>Rightfully or not, this issue boils down to numbers.
*Money coming in: there is no more room to borrow or tax. Bond investors will start charging NJ high rates to borrow extra dollars, and high income taxpayers have options (like moving to Florida) instead of staying in NJ and subjecting themselves to increased property, sales and income taxes. We have little or no room to increase money coming in via taxes or borrowing.
*Money going out the door: the biggest line items here are wages, benefits and pensions of teachers, firemen, cops and other public union members. This, by necessity, is where the budget must change. That is, we must cut the # of employees getting salary, benefits and pension, or we must cut the amount spent on salary, benefits and pension, or some combination of both.
As for financial services, as an industry, it is very much culpable for this current financial crisis. Then again, public union members were beneficiaries of the inflating financial bubble, as their salaries/benefits/wages could be increased as taxpayer rolls swelled, and the actuarial assumptions on their investment returns swelled, too. Now that the bubble has popped, so too have tax rolls and pension funds. The reality here is that many people benefited by the easy credit and gigantic bonuses typical of the recent financial bubble. For instance, how many high end restaurants opened up in Ridgewood or Bergen County since 2002? I’ve read stories on Ridgewood’s Cheese Shop and they’d get $10-20K orders by Wall St execs planning lavish parties. We now know about the Cheese Shop’s demise, as we know full well about the State of NJ’s budget demise as well. Again, all the beneficiaries on the bubble’s way up must now suffer adverse consequences on the bubble’s deflation.
I appreciate the hard work teachers do, and in good and bad towns alike, they do great work. But so too do people across multiple sectors and industries. There is no need to personalize attacks on teachers. Unfortunately, the numbers and the fiscal reality speak for themselves.
