Politics: Corzines Crash
To understand how Jon Corzine went from savior to pariah in one seemingly fell swoop, one has to first understand how New Jersey got into its latest economic mess. The trouble really started in Republican Christie Whitman’s administration. As the conservative editorial page of the Wall Street Journal noted, after Whitman delivered on her campaign promise in 1993 to slash income taxes by 30 percent, “Republicans decided that rather than drain the Trenton swamp, they would turn it into their own private hot tub. Spending and state mandates on local government ran rampant, as Gov. Christie Whitman sanctioned a tripling of the state’s debt.”
Fast-forward to 2006. By the time Corzine took office, state debt stood at $29.7 billion. After putting the legislature in a headlock to approve a one-cent increase in the sales tax (he allowed the state to shut down for a week), Corzine planned to tackle the debt issue head-on. Thus was born the most ambitious economic scheme in New Jersey history: a plan that proposed increasing highway tolls by 800 percent over the next several decades. The money raised would halve the state’s debt and fund sorely needed transportation improvements for years to come. It was just the kind of big-idea, think-outside-the-box plan people are now expecting from the Obama administration.
Corzine shelled out $200,000 of his own money to sell the idea to the public, traveling to 13 of the state’s 21 counties to hold town-hall-style meetings. His approach was professorial: Standing on stages in schools and fire halls, the governor offered a 45-minute PowerPoint presentation complete with pie charts, graphs and complex statistics. Debt, he told the crowds, was strangling the state: The first $860 in taxes paid by every household went toward interest and debt. Without the toll plan, the only other options to pay down the debt were to raise income taxes by 20 percent, raise the sales tax by 30 percent, or raise the gas tax 45 to 50 cents a gallon. He added that half of all Garden State tolls are paid by out-of-state travelers, and that discounts would be offered for frequent drivers.
Unfortunately, Corzine forgot one basic fact: New Jersey is the most heavily taxed state in the nation. Amid heckles and boos (some protesters even dressed in flying-pig costumes), Corzine struggled famously in a town hall meeting in Toms River that bordered on the absurd. (“I’m trying to come up with an answer that actually solves the problem,” he pleaded with the crowd.) As his approval numbers plunged, he was forced to concede the inevitable: His plan, endorsed by scholars, business leaders, the New York Times, and some Republicans (including both his Senate and gubernatorial opponents), was dead. “It was probably too hard to grasp,” Corzine muses. “The recession actually started in 2007, and people were pretty upset already with their position, and so I don’t think they were particularly open to thinking about the kinds of challenges this might bring. And I don’t know that I made a good enough case to talk about the benefits.”
