The Mercatus Center at George Mason University is releasing a new study, “Institutions Matter: Can New Jersey Reverse Course?”
Authored by myself and Mercatus colleage, Frederic Sautet, the paper examines the history of the public sector in New Jersey, including the relationships between the federal, state, and local governments, discussing how the loss of the “old time fiscal religion” has resulted in unmanageable budget deficits and a weakened state economy.
Years of spending growth, increasing mandates, and expanding use of intergovernmental aid and debt have inflated the size and cost of government, leading to dramatic increases in taxation at all levels. Leaving the state in the midst of the worst fiscal and economic crisis in its history.
We find that the state’s recovery hinges on reforming rules for taxing and spending — in short, re-establishing fiscal prudence, and reducing the size and scope of government.
Namely, we recommend the state government:
- Reintroduce competition to local government,
- Cap spending through a Constitutional Tax and Expenditure Limit,
- Reform tax policy to favor economic growth and stability,
- Lower the cost of government to improve services and increase accountability, and
- Clarify the “education clause” in the state constitution.