How bad is it in New Jersey?
Jul 30th, 2002 | 10:28 AM
#1
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How bad is it in New Jersey?
Just read the following by P. Krugman in the New York Times about Christine Whitman's abuse of office. Has there already been a decline in service at the state park and recreation centers for tourists?
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Experts already knew that the Whitman administration had used creative accounting to justify a series of tax cuts. Last year New Jersey Policy Perspective, a local think tank, released a study of fiscal policies in the 1990's titled "Take the Money and Run." Among other things, the state stopped contributing to its pension funds. This made the budget look a lot better, but created a financial hole. In an attempt to fill that hole Governor Whitman violated the basic principles of pension funds by having them engage in stock arbitrage, borrowing money to speculate on the market.
Now the state's taxpayers must make up for an investment loss of $22 billion, most of a year's tax receipts. But don't cry for New Jersey; Mrs. Whitman wasn't alone in her misbehavior.
++++++++++++++++++++++++++++++++++++++++++++
Experts already knew that the Whitman administration had used creative accounting to justify a series of tax cuts. Last year New Jersey Policy Perspective, a local think tank, released a study of fiscal policies in the 1990's titled "Take the Money and Run." Among other things, the state stopped contributing to its pension funds. This made the budget look a lot better, but created a financial hole. In an attempt to fill that hole Governor Whitman violated the basic principles of pension funds by having them engage in stock arbitrage, borrowing money to speculate on the market.
Now the state's taxpayers must make up for an investment loss of $22 billion, most of a year's tax receipts. But don't cry for New Jersey; Mrs. Whitman wasn't alone in her misbehavior.
