[INSPRATIONAL MUSIC STING] - We're joined once again by Senator Declan O'Scanlon, Republican Budget Officer.

Good to see you, Senator.

- Good to see you, Steve.

How's it going?

- Things are great.

By the way, we're taping on March 17th, St.

Patrick's Day.

Special day for you?

- Your audience is the only thing standing between me and the first Guinness so let's get this going here.

You have another 30 seconds before I run out.

- I got it.

It'll be seen later, but here we go.

Do this for us.

The governor's $60.7 billion budget.

Tell us a couple things you like about it and then some concerns, Senator.

- Just in general, the inclination on the part of the governor certainly rhetorically to start living within our means.

Removal of a lot of one shot pork items is a good thing.

The real question will be at the end what's built back in.

Legislative leadership has grown a little bit addicted to these one to $2 billion increases in spending after a governor has put a budget out and that happened the last few years.

So we'll have to see.

The proof will be in the pudding.

But I like that.

- Before you go to the next thing you like, is one of the reasons you don't like those items, those spending items, is one of the reasons, Senator, because they go to Democratic- - No.

- No, no, no.

Let me finish.

Let me finish.

- I know exactly what you're gonna ask.

- Hold on.

If you were in charge and Republicans are in charge of the Senate and the assembly, and you got those perks, you got things for your district that help your constituents, would you be so against them?

- Not in a million years.

I would be against them.

- Okay.

- Because, otherwise I'm hypocrite.

And look, the proof is in the pudding.

I talk to my own members who have projects in their districts and I tell 'em, we have no legitimacy if we're gonna play this game.

Now look, I've got senators on the other side of the aisle.

They claim that they care about fiscal prudence and they say that but they're giving out pork anyway, so I'm gonna take it.

Well, that is a moral judgment that they make.

But when Republicans are in charge, God willing, I'm still here, I will be back on your show.

God willing, you're still here as well.

And there'll be billions in less pork, I promise.

- What's the second thing you like about the governor's budget?

- Again, rhetorically, and it isn't just budgetarily, but the idea that she's gonna cut red tape, expedite permitting.

So rhetorically, those are things I like.

- What don't you like?

- Well, we're not making a lot of progress.

- Are there are more things you like?

- There's the few things.

Let's not get carried away.

We gotta focus on what we can make better.

- Okay.

- We still have a three to $4 billion structural deficit.

We have now discovered that the governor a few weeks ago admitted Republicans were right saying that we had at least a $3 billion structural deficit.

Republicans said four.

In her budget, this is one thing I like about her budget, she confirms that Republicans were right.

We have a $4 billion problem 'cause if you look at this budget overarchingly, we increased spending by around 2 billion, not quite, but around.

We increased taxes by around 2 billion.

Not quite, but around.

That's a wash.

We're spending our surplus by 2 billion, which is troubling.

So our structural deficit is still at least 2 billion, which means if she's saying that we cut it in half, it was four.

But then she has 2 billion in supposed cuts, which we could talk about.

Not really.

A bat to those things aren't real cuts.

So we are probably still between three and $4 billion in structural deficit.

That's a thing I don't like.

- But she's very specific and think about this, and you understand the legislature more than most.

She was right in front of, or right behind her was assembly speaker, Craig Coughlin, who I also interviewed today.

He's the author of the Stay NJ program.

That is a program that attempts to keep people in the state, seniors in the state.

I believe it's if you earn less than $500,000, you get up to a $6,500 tax rebate.

The governor says no, that number should go from a half a million dollars, right?

$500,000 to 250,000.

- 250.

- And above that you get nothing.

And from $6,500 to 4,000.

That's a real proposed cut.

A and B. Do you think that she'll be able to convince the Democrats?

- Well, I'm gonna disagree with your premise.

That is a reduction of tax relief, which means it's a tax increase.

I included that on my $2 billion of tax.

- You said spending, Senator.

It's a cut in spending.

- It's a tax increase.

So hold on a second.

So if you had income taxes were at 10% just for the sake of argument and you cut 'em to 5% and 10 years later, you increase it back up to 10%, that's a tax increase.

This was tax relief that you are cutting.

It's a tax increase, but there's no question about it.

- So you would keep it the way it is?

- I would say cutting tax relief should be the last thing that you're gonna go after.

You want to cut real government expenses.

- Such as?

- Look, Republicans have put out billions in savings.

You could do prospective pension and health benefits reforms which could save you over time more than a billion dollars.

- Isn't she talking about healthcare?

She's talking about health benefits change.

Isn't she talking about health benefits?

- She is not talking much about health benefits.

They are gonna try to bail out their increasing spending on the state program but we haven't seen any real reforms so we don't know what's gonna happen there.

The state health benefits program is in a death spiral and it still is.

The governor wouldn't even deny that even with this budget.

So, no, I disagree with the premise of that cutting tax relief is not a tax increase.

I don't think there's any other argument.

I don't understand that.

- What about state funding to public schools, the state schools?

- So hold up.

Just real quick back on this until you agree with me here.

- Right.

- Let's say we eliminated, I'm not recommending this, we eliminated all property tax relief.

Would you say that's a tax increase or a spending cut?

- That's a tax increase.

- Thank you.

So I think the same thing goes with Stay NJ.

A promised tax relief that you're cutting is a tax increase.

So at any rate, that's a thing I don't like about it.

- What's the biggest change you would make in the state school funding formula?

Because there are a bunch of winners and a lot of losers, please.

- And this is a big area where we have a problem.

They should have fixed this during this budget process.

I realized it was compact and I like the governor by the way, I should state that.

I'm really forming a good relationship with her.

But my job is to make the budget better and to criticize where we make mistakes.

The school funding forum is a mess.

It cuts or doesn't keep up with inflation for half the school districts.

A lot of those school districts are choking on fumes.

I mean really cutting all extracurricular activities, increasing class size dramatically.

It's a problem.

And there's easy ways to fix it with tweaks to the funding formula.

And by the way, we'll just undo changes they're making to the formula.

One of the things they're doing is not abiding by the formula, Capping increases to districts that had massive decreases over the past few years.

Just undo that.

For about 50 million, 75 million, you could really dramatically improve conditions in these districts.

They should have done that.

And I'm in contact with the Board of Education, the state board now to make sure that happens.

- Senator Declan O'Scanlon, Republican Budget Officer.

It is a special day for many New Jerseyans, particularly for him today.

Are you going to have a Guinness right now?

- I am gonna have a Guinness right now.

I'm gonna go see my family.

I'm gonna go see some friends.

Great traditions.

Great traditions.

- And that would mean your work as a senator is over today.

- Oh no.

When I end up at my family or at the bar, everybody's gonna talk policy.

It's gonna happen.

Everywhere I go, it's 24/7, but I like it so it's all good.

And over- - Thank you, Senator.

- It's easy.

- Thank you, Senator.

Appreciate it.

I'm Steve Adubato.

That's Senator O'Scanlon.

And this, we're taping on St.

Patrick's Day.

It'll be seen later.

Happy St.

Patrick's Day after the fact to everyone.

I'll see you next time.

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