Revisiting the Myth of Republican Fiscal Responsibility

In 2021 when I was running for a second term on the Chatham Borough Council I wrote a piece entitled “Republicans and Fiscal Responsibility – Not So Fast.” Below is a revised version updated to reflect more recent developments at all levels of government, including in Chatham Borough

For many years, voters have been led to believe that Republicans are more fiscally responsible than Democrats, that they can keep taxes low by limiting government and by unleashing the private sector to generate economic growth.

The problem is, the track record of Republican fiscal responsibility is not there, not at any level of government.

Politicians are in office for a limited time (we hope) and it is relatively easy for them to use short term measures to bring down taxes, but leave the consequences for future generations to deal with. Tax cuts without spending cuts are not fiscally responsible. Low taxes while deferring maintenance on critical infrastructure is not fiscally responsible. Postponing inevitable financial responsibilities is not fiscally responsible.

New Jersey’s biggest liability – our public sector pension obligation – was handicapped by financial games that Republican Governor Christie Todd Whitman played over 25 years ago, and the results were predicted at the time. When Whitman assumed office, the state's budget was balanced without gimmicks and its credit rating was triple-A. New York Times columnist Bob Herbert and many others wrote at the time that these actions would “place a financial stranglehold on future generations of New Jerseyans.” Those predictions were correct.

https://www.nytimes.com/1995/02/22/opinion/in-america-whitman-steals-the-future.html

Many of the fiscal problems we’ve seen in New Jersey since then have stemmed from that act and similar gimmicks by Republicans, none of whom presented a thoughtful plan to shrink or re-organize government to make it smaller or more efficient. There are also examples of Democrats acting recklessly, but these don’t diminish the basic point: while Republicans promise “lower taxes and smaller government,” they often don’t have the stomach to do the smaller government part. “Lower taxes and looming unfunded obligations” is a less sexy slogan, but is often more accurate.

Listening to Republicans, you would think that Governor Murphy’s policies would take New Jersey’s budget from a ditch to off a cliff, but interestingly, while the state was in dire fiscal crisis when Republican Chris Christie left office, all of the major ratings agencies have upgraded the state’s credit consistency ratings since Phil Murphy became governor. These gains and the reasons for them are spelled out here NJ Gets 3 More Credit Rating Upgrades and actions by the current Democratic administration get much of the credit.

In the Chathams, we have seen our own examples. In the Borough, an all-Republican Council cut reserves and kept taxes low after the 2008 crash and recession, but ended up in a financial pinch requiring a 3.38% tax increase in 2011 and then a 6.81% tax increase in 2012. Repeatedly, a Republican Council ignored needed improvements to infrastructure and equipment in the name of cutting costs, even though this often leads to higher costs in the long run (as we are seeing with the need to spend over $3 million for fire apparatus, something that is beyond the capacity of our tax raising capability).

There are many areas where government can and should be made more efficient, and there is a reasonable discussion to be had about the role that government should – or should not – play at every level. But those complaining about taxes should do the hard work and figure out where to make up lost revenues, or where to cut costs.

At the local level, if you leave out health insurance, pensions, and interest on debt, even a small cut in the budget will require deep cuts in services. If you leave out police and fire (fortunately a volunteer force in the Chathams) and public works, almost nothing is left to cut. Those who say otherwise should show their math.

Under the past five years of Democratic control Chatham Borough has gone from being on an unsustainable fiscal path and underinvestment in infrastructure to a sustainable one with a plan to maintain and replace (as needed) critical capital assets.

We know that people believe data that confirms their biases – that is why some gave Trump credit for stock market and economic growth that was similar to that under Obama, but did not blame him for the exploding deficit. That is why Bill Clinton doesn’t often get credit for the longest, strongest period of economic growth in our lifetime, even though it happened under his watch. That is why George H.W. Bush doesn’t get blamed taking the Clinton surplus and creating a massive deficit which mostly helped defense contractors and the ultra-rich. Just yesterday, the Penn Wharton budget model estimated that Trump’s fiscal plans would increase the budget deficit by $5.8 trillion, while Harris’s would increase it by $1.2 trillion, yet people still think Trump has a better economic plan.

And yes, both parties continue to be reckless with borrowing at the federal level, but it is Republicans for the most part who continue to deny the real impact of tax cuts without spending cuts, claiming that these cuts pay for themselves and that rewarding the ultra-wealthy benefits the middle class more than supporting the middle class does. As Patrick Moynihan said “You are entitled to your opinion. But you are not entitled to your own facts.”

Chatham Borough continues to provide an extremely high level of services for the proportion of your property tax that goes to the municipality. If you own a home assessed at $1 million, you pay about $260 per month for all of the Borough services covered by your tax bills – roads, sidewalks, yard waste and leaf pickup, snow plowing, our parks and playing fields, police and fire services, our health department, and emergency services and preparedness, and community services like our concert series, white lights, tree lighting, and other events. As elected officials, we treat every dollar we budget as if it is our own money – but $260 a month remains an excellent value given the exceptional quality of the services we receive.

(Notably, you pay almost as much to Morris County, but few know what they get for those dollars.)

This myth of Republican fiscal responsibility has been accepted for too long. Voters must look behind the curtain before they vote. Is Chatham Borough on a path to pay down debt? Yes. Does it have a long-term plan for capital improvements? Yes. Are they planning now for issues we know are looming – such as affordable housing obligations? Yes. Are financial decisions being timed around elections or around your town’s operational and infrastructure needs? The latter. These – not “what is your party” – are the questions that voters must ask.