-hour times the number of people the club holds. In other words, to stay open until 2 a.m., a club holding 100 people would have to pay $10,000 per year. A club holding 500 people would have to pay $50,000. There are several major Jersey Shore clubs there, including Martell’s Tiki Bar and Jenkinson’s. This law will put another damper on the already dwindling live music scene in the Garden State. One of the reasons casino gambling was allowed was because the tax funds generated would be the windfall that would solve our financial problems. And the state lottery… that was going to bring in enough money to solve our problems. And raising the sales tax from six percent to seven percent in 2006 was going to give us the extra revenue we needed. They’ve raised tolls numerous times on highways, bridges and tunnels. But apparently none of those were enough. The politicians in our state don’t seem to care about anything but trying to come up with more ways to increase the money that goes to the government. How much money do they need? How many times will they tell us that they have the answer to our budget problems? How many more schemes will they come up with to get money from us? Prior to 1976, New Jersey had no income tax. Property taxes were less than half of what they are now. But even at that low rate, people were aghast at it being too high, so the governor at the time, Brendan Byrne, proposed a small income tax. He promised it would be a permanent solution to the state’s property tax crisis. The money generated by that tax would not only solve our school funding problems, but also fund generous rebate checks to help homeowners with local property tax bills. The income tax rates were two percent and 2.5 percent. Today, the top rate is almost nine percent, and there are many calls to bring back the surtax, on top of that, for millionaires. As recently as 2000, our state budget was $19 billion. Governor Christie has just proposed a state budget of $32 billion. Allowing for inflation, a $19 billion budget in 2000 should be approximately $25 billion today. So in reality, the government is spending $7 billion more now than it was then. Are we getting $7 billion more in services? And that doesn’t include the fact that property taxes have more than doubled in that time. But instead of getting more services, municipalities all over the state are cutting back; less trash collection, the laying off of employees, less police, etc. Much of the cost is in the education system. Back in 1976, we spent $3.3 billion a year on it. Adjusted for inflation, that would be about $12 billion in today’s dollars. Yet the budget for education is now about $26 billion. Education is important to the future of our country, so if we want to spend the money to make the system better, I’m all for it. But back in 1976, we were at the top in rankings of all the countries in the world. Today, we rank in the 20s in how our students stack up to those from around the world. We spend more money than ever and our system is getting worse. Every year, if there isn’t a tax increase in excess of the two percent cap that was instituted recently, local governments claim they have to cut back services and lay off employees. That doesn’t make sense, does it? If you have the same amount of money, in fact, a little more, than you had last year, why can’t you have the same amount of people and service? Is it because of raises? Increases in health care costs? Large pension payments? If so, then we need to deal with those issues in ways other than raising taxes and fees, because that can’t go on and on and have us expect no consequences, like the examples above of the latest money-grabbing schemes our governments have come up with. We have had completely incompetent people running things in this state, as the above statistics will attest to. And I’m not blaming either party, because both have thrown us under the bus. It has included giveaways to unions, in terms of pay, pensions, health care, and perks that people didn’t dream of getting in the days of responsible government. It has included giveaways to special interest groups, who get funds for all kinds of things that we shouldn’t be paying for. It has included money wasted on renting space the government doesn’t use. Massive extravagance at state agencies such as the Port Authority. The only way we will ever get back to some semblance of reasonableness is to start from scratch. There’s no reason our government can’t be run in a satisfactory, indeed excellent, manner on about half what it currently takes in. Yet all we get are more and more schemes to raise more and more revenue. And since the politicians have rigged the system so that our choices come election time are more of the same, no matter which party wins, it will take drastic measures to bring change. It doesn’t look like we’re going to get it any time soon. 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