Spored made a very good point the other day that we don't deal much with local politics on this site. Part of the reason for me is my philosophy is actually the opposite of the 'all politics is local' maxim. I actually believe that national policies are the major driver in determining local policies.

We are currently in a recession. The recession was caused by federal policies, including the fact that Alan Greenspan at the Fed allowed first the stock market bubble, and then the housing bubble, to continue without interference. Now New Jersey has a huge budget problem, due to the fact that it is not pulling in the revenue that was planned for. On top of that, we have the fact that the Bush Administration has cut federal funding to states across the board, so Jersey is basically left on its own with some very unappealing options*.

On the one hand, we can increase taxes - but people are already screaming about property taxes in New Jersey; they have been for years, and now with property values decreasing it will be harder to justify raising taxes. In general, raising taxes is another way of saying "I would no longer like to hold office" in New Jersey.

On the other hand, we can cut services. Every attempt to cut funding to one area of local government or another has met with massive protest from angry citizens and local politicians. This has, i believe, driven our governor Corzine, who was previously a fairly dependable liberal Senator, quite mad, causing him to come up with all sorts of crazy schemes to try and find revenue. I don't agree with a lot of what he's done or attempted to do, but i find it hard to fault him too much considering his options**. So my focus is to look at the root causes of these issues, which always leads me back to the federal level.




*It's also important to note that in general, industrialized and post-industrial states like New Jersey (which also happen to trend Democratic) generally pay more in taxes than non-industrialized states in the mid-west and the South (which happen to trend Republican). Conversely, more federal funding goes to the "Red" states, so from a certain point of view Jersey sees less ROI on its taxes, putting it in a revenue hole to begin with.

**Now there are some things he can do, but they are more radical than we can expect of our politicians. If i were governor i would propose significantly raising the corporate tax rate. If you were to do this, you would have to be prepared to deal with the fact that many corporations would threaten to pick up and leave the state, which means you would have to have a solution in place to replace those lost jobs. My solution would be to at least temporarily have the state run any abandoned businesses at least until they are re-stabilized and can be sold back to an entrepreneur, but now you are running into charges of socialism in addiiton to copyright/patent issues. Another option is to lobby to change our state constitution so that we can run a deficit - as i've discussed previously, it actually makes sense for governments to run a decifit during recessions in order to stimulate the economy. This is seemingly politically unviable though as it lets Republicans make charges of 'fiscal irresponsibility'.

Update: Look what i find a few minutes after writing this post. Clearly, Jersey's problems are part of a larger trend.