Perhaps the best example of Governor Corzine’s failure to address the state’s serious financial condition is his proposal to allow towns and municipalities to defer on their pension obligations.

In a classic case of kicking the proverbial can down the road, Corzine is simply using a gimmick that will result in more pain for taxpayers in the future. Of course, when it comes time to pay the piper Corzine’s re-election bid will be very much in the rearview mirror.

Assemblyman Alex DeCroce:

“I’d like to think the governor would have learned by now that residents don’t want leaders to keep pushing off financial problems to the future,” said DeCroce, R-Morris and Passaic. “But a year after Corzine’s biggest blunder – proposing more borrowing with an 800 percent toll hike – he comes back with another attempt to stave off New Jersey’s day of reckoning instead of making a tough stand to fix the problem.”

DeCroce said he’s encouraged that some towns, such as Cherry Hill, have recognized the scheme will only exacerbate the taxpayers’ burden.

“I’m sure it’s tempting for a mayor to skip a payment when revenues are shrinking, property taxes are rising and Corzine’s only answer has been to cut municipal aid,” DeCroce said. “But skipping this payment will only set up taxpayers for colossal – even by New Jersey standards – property tax hikes.”

In a conference call with bloggers earlier this week, Assemblyman DeCroce indicated that the interest rate on these pension deferral payments would likely be about 8.25%, but could end up even higher. And the Senate Budget And Appropriations Committe statement on the bill indicates that “the full funding level for FY 2012 through FY 2041 [emphasis added] will be greater than it would otherwise be.” In other words, higher taxes as far as the eye can see.

Of course, this begs the question: why not just resist the pension deferral tempation (as Assemblyman DeCroce urges)? Well, in an elightening post on the matter @ MoreMonmouthMusings, Fair Haven Mayor Mike Halfacre explains why it’s not that simple:

In Fair Haven, as in most fiscally responsible small towns, we are not interested in his budget gimmicks. As a fiscally responsible elected official, I have no desire to kick the can down the road to 2012, in return for nothing in 2009.

Despite our sound fiscal policies, Corzine is trying to force towns to “take advantage” of pension deferral. Towns have four options for their pension:

1) Pay their share to the Division of Pensions, as per usual;
2) Pay their share to the separate Division of Investments and let the State invest it on our behalf;
3) Invest it ourselves;
4) Not pay it at all and therefore not raise it in the tax levy.
Under the first three scenarios, since the money is being raised anyway, there would be no property tax relief.

Under the fourth scenario, the money would not be raised, and would, technically, reduce the tax levy, thereby reducing property taxes.

However, under all four scenarios, the money must be paid back to the Division of Pensions, with interest, beginning in 2012.

Why would an otherwise fiscally responsible municipality take option 4? Two Words:
Cap Relief.

Governor Corzine, with an apparently genetic predisposition to “Do as I say, not as I do” imposed a 4% property tax cap on municipalities. (The State does not have to follow this rule, which is why the State budget has grown by double digits during his Administration) (As an aside, Fair Haven does not have a “Cap Problem”)

During his “State of the State” address, the Governor went out of his way to advise municipalities that there would be no flexibility in obtaining waivers from this cap, which is a change from prior years, when cap waivers were granted routinely.

Towns with “cap problems” will then be left with no choice: they can cut services, layoff employees, engage in other drastic budget measures, or defer their pension payments.

In other words, like Vito Corleone to Johnny Fontane, Don Corzine has made an offer to towns they can’t refuse.

Had enough yet fellow Jerseyans?