California has the highest paid teachers and the most lucrative pensions – pensions that often double or triple what the private sector offers – yet has the second lowest test scores in the nation. Such profligacy in the face of a recession is precisely what has earned California a ranking of 5th worst state in the Union according to the American Legislative Exchange Coucil’s (ALEC) third edition of “Rich States, Poor States.”
The guide, written by economist Arthur Laffer and Steve Moore, grades a state’s economic policies by looking at criteria like property tax burdens, sales tax burdens and minimum wage rate.
New Jersey hasn’t fared much better. In 1965, the state had no state income tax or sales tax, and it was the fastest growing state in the union. Today, it has the highest property taxes and other high tax rates and it is the slowest growing state in the union.
New Jersey was one of the “Bottom 5” states on the list. The other four were New York, Vermont, California and Illinois.
The stimulus, which was supposed to save fledgling states like California, didn’t help matters. “Stimulus funds are drying up,” Moore said. Essentially all it did was kick the budget crisis can down the state budget road.
In a conference call about the report, the authors suggested that the solution to the states’ growing financial crises involve ratcheting down the ballooning state employee salaries and pensions. “The states’ woes will continue for years,” Steve Moore warned.
States must decide if they want to cut education or continue funding bloated pension plans. Gov. Chris Christie, R-N.J., earned plaudits for leading just such an effort by cutting state funds to education, and asking the teachers’ unions to not take a pay raise this year. If they want their raise, teachers will be fired.
It’s an ultimatum, essentially – an ultimatum that might just save New Jersey.
