With just two days to go, the New Jersey gubernatorial election has turned into a horse race among three candidates, a remarkable development considering that the incumbent, Democrat Jon Corzine, has huge unfavorable ratings. As one radio talk-show host put it: “Who is voting for Corzine?”
The answer is simple: people who benefit from big government. In a high-tax, big-spending place like Jersey, much of the burden of funding government falls on a narrow slice of residents who pay steeply progressive taxes, while the benefits of expanding government are enjoyed by those who receive more in services than they pay in taxes, or those who work for the government.
Even a candidate like Corzine, with high unfavorables and a tax-and-spend record, can count on support from about 40% of the electorate. That’s a pretty good starting point, especially when the anti-tax crowd divides its vote among two other candidates — in this case, Republican Chris Christie and Independent Chris Daggett.
To understand how voting patterns work, look at who pays for government in Jersey, and who benefits. The state has one of the most progressive income tax structures, so that residents earning more than $250,000 in 2007 (the last year data are available) constituted just 3.9% of all households but paid 59% of state income taxes. And these folks will pay an even bigger share of the burden this year because Corzine raised their tax rates and cut some of their deductions.
Then look at the massive geographical redistribution of wealth that is going on in Jersey. Several years ago two Rutgers University professors studied the flow of tax dollars throughout the state and concluded that six suburban counties (Hunterdon, Mercer, Middlesex, Monmouth, Morris and Somerset) were sending $2 billion more in taxes to Trenton than they received in state services. At the same time four urban counties (Camden, Essex, Hudson, Passaic) received $2 billion more in state aid than they paid in taxes.
That money is used to pay for government and school systems in cities like Camden and Newark. The state, for instance, pays more than 90% of the bill for the Camden school system, one reason why the schools there can spend a whopping $22,000 per student. So it’s no wonder that Camden residents will support Corzine against any candidate who promises to rein in state spending. In one poll, 61% of the state’s urban dwellers said they would vote for Corzine.
Jersey also has a problem with high local property taxes, and the solution has been to heavily politicize the system through a rebate program that creates yet more winners and losers.
Like most rebates, Jersey’s works by taking revenues from other taxes, especially the income and sales tax, and funneling them into fat checks for some homeowners. Jersey has based rebates on household income levels and other qualifications, like senior citizen status, but over time the state has reduced and then eliminated the rebates for higher income earners. So a number of residents are financing a program through their income-tax payments from which they themselves are now excluded.
Such rebate programs, which do nothing to solve fiscal problems because they don’t address overspending, are nonetheless popular among some voters, which is why politicians struggle to maintain them at the expense of true reform. In Jersey, where seniors have been among the biggest beneficiaries of rebates, polls show Corzine leading his two opponents in support from those aged 65-and-over.
The other important constituency of the Corzine candidacy is public sector workers, who wield enormous power in New Jersey. The state has the fourth highest level of public worker unionization in the country, with 63% of its workers in unions, and the state’s workers have used their power to garner some of the highest pay and benefits in the country. Average teacher salaries in Jersey, for instance, are $60,000 a year, third highest of any state.
Big government in New Jersey has meant a rapidly growing public workforce, providing more foot soldiers in political campaigns. Since 2000, for instance, the number of full and full-time equivalent state and local government workers has grown by 13%, or 55,000 workers, at a time when the state’s population has increased by just 3% and its private sector workforce has not added any new jobs. Although state workers have lately been upset with Corzine because a sharp fiscal pinch forced him into budget cutting, the unions have all backed him because Christie and Daggett have taken a tougher line about worker costs and spending.
The state’s teachers union, the NJEA, for instance, has sent mailings to 200,000 of its members detailing a list of things Christie claims he will do to reduce their power. For election day, the NJEA promises to have 3,000 workers at polls, triple the number of the last election.
What’s happening in Jersey is the inevitable consequence of big government. As the public sector grows, reform becomes harder. And Jersey may be a preview of where our national politics are going.
The vast expansion of the federal government is giving more and more people a stake in big government. Federal stimulus funds have kept state and local payrolls growing even as the private sector has shrunk. Meanwhile, fewer and fewer taxpayers will bear the burden of this bigger government. Under President Obama’s current tax plans, credits and tax cuts will raise the percentage of American households who do not have to pay income taxes to 45% of all those who file returns.
When we get to the point where nearly half the country doesn’t bear any responsibility for the cost of government, that will ensure a Jersey-like, built-in constituency for an ever-growing public sector.
Steve Malanga is senior editor at the Manhattan Institute’s City Journal.