NJ Governor Warns Illinois Against Tax Hike

New Jersey Governor Chris Christie's budget address warns Illinois against following New Jersey's ill-fated decision to hike income taxes.

by Kristina Rasmussen

New Jersey Governor Chris Christie’s budget address warns Illinois against following New Jersey’s ill-fated decision to hike income taxes (listen here or go to the the 44 minute mark of the video):

…Many of our fellow states are resorting to the techniques and tricks that have gotten New Jersey into so much trouble in the past.

In Illinois, they are  raising income taxes and increasing borrowing to solve this problem. Sound familiar? Like New Jersey, they will see taxpayers leave and revenues fall. We have already been there and feel the sting of that failed policy today.

The Institute’s alternative budget shows how Illinois can balance the 2011 budget without tax hike or borrowing. Budget Solutions 2011 offers an alternative budgeting plan that addresses our state’s immediate problems rather than kicking the can further down the road. It contains three key elements:

1. Spending realignments. We outline savings that would limit current year appropriations to $21.299 billion in Fiscal Year 2011. Including the pension payment and transfers out, total spending would amount to $26.969 billion. This equals outlays of $2,089 per resident. No tax increases or borrowing is required to balance the budget.
2. Right-sizing government labor costs. Roughly 24% of the cost cutting in our proposal pertains to government labor costs, which are out of range with current private-sector rates.
3. Pension funding reform. State pension costs are ballooning and threaten to cut into core government services. Our Pension Funding & Fairness Act ensures that current pensions are funded while offering common-sense budget reforms.