Congressman speaks out about state debt
New Jersey's financial house is at risk of burning down, said Congressman Bob Franks, R-N.J. He said Gov. Jon S. Corzine's proposed state budget restructuring plan could address some of the state's debt and transportation needs.
"Jon Corzine knows how to put this together," said Franks, chair of the Governor's Financial Restructuring and Debt Reduction Campaign Steering Committee. "He's trying something new. Some things I like, some I don't."
Franks spoke Monday to members of the Somerset County Business Partnership about the plan, which includes significant toll hikes and spending cuts. Franks is one of few Republicans supporting the plan, which he thinks is long overdue.
"We have acted collectively like irresponsible children," Franks said.
He said state officials have spent more money than they have brought in.
New Jersey, currently $32 billion in debt, has an annual budget deficit of about $2 billion to $3 billion. Franks said spending has been increasing 6 to 7 percent per year, causing it to double in 11 years. But salaries have only increased 2 to 3 percent.
Franks said he is concerned with several economic indicators, which show New Jersey is one the least business-friendly states in the country. Franks said business owners are less willing to make investments due to cost of litigation, taxes and economic instability.
"Wealthy people are leaving. It's a fact," Franks said.
He said these are the people who create jobs in the state and pay the most taxes.
Franks said New Jersey needs to make significant cuts to balance the budget while investing in the state transportation system, which is the lynchpin in the economy.
"You can't move through with the proposal [without cutting spending]," said Rick Fontana, a Somerset County freeholder.
Fontana said Somerset County was faced with a similar debt problem in the mid-'90s. He said over 20 percent of the county's budget was going toward paying off the debt. County officials worked through the problem with tax increases and budget cuts.
"We've got to cut spending," he said. "If you have too much debt, you can't pay your bills."
Fontana said he doesn't support the plan as it is now. He said the state should create a plan, encompassing a hybrid of all the ideas being discussed, including gas tax increases.
Franks said the state needs to take in more revenue, which could include the proposed toll hikes. He said he supports an increase gas tax to support transportation, because the burden of repairing the roads would fall more heavily on the people using them.
"I think there's a lot of excess fat in the budget that needs to be cut," said Ricky Trippe, who works for Assemblyman Peter J. Biondi, R-16th.
Trippe said most Republicans are opposed to the plan because it still needs a little more study.
"We get a lot of calls from people opposed to the plan," Trippe said.
Attorney Stuart Freedman, a University alumnus, said he has not heard another viable plan, and there is an obvious need to pull this state out of debt.
"I am inclined to support it because it would shift some of the burden to out-of-state residents," Freedman said.
Franks, who served in Congress from 1993 to 2001, said he thinks legislators will be able to balance the budget and lower the debt. During the last three years he was in office, Congress worked with former President Bill Clinton to balance the U.S. budget and pay down the debt, he said.
"I want [my children] to grow up in New Jersey with the same level of opportunities my wife and I had," Franks said.