Corzine's long-overdue education

Wednesday, February 27, 2008 Star Ledger

When you begin your political education by purchasing a seat in the U.S. Senate, there are certain things you miss out on.

Like everything.

By going straight from the boardroom to the Beltway, Jon Corzine insulated himself from learning the most basic lessons of practical politics. If Corzine had been better schooled in the political arts and sciences, that budget speech he gave yesterday would have come before his proposal to borrow $38 billion against future toll revenues, not after.

Here's how it's supposed to work: First you announce a financial crisis so dire that no one can figure a way out of it. Then you travel the state telling the people of the disaster that awaits them. And only then, when all of the news stories have been written and all of the interest groups have started to bombard the politicians with phone calls and e-mail, do you propose your solution.

Corzine did it backward. First he gave us the solution. Then he gave us the problem. The solution was to borrow so that he would not have to make the cuts that he announced yesterday. If the Legislature had backed his plan, he would have had $1 billion more in budget slack.

And by the end of his speech yesterday, the governor hinted that he still believes his toll-and-spend plan can be brought back from the dead.

"It is not enough to just reject the toll proposal," he said. "If you don't like that alternative, give me another viable approach to significantly reduce debt and fund important, vital transportation improvements."

That's a bit like trying to get the hydrogen back into the Hindenberg. When Corzine first proposed the plan six weeks ago, I predicted it would go over like a dead zeppelin, and for exactly the reason that he reiterated yesterday. It's true that our transportation infrastructure needs some improvements that will be quite expensive. But if that's the case, why would we also want to take billions out of the transportation system to pay off state debt?

Corzine headed off to those town meetings convinced that taxpayers would see the wisdom of using tolls to fund a vast array of expenditures that had nothing to do with the toll roads. If we don't do this, he suggested, we'll have to fire a lot of public employees, and we won't have the money for their pensions. So fire them and cut their pensions, said the taxpayers.

Corzine's proposed budget for the fiscal year that begins July 1 would accomplish half of those aims. He announced that he will lay off 3,000 state workers, mainly through an early retirement incentive program. But it's all of those early retirements that got us into this mess in the first place. A future governor will be lamenting the cost of pensions and retiree health benefits for the employees Corzine will cut.

Meanwhile, Corzine's plan does nothing to fix the problem that he's outlined at great length in the 13 town meetings so far, the unfunded liability of more than $100 billion for current and future retirees.

"We should also revisit some of the unfinished business from last year's special session on property tax reform, such as eliminating defined benefit pensions for part-time workers," he said.

We should indeed. What the governor is alluding to is a system in which a political hack can get a public job that requires little more than cashing an annual paycheck of $5,000 or so. After 25 years perhaps, said hack gets appointed to a $100,000-a-year job. If he can keep that job for three years, he can retire with an annual pension of $50,000 plus health benefits for life.

In other words, even though Corzine and his fellow Democrats labored for six months in 2006 on tax reform, they couldn't bring themselves to make even this glaringly obvious change. Why? Perhaps because lots of legislators take advantage of this loophole to get big public pensions.

In any event, it's not just the part-time employees who need to be eliminated from the state pension system. It's the full-time employees. I attended four of the 13 town meetings so far, and the one point on which Corzine convinced me is that the pension plan is effectively bankrupt. If his numbers are correct, the defined-contribution plan needs to be phased out, not just for part-time employees but for full-time employees. New public employees, both state and local, should be enrolled in defined-benefit plans just like most taxpayers are these days.

Most audience members seemed to share that view. But that's not the message Corzine wanted to convey. He clearly expected the public to sympathize with the public employees.

That didn't happen. Those town meetings are doing a lot more for the governor than for the public. And when they resume, as his staff says they will, he stands to learn even more lessons. Perhaps he'll even learn that he should have stayed in the Senate.