Spotlight Essay: Facing our Fiscal Future

By Feather O’Connor Houstoun

{Feather O’Connor Houstoun recently stepped down as President of the William Penn Foundation, which works to improve the quality of life in southern New Jersey and southeastern Pennsylvania. She was Treasurer of New Jersey from 1986 to 1990. She lives in Cranbury, Middlesex County, and Philadelphia.}

It's been more than two decades since I walked out of the Statehouse at the end of Gov. Tom Kean's administration. The state budget (now pushing $30 billion) had just edged over $10 billion, and the AAA rating was intact. Although incoming Gov. Florio was facing a difficult, challenging recession, there was confidence that the state could weather the downturn and resume its course of economic growth without dramatic change in what we had come to expect in high-quality public services.

Not so in 2011.

This spring, as the budget was being debated in the General Assembly, current Treasurer Andrew Sidamon-Eristoff and I had occasion to reflect on how the fiscal problems facing New Jersey today dwarfed those of 1990. But while our current fiscal crisis built incrementally over many years, fully unwinding those decisions to restore fiscal health is neither practical nor realistic.

Tough budget choices have been made this year. But they have not solved the problem, and indeed the problem cannot be solved at any single level of government. Instead, we need a wholly different conversation about what we want in public services, how much we are willing to pay for them, and how much we are willing to accept changes in those services to preserve their intrinsic value.

That’s a pretty abstract statement. But consider the stark conclusion of a nonpartisan group of former government officials in the report Facing Our Future: If we don’t proactively address the imbalance between the cost of services and likely revenue, we will end up in five years with a hollowing out of services at all levels of government, by a minimum of 20 percent -- before we take into account the corrosive cost of inflation. (Full disclosure: I participated in Facing Our Future, and the William Penn Foundation for which I was president through June, helped to fund the research.)

Many commissions have laid out the fiscal facts for our state. As treasurer, I served on SLERP, the State and Local Expenditure and Revenue Policy Commission of the late 1980’s, and reviewed the recommendations of more recent commissions as we drew up the findings for Facing Our Future. But to twist an old metaphor, each tended to examine different parts of the elephant in the room. The fiscal crunch is systemic; it affects every level of government, and will force significant changes throughout New Jersey.

The real question before us now is whether we will look ahead at our fiscal trajectory and make purposeful decisions that will chart a new course, or, as the fiscal pressures continue, will we just whack incrementally away at our public services until we are surprised one day by how degraded they have become. Will we be confronted with the elimination of something we valued, and wonder if we had been more engaged might we have had more control over the choices being made?

Continue reading this story in NJ Spotlight.

NJ Spotlight is an issue-driven news website that provides critical insight to New Jersey’s communities and businesses. It is non-partisan, independent, policy-centered and community-minded.