The view from the ivory tower is because of “strict fiscal oversight” in New Jersey.
No, that’s not it.
The official state line:
While more than 20 counties and municipalities and authorities in 10 states have filed bankruptcy since 2003 because of poor financial practices or unsustainable pension debt, New Jersey has not had a local government bankruptcy since the Great Depression.
“Camden in many ways is in worse shape than Detroit, but Camden isn’t in bankruptcy and isn’t going to go into bankruptcy,” said Marc Pfeiffer, assistant director of the Local Government Research Center at Rutgers University’s Bloustein School of Planning and Public Policy.
“While New Jersey has a few municipalities that are severely distressed, we are considered one of the better states in oversight and managing funds, and it’s a system that continues to work. The states where municipalities have gone bankrupt were those with a lack of oversight and limited engagement by the state government until it’s too late,” said Pfeiffer, who spent more than 20 years tracking New Jersey municipal finances before retiring last year as deputy director of the state Department of Community Affairs’ Division of Local Government Finance.
Camden, Paterson, Trenton, Harrison, and Asbury Park are all under supervision by the state’s Local Government Finance Board and part of a special transition aid program “designed to keep municipalities afloat,” Pfeiffer said, and both Harrison and Salem City are under close fiscal supervision because of problems with development bonds.
“A bankruptcy like Detroit just isn’t going to happen in New Jersey,” agreed Jon Moran, the New Jersey State League of Municipalities’ longtime legislative director. “Here in New Jersey, for a community to declare bankruptcy, you have to get approval from the Local Government Finance Board, and before it gets to that point, the Board and the Director of the Division of Local Government Services will already have taken steps to fix the problem.”
Those steps include allowing spendthrift governments to raise taxes to whatever it takes to keep fixing pipe organs ($166,885 in Union County). A porous tax cap combined with innovative revenue enhancements (i.e. stealing from the Open Space trust fund in Union County) have allowed local governments to keep their fiscal fiefdoms intact while piling on obscene tax increases (8.31% in Union County). If the Local Government Finance Board is really paying attention to these shenanigans then what are they doing about them?
It is true that if you provide governments the means to raise taxes to whatever it takes to pay their bloated bills then those governments should never have to go bankrupt. But taxpayers? Where are their bailouts?