February 29, 2008

THE INCREDIBLE SHRINKING BUDGET CUT
CORZINE’S BUDGET REDUCTION SUDDENLY SHRINKING IN MAGNITUDE

Assembly Republican Leader Alex DeCroce today expressed concern over newspaper reports that Governor Jon Corzine’s reduction in spending this year was largely achieved, not by spending cuts, but by moving existing spending off the books.

“Just when we thought that the governor might be getting the message on spending, it appears he has once again misled the taxpayers,” said DeCroce, R-Morris and Passaic. “There can be no question that the Governor represented this budget reduction as a cut in spending – not a shifting of funds off the books. This means that there are more than $300 million in alleged ‘cuts’ that don’t really exist.”

A story today in The Record of Hackensack reported that Governor Corzine's budget contains an extra $300 million in spending for employee benefits, but doesn't acknowledge those funds as an expense for the year, meaning that he is actually proposing to spend $33.3 billion in the coming fiscal year, not the $33 billion he outlined Tuesday.

The extra spending represents $334 million the state is using largely to pay for a new early-retirement program designed to reduce the size of the state workforce. The administration is not putting the spending on the books, arguing that it is a one-time payment.

“Sadly the budget tricks and gimmicks continue,” DeCroce said. “Whether this is a one-time payment or not, it is money being spent in this year’s budget and it should be on the books.”

DeCroce wondered how much more of the budget cut may vanish as lawmakers seek to add new spending programs before the budget deadline.

“I’m afraid this could be the start of a trend,” DeCroce said. “Come June this budget may not be smaller after all.”

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February 29, 2008

DOHERTY SEES NO SIGNS THAT CORZINE PLANS TO ABANDON TAX AND SPEND WAYS
GOVERNOR IS PUSHING AHEAD WITH TOLL PLAN AND WILL LIKELY BACK PAID FAMILY LEAVE TAX

Assemblyman Michael Doherty today said that just three days after Governor Corzine’s “cold turkey” budget address, he has seen no signs that the governor is fully committed to putting an end to his tax and spend approach to governing.

“The Governor announced yesterday his plans to go forward with the advocacy campaign for his massive toll hike and borrowing plan,” said Doherty, R-Warren and Hunterdon. “His administration is still planning on borrowing $2.5 billion for school construction this summer, and he apparently supports a new payroll tax that is part of the costly paid family leave program now advancing in the Legislature.”

“Doesn’t sound like a significant change in direction to me,” Doherty added.

Corzine will resume next week his tour of all 21 New Jersey counties to discuss his massive toll hike and borrowing proposal. This indicates that Corzine has not abandoned the proposal despite steep opposition on both sides of the political aisle in the Legislature.

The paid leave act now moving through the Legislature would be funded through an assessment paid by workers equal to 0.09% of the portion of each worker’s wages subject to TDI taxes. In 2010 and subsequent years, the rate would be 0.12%. It is projected that the cost will be an extra $40 per year for the average taxpayer.

Questions have been raised as to whether that will be sufficient to fund the program or whether additional revenue sources might eventually be needed. In his budget address Corzine said that his spending plan “contains no new taxes of any kind.”

Corzine also had pledged to put an end to borrowing without voter approval in his State of the State address only to have his administration inform the New Jersey Supreme Court shortly thereafter that it is drafting legislation to borrow $2.5 billion for school construction, and that it expects the funding to be authorized this summer. That borrowing would not be voter approved.

“In the past six years the state has increased spending by $11 billion and has hiked 101 taxes – a good bit of which was done by this governor,” Doherty said. “If Governor Corzine was really committed to changing this tax and spend philosophy, he would drop his toll plan, forget about new borrowing, and veto the paid family leave bill and its new payroll tax.”

The Assembly Republican Task Force on Fiscal Responsibility, headed by Doherty, will hold its next town meeting Wednesday, March 5th at the Cheesequake Volunteer Fire Company in Matawan, New Jersey.

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February 29, 2008

IN CASE YOU MISSED IT...

Now back to our regularly scheduled waste
Editorial, Courier-News, February 29, 2008

In the wake of a budget address this week recommending painful cuts to a host of programs and services, Gov. Jon Corzine has reappointed Jeanne Fox to another six-year term as president of the Board of Public Utilities.

What's the connection? Wildly contradictory messages. Corzine pitched his budget plan as some sort of turning point in the state's fiscal management as New Jersey supposedly puts the credit card away and stops spending beyond its means.

Yet he maintains the same leadership at an organization that has become a symbol of financial waste and abuse?

That turning point appears to have come 360 degrees back to where we started.

The BPU has been under fire for years, without resolution. Under Fox, the BPU created a Clean Energy account, funded by ratepayers, in a private bank without the knowledge of the Department of Treasury. An audit of the more than $80 million account, hidden from the public for years, blasted shoddy administration of the account.

Clean Energy is also the subject of a whistle-blower lawsuit in which a former BPU official claims he was retaliated against for alerting Treasury officials to the account. State and federal investigations of Clean Energy began in 2006 but have not been resolved -- at least publicly. The state has spent a million dollars on private lawyers to defend the case, before it has even reached trial.

And to add one more troubling element to this, Fox is married to Steve DeMicco, who happens to be a prominent Democratic operative who has worked on campaigns for Corzine.

Fox has dismissed the Clean Energy audit as inaccurate and incomplete. A Corzine spokesman said the governor has "full confidence" in Fox.

He shouldn't, or at least not with the entire BPU operation. Whether or not there's underlying fire here, there's too much smoke in the air for the governor to ignore.

That doesn't mean Fox is guilty of anything. But part of Corzine's responsibility is to do in action what he says in words, making smarter choices to bring down costs. And those choices have to be made everywhere, not just when it's convenient for the governor or when it's not personally difficult for him to do so.

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February 28, 2008

WEBBER: PAID LEAVE ACT WILL LEAD TO INCREASED PAYROLL TAXES, MORE UNFUNDED REGULATORY MANDATES
ASSEMBLY LABOR COMMITTEE APPROVES BILL

As legislation providing for paid leave benefits inched closer to becoming law, Assemblyman Jay Webber said committee approval for the new tax today proves Democrats are not serious about making bold and permanent state spending cuts.

“I find today’s passage of the paid leave act very disturbing,” said Webber, R-Morris and Passaic, a member of the Assembly Labor Committee. “Just two days ago, Governor (Jon) Corzine finally admitted Trenton’s status quo is no longer acceptable and that taxpayers should not have to bear the brunt yet again for six years of tax, spend and borrow policies that have also decimated this state’s economy. Yet Democrats today put their stamp of approval on a what will amount to be an additional income tax increase for employees and employers alike.

“While I believe the purpose of the paid leave act is well intentioned, the reality of the matter is that today our committee approved a $100 million tax increase that will fall disproportionately on our low-income earners,” he continued.

The Assembly Labor Committee today approved bill A-873, which would allow workers to take up to six weeks of paid leave to care for family members unable to care for themselves. It would be funded through an assessment paid by workers equal to 0.09% of the portion of each worker’s wages subject to TDI taxes. In 2010 and subsequent years, the rate would be 0.12%. Estimated revenue of the tax in future years is $64.5 million in 2009, $97.4 million in 2010, and $104.2 million in 2011. The bill applies to every employer regardless of size.

State law currently allows employees to take unpaid leave taken under the State “Family Leave Act,” or the federal “Family and Medical Leave Act of 1993” in these circumstances. This bill requires that workers be paid for those leaves.

“The ramifications of this bill on New Jersey taxpayers and businesses will be devastating,” said Webber. “Not only will its impact harm the very people it is intended to help, but we will lose more jobs as well.”

Noting that the state has one of the worst business climates in the nation, Webber explained, “This bill also represents a new tort tax on employers who will incur significant new expenses in avoiding and defending lawsuits. Moreover, employers would need to hire and train temporary and/or replacement workers or other employees to cover their fellow worker’s workload. It would put our state out of synch with other states, making us an even more unfriendly to business.”

The bill will likely head to the Assembly Budget Committee for consideration.

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February 28, 2008

DOHERTY: WILL CORZINE DO AN ABOUT-FACE ON TAXES LIKE HE HAS ON BORROWING?
CALLS FOR CORZINE TO VETO PAID LEAVE BILL IF HE IS REALLY COMMITTED TO A BUDGET WITH NO NEW TAXES

Assemblyman Michael Doherty today said that if Governor Jon Corzine is committed to a budget with no new taxes, he should pledge to veto the paid leave bill that was released this afternoon by the Assembly Labor Committee and is scheduled for a full Senate vote Monday, should it reach his desk.

“In his budget address last Tuesday, Governor Corzine said he was proposing a budget that includes no new taxes and fees,” said Doherty, R-Warren and Hunterdon. “Yet today, his Democrat colleagues are moving a bill through the Legislature that will create a new payroll tax for all New Jersey residents to support a paid family leave act.”

The paid leave act now moving through the Legislature would be funded through an assessment paid by workers equal to 0.09% of the portion of each worker’s wages subject to TDI taxes. In 2010 and subsequent years, the rate would be 0.12%. The bill applies to every employer regardless of size.

In his budget address Corzine said that his spending plan “contains no new taxes of any kind.”

Doherty said that if the bill is signed into law by Corzine, the governor will be breaking his word by adopting a new tax and using its revenue during the coming fiscal year. He noted that this wouldn’t be the first “about-face” by Corzine this year on an important fiscal issue.

Corzine had pledged to put an end to borrowing without voter approval in his State of the State address only to have his administration inform the New Jersey Supreme Court shortly thereafter that it is drafting legislation to borrow $2.5 billion for school construction, and that it expects the funding to be authorized this summer. That borrowing would not be voter approved.

“There have been many instances of this governor saying one thing and doing just the opposite,” Doherty said. “This will be another opportunity for the governor to stick by his words and to do the right thing. The taxpayers should watch closely. I hope he doesn’t disappoint them again.”

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February 28, 2008

IN CASE YOU MISSED IT...

The Daily Journal

A lot more to do to fix state's financial woes
Editorial, The Daily Journal of Vineland, February 28, 2008

Gov. Jon S. Corzine delivered a dose of tough love this week in his budget message, medicine sorely needed and long overdue to help cure the state's financial ills.
The strong medicine in the $33 billion budget, which cuts spending by 1.5 percent, includes cutting at least 3,000 state jobs and eliminating the departments of agriculture, commerce and personnel.
  
Under the proposal -- which would make the second-largest spending cut of any budget in New Jersey history -- aid to municipalities, hospitals, and colleges and universities would be cut. The spending plan would eliminate property tax rebates for households that earn more than $150,000. It also would reduce rebates for households earning between $100,000 and $150,000 and for renters.

The pain won't stop there. Health care co-payments for Medicaid and the state's FamilyCare program would increase and non-profits that provide community services wouldn't get a cost-of-living funding increase.

Corzine, talking about the reception he has received in his town hall meetings to sell his toll-road plan, said "the public is 100 percent right to be angry" about the cost of government. "Frankly, New Jersey has a government its people cannot afford."

We only wonder what took so long for the governor to get the message. If Corzine had listened to the people sooner, he wouldn't have increased state spending by at least 18 percent since taking office, given double-digit raises to judges and prosecutors or pushed for a $450-million stem-cell research bond issue loan that voters rejected.

This is a hard budget, and we've already heard the howls from those potentially affected by the cuts. And at this point we're not prepared to say that the budget should go through as proposed. Adjustments might have to be made once the full impact is clear.

But the reality is that this budget spreads the pain of spending cuts around and doesn't raise taxes. Isn't that exactly what residents have been calling for all along?

One year of belt tightening and practicing fiscal responsibility won't solve the state's long-term financial problems -- structural budget deficits, $32 billion in debt, and future liabilities for public employee pensions and medical coverage.

More can and must be done in the years ahead, including a lot more reductions in the state payroll, the consolidation and merger of municipalities and schools, and much-needed pension reforms. But this budget is a step in the direction New Jersey must go to begin to get its finances in order.

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February 27, 2008

DOHERTY AND WEBBER: PAID LEAVE ANOTHER NEW TAX
BILL SET TO BE HEARD IN COMMITTEE; FLIES IN FACE OF CORZINE’S CLAIM OF NO NEW TAXES

Assemblyman Michael Doherty and Assemblyman Jay Webber, members of the Assembly Labor Committee, today said they find highly troublesome Democrats are moving forward with a bill to provide paid leave benefits in light of Governor Jon Corzine’s claims his proposed budget contains no new taxes or fees.

The two lawmakers said the bill, A-873, will impose an additional income tax increase on all New Jersey workers and would further harm the state’s business climate. It is set for a hearing Thursday in the Assembly Labor Committee.

“This legislation will have a devastating impact on businesses in our already struggling state economy,” said Doherty, R-Warren and Hunterdon. “Just yesterday, Governor Corzine presented a budget in which he clearly stated it does not contain any new tax increases. If this bill is permitted to advance, then he and the Democrats are definitely sending a mixed message.

“This bill creates a new tax and the governor can’t have it both ways,” he continued. “If this bill moves forward, then it will be quite clear the governor’s message was just more of the same rhetoric we’ve heard for years.”

The paid leave act would be funded through an assessment paid by workers equal to 0.09% of the portion of each worker’s wages subject to TDI taxes. In 2010 and subsequent years, the rate would be 0.12%. The bill applies to every employer regardless of size.

According to an article in the Wall Street Journal on June 20, 2007, the federal Department of Labor estimates that paid family leave programs cost employers an average of $1.76 per hour per full-time employee, or 6.8% of total compensation. Using the above hourly estimate, a company with just 10 full-time employees would see an average increase of approximately $36,608.

“Increased payroll taxes on already over-taxed employees and additional unfunded regulatory mandates on already over-regulated employers — that’s what this bill actually forces on New Jerseyans,” explained Webber, R-Morris and Passaic. “Payroll taxes are among the most regressive taxes that can be imposed on citizens. If approved, we will lose more jobs and the very people this bill purports to help will, in reality, be harmed by its cascading negative effects. 

“We were told just yesterday that the governor supposedly wants to end the policy mistakes of the past, but this bill simply repeats the Trenton tax-and-mandate approach that put the State in its problems in the first place,” he continued. “It’s yet another disconnect between words and actions.”

Current law allows employees to take unpaid leave under the State “Family Leave Act,” or the federal “Family and Medical Leave Act of 1993.”

Doherty will propose an amendment to the legislation Thursday that would exempt businesses with 50 or fewer employees in an effort to make it consistent with the federal leave act.

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February 27, 2008

KARROW SAYS CORZINE CUTS SEEM TARGETED AT RURAL AND SUBURBAN COMMUNITIES
SUPPORTS CUTTING BUDGET, BUT SAYS CUTS MUST BE FAIR

Assemblywoman Marcia Karrow, a member of the Assembly Budget Committee, today said that after reviewing more of the details of Governor Corzine’s budget, it is becoming apparent that Corzine has unfairly targeted his cuts at rural and suburban communities while protecting his urban constituencies.

“A serious effort at cutting spending would involve fair cuts across all 565 municipalities that ask everyone to share the burden equally,” said Karrow, R-Hunterdon and Warren. “It appears that Governor Corzine has decided to cut the budget based on political calculations instead of a thorough review of waste and inefficiency.”

Karrow pointed to several categories of budget cuts that seem disproportionately targeted at smaller, rural and suburban municipalities. She noted that while Trenton’s Capital City Aid will only be cut by $1.9 million, from $37.5 million to $35.6 million, the entire $32.6 million 2008 Property Tax Assistance program that aided many suburban and rural communities was completely eliminated.

Additionally, Governor Corzine cut only $7.6 million out of the Special Municipal Aid program, leaving $145.4 million which benefits a handful of urban municipalities. On the other hand, Corzine’s $62 million cut in CMPTRA aid appears mainly targeted at communities with less than 10,000 residents.

Karrow said that the Highlands Act has put a moratorium on development and has forced municipalities to remain rural and the Governor is now further punishing those towns financially.  “Our Highlands municipalities have their hands tied by legislation that forbids them to add new ratables to offset tax cuts and now the Governor is also cutting state aid and, in some cases, their rural police patrols.  This simply adds insult to injury.”

“There will be nobody more aggressive about cutting state spending than I, but those cuts must be fair and they must be across the board,” Karrow said. “It is simply not acceptable to protect funding for large, inefficient urban municipalities while squeezing rural and suburban regions of the state for more money. When he talks about sharing pain, the Governor is, once again, being disingenuous.”

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February 27, 2008

HANDLIN SAYS REAPPOINTMENT OF BPU PRESIDENT SHOWS THE NEED FOR INDEPENDENT AUTHORITY REFORM LEGISLATION

Assemblywoman Amy Handlin today said the decision by Governor Corzine to reappoint Board of Public Utilities (BPU) President Jeanne Fox despite recent controversies regarding the mismanagement and possible misuse of funds in the board’s clean energy program should once again focus attention on the need for reform of the state’s independent authorities.

“With the controversy that has enveloped the BPU for the last few years, I hope the Senate Judiciary committee will ask Ms. Fox to account for her role in these matters,” said Handlin, R-Monmouth and Middlesex. “The questionable practices at BPU are exactly what I was seeking to target with my legislation calling for greater oversight of independent authorities.”

Handlin has introduced a bill, A-401, establishing a permanent “State Authorities Review Commission” to review on a periodic basis the operation of State authorities and to report on December 1 of each year its findings and recommendations, if any, to the Governor and the Legislature. Handlin said the abuse at the BPU is exactly the type of waste that this legislation seeks to eliminate.

An audit by the Treasury Department of the BPU’s $100 million clean energy program found the clean energy program to be rife with abuse. Investigators from the Attorney General’s Office questioned agency officials about irregularities at BPU. In 2006, Handlin called for the U.S. Attorney to look into the matter.

Among the problems alleged were the depositing of program funds in a bank account outside the state’s financial systems with no controls, funds being wasted on unnecessary bank fees, program staff awarding funds through grants to friends and neighbors, contracts being awarded with no competitive bidding or review process.

As a result of these problems, a career BPU employee filed a whistleblower lawsuit alleging retaliation by BPU officials for his role in disclosing these questionable practices. That lawsuit led to BPU and the state hiring four private law firms to defend the agency and its officials.

“The decision to reappoint a person who was at the helm of this agency amid all of these problems goes to show how these independent authorities often lack accountability,” Handlin said. “I hope that the Legislature will approve my reform measure in this session so that we can begin to restore some oversight to these authorities.”

Handlin said the Senate Judiciary Committee should aggressively question Fox regarding her role in the controversy regarding the mismanagement and possible misuse of funds in the board’s clean energy program which led to the costly whistleblower lawsuit.

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February 27, 2008

IN CASE YOU MISSED IT...

Don't raise tax on gas: That is last thing we need as prices rise
Editorial, Daily Record, February 24, 2008

With the governor's toll increase plan falling apart, Assemblyman John Wisniewski, D-Middlesex, is proposing an alternative: Raise the state gas tax by 18 cents over three years and increase highway tolls more modestly.

One problem with this idea is that it does not address the state's outstanding debt. Another one is that with gas prices possibly heading toward something ridiculous like $3.50 per gallon by summer, the last thing the state should do is increase the gas tax.

In regard to the state's debt of $32 billion, Wisniewski said, "We can pay our bills." Yes, we can. But not addressing the debt problem -- which is something at least that Gov. Jon Corzine's plan would do -- is not a solution.

On that end, Tuesday looms as a very big day. The governor, who will unveil his new budget that day, is talking about cutting at least $2.5 billion from the projected budget that takes effect July 1. That would keep the new budget in line with the current budget of $33.5 billion.

Last week, there was talk of going further and reducing the $33.5 billion figure. We hope that happens. Significantly reducing government expenditures would show a commitment by the governor to change the way things are done in Trenton.

We reiterate that the solution has to revolve around reducing expenses; the state is not going to tax itself out of the hole it is in.

Readers should tell Wisniewski -- who most recently was a sponsor of a misguided bill to name Route 23 after a convicted drunken driver, former Rep. Robert Roe -- that the gas tax should not be raised. Reach him at (732) 316-1885.

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February 27, 2008

IN CASE YOU MISSED IT...

Corzine's cold, hard facts
Editorial, The Star-Ledger, February 27, 2008

If everyone agrees something must be done to control state spending, why is there so much howling coming out of Trenton? The answer is that most bureaucrats and special interests hold dear this truth: Everyone's program should be cut except mine.

Yesterday Gov. Jon Corzine delivered his annual budget address, which, as expected, offered a tough plan to whack spending. By now, Corzine -- who has been going around the state touting his wildly unpopular asset monetization plan -- is accustomed to giving speeches to unreceptive audiences.

Unreceptive, however, may not fully describe yesterday's audience. Lawmakers, Cabinet members and guests sat silently in the Assembly chambers as Corzine delivered his somber fiscal message.

Never before has a governor delivered a budget message without being interrupted at least once by applause -- if only from legislators in his own party.

After the speech was over, however, the screaming began. Protests were heard from agricultural groups, environmentalists, hospitals, municipalities, school officials and various Republicans.

All bore the same message: Make cuts -- but not these.

Corzine offered a realistic assessment of the state's financial condition. It's time all concerned take it seriously. New Jersey is in a fiscal crisis.

The deep cuts Corzine proposed may be distasteful to many, but if they eventually prove to be widespread and fair, they should be enacted.

Polite applause greeted the close of Corzine's speech. We suspect he couldn't care less about cheering and huzzahs but rather is looking for recognition by lawmakers, special-interest groups and the public of the depth of the state's fiscal problems and the resolve needed to fix them.

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February 27, 2008

IN CASE YOU MISSED IT...

Let the whining start on budget
Editorial, Gloucester County Times, February 27, 2008

As a public service, here's a do-it-yourself whining kit for special interest groups and state employee blocs that can't deal with Gov. Jon Corzine's proposed state budget cuts:

Dear Governor/Lawmaker:

The (fill in department, agency or grant recipient here) has already seen a disproportionate share of budget cuts in recent years, including the loss of (fill in number) jobs due to the ongoing hiring freeze. This new reduction will further weaken (department, agency or grant recipient's) ability to protect New Jersey's (fill in appropriate victim, such as children, business climate, environment or health care system) causing real consequences that will impact public health and safety.

In fact, further cuts to the (department, agency or grant recipient's) budget could actually result in a net loss of revenue to the state. Among the (department, agency or grant recipient's) sources of income are the federal grants that pay for New Jersey to administer certain programs. Without the staff necessary to carry out these programs, the state may lose these grants.

Sincerely,

(Fill in name and appropriate affiliation)

This should give everyone some idea of what Corzine is up against in the first true attempt to cut New Jersey's budget as it needs to be cut this year. The fill-in-the-blanks "form" above is adapted from an actual e-mail the Times received not 15 minutes after the governor delivered his bad news in Trenton on Tuesday. We won't identify the lobbying group involved, since that's not really the point.

The point is that Corzine listened. He unhappily proposed what he knows is bitter medicine that goes against the grain of his inclination to try to solve problems by providing more dollars.

At $33 billion, his new budget has come in at roughly $500 million less than last year. By the governor's measure, $350 million of that will come from shrinking state departments and programs.

The remaining cuts will come out of municipal and higher education aid, charity care reimbursements to hospitals, and tweaks to the property tax rebate program. These cuts are not insignificant, to be sure. But local governments, colleges and hospitals also have obligations to try to spend money more wisely.

The governor avoided cutting public school aid and ending the rebates most homeowners depend upon to help level property taxes that have reached near-obscene levels. It may be a continuation of Trenton-only math to contend that a budget that's down by $500 million from the one introduced a year ago has $2.7 billion in "cuts." But to claim that Corzine's reductions are too small is really an invitation to higher school taxes and fewer rebate dollars to buffer those taxes.

Lawmakers can, and should, fret over details. Some cuts really might shift costs into areas where it will be impossible or ruinous to pay them. No one wants bankrupt medical centers or 30 percent college tuition increases. But there's a duty to check the claims of hospitals that keep constructing Taj Mahal expansions while crying poor, or to investigate assertions of college presidents who say there's no such thing as misspent money at their schools.

The "general public" that overwhelmingly wants New Jersey on a spending diet may well include the very same people who'll be upset by shorter hours at a state park or inconvenienced by a motor vehicle office closed on Saturday. It may be important for ordinary citizens to stand up and say they're OK with such cuts while the state is in a bind. Gov. Corzine deserves to have them on his side. He's put forth difficult cuts against an onslaught of interest-group carping that will be unprecedented, even for New Jersey.

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February 27, 2008

IN CASE YOU MISSED IT...

The guv's gambit
Editorial, The Trentonian, February 27, 2008

Gov. Corzine’s proposed state budget, with its purported draconian spending cutbacks, is calculated to make his fellow Democrats who control the legislature break into a cold sweat.

Corzine’s bet, we suspect, is that the legislature will fold. That it will approve the governor’s toll-hikes-borrow-and-spend scheme or some tax-hiking alternative. Note to taxpayers: Be prepared in either case to dig deep. Again.

Corzine says his budget will reduce the state payroll, through hiring freezes, layoffs and other measures, by 3,500 employees.

If he actually did so, he would find himself suddenly popular with taxpayers beyond his wildest dreams.

But our guess is that he and his legislative minions won’t go through with an austerity budget because of their symbiotic relationship with public employee unions.

Thanks to this mutually dependent relationship, Trenton Democrats are more inclined to fret about pleasing the army of unionized state, county, municipal and school district employees than to fret about the concerns of private-sector taxpayers.

At the heart of the symbiotic arrangement, the Trenton Democrats, through state aid appropriations, see to the sustenance of local as well as state fiefdoms. The state budget pumps $11 billion of aid to school districts, for example, and Corzine’s supposed austerity budget proposes to increase that sum by $500 million. The public employee unions, including notably the New Jersey Education Association, reciprocate with campaign donations and volunteers.

As for the state bureaucracy itself, tax dollars appropriated to sustain it exceeded the Cost of Living Index by 18 percent, or more than $1 billion, 2004-2006, according to figures in the state’s annual financial report.

The $83 billion in unfunded future liabilities for public employee pensions and medical coverage didn’t accrue overnight. Nor did the $2.5-billion “structural” shortfall in the state’s more immediate finances.

So why didn’t Corzine move to address this situation from the moment he took office?

If he’s not bluffing, why did he wait until now to propose reining in costs? Why would he have attempted, for example, to cajole taxpayers into approving a $450-million stem-cell research bond issue loan, as he did in the recent election, knowing full well that the state was already carrying $32 billion of bonded indebtedness — third highest per capita in America?

Likely a straight answer to such queries will come — to borrow a recent line from the governor himself — when pigs fly over the Statehouse.

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February 27, 2008

IN CASE YOU MISSED IT...

We got the pain; now, how much to gain?
Editorial, Courier-News, February 27, 2008

Gov. Jon Corzine's budget plan indeed hurts -- as promised. In reducing last year's final budget by $500 million, this year's $33 billion proposal includes more than $3 billion in spending cuts. The governor recommends slashing aid to colleges, hospitals and municipalities, cutting thousands of state government jobs, and eliminating property-tax rebates for wealthier residents.

As expected, howls of protest quickly erupted from all of the potentially affected interests, and understandably so. The pain of this budget will spread far and wide, affecting all residents.

But this is also what the vast majority of New Jerseyans have said they wanted, insisted was needed -- spending reductions. No new taxes. No budget gimmicks. No elaborate 75-year toll-hike schemes. Just a "simple" emphasis on bringing spending down to a level more within the state's means.

That's what Corzine's budget provided Tuesday -- at least in its broad brush strokes. Already there are complaints that the results of this plan will increase taxes because of the greater financial burdens placed on various entities. That's a legitimate concern.

But the need for more prudent spending isn't isolated to state government. Improving New Jersey's economic condition requires a partnership of sorts from all levels of government and from all industries. If, for instance, reductions in municipal aid prompt local leaders to raise taxes even higher to compensate, the benefit of the state reductions will be negligible. Everyone needs to tighten their belts.

There will undoubtedly be some changes in Corzine's budget as legislative negotiations unfold, some small, others significant. As the details are digested, more flaws will emerge. Certainly, for instance, a reliance on early retirement packages to reduce the government payroll would be a mistake. Hospitals are already suffering mightily without another cut in charity aid.

Other proposed cuts seem more defensible at first blush. The state's colleges and universities deserve a healthy public investment, but wasteful spending in those institutions is an ongoing problem; aid reductions there should not be balanced on the backs of students with higher tuitions.

And while Republicans object, Corzine took a reasonable approach to paring down property tax rebates by eliminating them for those with household incomes over $150,000.

Corzine still wants to tackle New Jersey's debt with some version of his toll-hike plan. And there remains plenty of wasteful spending that still isn't being meaningfully addressed, including the bloated benefits packages for state workers.

But we got what we asked for Tuesday. Now it's time to refine the plan and make it work.

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February 27, 2008

IN CASE YOU MISSED IT...

Cuts both ways
Editorial, The Record of Hackensack, February 27, 2008

The governor who last year narrowly survived the wreck of his official Chevrolet Suburban must be credited for his courage if nothing else. In a political sense, he keeps throwing himself in the path of speeding tractor-trailers.

Governor Corzine spent much of the past few months telling the public that he wants to quintuple their highway tolls, angering taxpayers and emboldening Republicans. Having absorbed more than the expected pummeling, the governor was back for more Tuesday -- when he told a Legislature controlled by his fellow Democrats that he wants to cut spending on many of their favorite interests.

To borrow some of his native Wall Street patois, the governor seemed almost determined to divest himself of obvious alliances. It's a measure at least of his sincerity that he has been willing to propose measures abhorrent to each side of the aisle. Tuesday was the Democrats' turn to squirm.

"It's certainly not a budget designed to please," the governor said, looking rather displeased himself throughout the exercise. "I can tell from the applause lines."

That is, there weren't any. Between arrival and departure, Corzine didn't get even a single polite round of applause -- which is unusual in the mutually congratulatory atmosphere of joint sessions of the Legislature. The Republicans, of course, couldn't clap because Corzine is a Democrat. The Democrats couldn't because they're Democrats.

After the long silence stopped, some Democrats were already trying to rein in the great reining-in. "We need to slow down this budget process and do a true cost-benefit analysis," said state Sen. Ron Rice, D-Essex. "We need to do a 'cut-benefit' analysis," said Senate President Richard Codey, D-Essex. "We have a responsibility to carefully scrutinize all cutbacks," said Assemblywoman Bonnie Watson Coleman, D-Mercer. "Clearly this budget will require a great deal of scrutiny," said Sen. Shirley Turner, D-Mercer.

The $33 billion proposal would reduce state spending by about $500 million, or 1.5 percent. But the governor says that existing obligations and growth "baked in" to the budget would have pushed spending up some 10 percent. According to his calculations, then, the administration really had to make cuts worth $2.7 billion to keep the budget from expanding.

We imagine different cooks might offer different opinions on how much growth is "baked in" to the cake and how much is frosting. But the fact is that over the state's entire history, governors have rarely proposed budgets that are smaller than the prior year's. Of the last 50 proposed budgets, only five promised a cut in total spending. Only two made a proportionately larger cut.

The largest single reduction in Corzine's budget is $472 million from so-called property tax rebates, affecting households earning more than $100,000 and all tenants. Republicans, implausibly, were calling this an effective tax increase. While the ill-conceived rebate program has had committed, bipartisan supporters (including Corzine), it's also one of state government's biggest expenses, and no plausible budget-cutting regimen can ignore it. In fact, one of the few budget proposals that beat Corzine's for austerity did so chiefly by eliminating much of the rebate program.

The next biggest cut, tellingly, is a $400 million deferral of the state's pension obligations -- part of the mountain of debt Corzine was hoping to retire with the toll hikes.

Next comes $350 million from shrinking the state government, including reducing the workforce by at least 3,000 employees and eliminating three (relatively small) Cabinet-level departments.

Meanwhile, sizable cuts in aid to towns, hospitals and colleges will ensure that virtually every legislator has some very unhappy constituents as a direct result of Corzine's proposal.

As the governor's toll road show has grimly coursed its way through the counties this winter, Republicans have shrilly demanded spending cuts and considered the debate finished. As even they had to admit Tuesday, he has now given them at least some of what they wanted -- and the debate will continue.

Corzine's proposed toll hikes have encouraged a debate on how the state can raise the revenue it needs to pay for infrastructure and retire debt. His suggested savings should encourage a similar debate on how the state can stop spending money it doesn't have.

On both counts, the governor has offered opening proposals that, whatever their flaws, are serious and sincere. The rest of the state's politicians are obligated to respond in kind.

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February 27, 2008

IN CASE YOU MISSED IT...

Gov. Corzine an "addict" too
Editorial, Asbury Park Press, February 27, 2008

Gov. Corzine Tuesday called his proposed $33 billion budget "cold turkey therapy for our troubled spending addiction." It is sure to cause some tremors. But it doesn't do enough to end the addiction.

The first step in curing an addiction is admitting you have a problem. Corzine has been more than willing to concede it was a problem for other elected officials, including his predecessors in both political parties. But he has taken no personal responsibility for his role in deepening the state's fiscal crisis.

In his budget address Tuesday, which called for 1.5 percent less spending next year than this year, he noted that his proposal included the second-largest spending cut in state history. And the budget is one of just four in the past 57 years to call for a spending reduction. It would eliminate the agriculture and personnel departments and the commerce commission. It would cut spending in every department of the executive branch. It would reduce the state payroll by about 4 percent. It would reduce or eliminate property tax rebates for about 30 percent of the state's families. It would cut municipal aid by nearly 10 percent.

Harsh medicine, for sure. But not harsh enough, in no small part because Corzine failed to tend responsibly to the state's fiscal health in his first two years as governor. Since taking office, he has increased state spending by $5.1 billion — or 18 percent. He gave no explanation Tuesday for why he didn't see the crisis coming last year, when he increased the state budget 7 percent, or why he saw fit to increase spending on schools by $520 million — or 7 percent — or to give double-digit raises to judges and prosecutors when there was a crisis at hand.

In implying that he was fiscally responsible while other elected officials were not, he cited the contract givebacks he negotiated with the state employee unions last year, givebacks that resulted in an estimated $40 million in savings this year — an amount equal to .001 percent of the state budget. He failed to mention how he rejected most of the substantial property tax reduction recommendations made by four special-session legislative committees last year.

Corzine conceded his proposed budget would not solve the state's long-term financial problems, for which he offered no specific solutions. He projected that this time next year, the state will be faced with a $1.7 billion budget deficit, only about $800,000 less than this year's. If the economy tanks, the gap could be far greater.

Corzine said the public is "100 percent right to be angry about the state of New Jersey's fiscal affairs." It has taken him far too long to figure that out. His budget proposal will help stanch the bleeding. But the state won't be restored to full fiscal health until Corzine finally addresses the root cause of the malady: too many public employees collecting salaries and benefits taxpayers can't afford.

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February 27, 2008

IN CASE YOU MISSED IT...

Bureaucracy at heart of budget woes
Editorial, The Express-Times, February 25, 2008

How vexing is the state of New Jersey's budget dilemma? How difficult is it to resolve through political means? Here's an example:

There is no region of the state that rails louder against the bond-and-spend, toll-and-spend mentality in Trenton than our own -- Warren and Hunterdon counties. Whenever the Democratic-controlled state government asks for direction, there is a resounding "cut spending!" response from the people here.

The good news is that view is spreading. One of the effects of Gov. Jon Corzine's road show -- promoting his plan to raise tolls and borrow against future toll revenues -- is that it is mobilizing anger against a bloated state bureaucracy and years of collusion that have helped drive the cost of living and taxes in New Jersey through the roof.

If Corzine remains true to his promise to cut $2.5 billion from the budget plan due out Tuesday, there is sure to be something to irritate every constituency. In addition to cutting up to 4,000 state jobs, Corzine says he might eliminate three state departments -- Agriculture, Personnel and Commerce -- and scale back tax rebates, cutting out households in the $150,000-$200,000 range.

Eliminating the Department of Agriculture, however good it looks on paper, would send a strong signal that the state is ready to give up on the state's agricultural community, particularly in southern New Jersey and in our area. Most farmers are already facing pressures intensified by government fiat exemplified by the Highlands Act's flushing of property equity.

Telling farmers that "we can't afford" an Ag Department and stuffing it into another office will only accelerate the conversion of farmland to development -- ratcheting up the demand for roads, sewers, services, etc. that in turn raise the pressure on local municipal and school taxes.

All of which raises the cost of living in New Jersey.

It's critical that Corzine and legislators keep their axes sharpened for the true budget busters -- public employee salaries, benefits, pensions. Most of the structural budget deficit isn't decided in public deliberations but in secretive contract negotiations with employee groups that over the years have given away the ship.

The state is carrying a staggering $32 billion public debt. Factoring in health care and unfunded pension obligations, it soars to $113 billion, or $3,400 for every person in the state, according to a Wall Street Journal analysis.

The reality is that whether the economy is growing or declining, public spending over the past few decades has effectively bankrupted the state's future. Corzine's toll-road monetization plan, while it seeks to halve the current state debt, is still a borrow-against-the-future plan.

What are the top priorities? Job cuts. Sensible sharing of health costs. Reopening labor contracts to change pension plans. Enrolling new hires in 401(k)-type retirement funds.

There is sure to be plenty of pain all around in Corzine's budget but reform and debt reduction has to start at the heart of problem, and that's the bureaucracy.

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February 27, 2008

RUMANA: BUDGET CUTTING IS THE RIGHT MOVE
CAUTIONS THAT SLASHING PROPERTY TAX RELIEF IS NOT A SPENDING CUT

Assemblyman Scott Rumana today issued the following statement in response to Governor Jon Corzine’s Fiscal Year 2009 budget message to the state Legislature:

"Spending in Trenton has been out of control for far too long and today’s budget message gives us hope that we may finally be able to scale back that spending. Cutting the state budget is a step in the right direction, and if these budget cuts can be backed up with long-term structural reforms designed to keep spending in check, we will begin to solve our state’s budget problem.

“What we cannot do is mistake reductions in property tax relief programs for legitimate spending cuts. Cutting property tax relief is not a spending cut – it is a tax hike. It will result in people paying more in property taxes, which is exactly what we should be trying to avoid by cutting spending.

“I am willing to work with the governor on legitimate spending cuts, and will continue to study his budget proposal to find additional areas where we might achieve savings. This is a long budget process and today is just the beginning.”

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February 26, 2008

ADDIEGO AND RUDDER: PROPOSED CUTS MUST BE PERMANENT

Assemblywoman Dawn Marie Addiego and Assemblyman Scott Rudder today said that while they are encouraged that Governor Jon Corzine has finally decided to cut state spending, they said they are willing to work with the governor and Democrats in identifying additional budget cuts.

“Governor Corzine is finally listening to what the people of New Jersey and the Assembly caucus has been saying for six years – the solution to our problems is to cut spending,” said Addiego. “While he has provided us with a good starting point with his proposed cuts – many of which were proposed by Republicans two years ago - some of his reductions miss the target. I hope the governor and Democrat leadership are willing to seriously consider our alternatives.”

Suggested cuts include:

• The elimination of patronage jobs at the Board of Public Utilities and the Sports and Exposition Authority which would save $5 million.
• Slash $150 million in funding increases to 11 Abbott and Rim School Districts under the new school funding formula.
• Cuts to the $150 million “distressed cities” aid.
• Immediately cease and desist requesting the service of dozens of over-priced lawyers from Skadden, Arps, Slate, Meagher and Flomto who are working on the governor’s toll plan for a savings of $5 million.

Addiego and Rudder, both R-Burlington, said they oppose the governor’s efforts to eliminate the property tax rebate program for some homeowners. Instead, they suggested cuts to wasteful or unnecessary spending programs. They also cautioned the governor and Democrats to make the spending cuts permanent.

“We have yet to see a February budget that is the same as the budget that gets passed in June or July,” stated Rudder. “Governor Corzine must stand firm on cutting spending and resist pressure from his party to restore this spending.”

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February 26, 2008

ANGELINI, RIBLE STATEMENT ON GOVERNOR’S BUDGET PROPOSAL

Assemblywoman Mary Pat Angelini and Assemblyman David Rible, both R-Monmouth, issued the following statement today on Governor Jon Corzine’s proposed Fiscal Year 2008/2009 state budget:

"Although we have not yet seen the details of the governor’s proposed budget cuts, we believe his proposal today is a step forward,” said Angelini. “The idea of a budget that calls for cuts in state spending is one that Republicans strongly embrace. Our concern is whether there is a commitment to this type of fiscal austerity beyond this year because another one-shot gimmick won’t do. The people of New Jersey have had enough of lip service for the past six years. It’s time for bold, but responsible cuts and we are willing to work with Governor Corzine to that end.”

“As we well know, New Jersey has become unaffordable for the middle class and some of the governor’s ill-advised cuts, such as those to the state’s property tax rebate program, will only make matters worse,” said Rible. “We also know past budgets have been filled with frivolous spending. It’s time to eliminate wasteful and unnecessary spending programs now and in the future by instituting fundamental structural budget reforms and that is what we will propose going forward.”

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February 26, 2008

MALONE: ALL CUTS MUST BE ON THE TABLE
WILL WORK CLOSELY WITH GOVERNOR ON REDUCING THE SIZE OF THE STATE BUDGET

Assembly Republican Budget Officer Joseph Malone today said Governor Jon Corzine has set the ball rolling on a budget that can put an end to Trenton’s recent spending spree and that he is prepared to work with Corzine toward the goal of reducing the size of the state budget.

“Every spending cut must be on the table, and the Governor must stick to his guns and not back off of his plan to reduce the size of the state budget,” said Malone, R-Burlington, Monmouth, Ocean and Mercer. “After six years of $11 billion in new spending, we are finally approaching a budget by asking what can we cut instead of where can we add spending. That is a move in the right direction.”

Governor Corzine today proposed a budget that includes some significant spending cuts. Some of those cuts were part of a package of $2.2 billion in spending cuts proposed by Republicans in 2006.

Malone said that Republicans may propose additional areas for spending cuts greater than the Governor’s proposed cuts. He cautioned the Legislature should not try to manipulate the budget in a way that will undermine the firm budget cutting stand the Governor is proposing.

“We have now reached a point where we have no choice but to cut spending,” Malone said. “While there will certainly be changes to the budget between now and June, we cannot afford to put more spending into this budget. Unlike prior years where last minute pork was placed in the budget, this year the Legislature must resist the temptation to add spending at the 11th hour.”

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February 26, 2008

O’SCANLON ON BUDGET PROPOSAL: LETS START CUTTING
PLENTY OF TIME TO FIND ADDITIONAL SPENDING CUTS

Assemblyman Declan O’Scanlon, a member of the Assembly Budget Committee, issued the following statement today after Governor Jon Corzine’s budget address to the Legislature:

“After years of runaway spending in Trenton, the time has come to begin cutting back. Governor Corzine’s speech today represents a much delayed realization that the state cannot continue to spend the way it has over the past six years. Better late than never.

“Today will begin the long process of studying our state budget and determining where we can afford to cut back. This is a challenge that I am excited to take on and I will do my best to make sure we are successful in this cost-cutting mission.

“I will use my position on the budget committee to thoroughly review state spending and to propose ways that we can get our fiscal house in order. If the Governor is sincere about cutting spending, he will be adopting a platform that we in the 12th District campaigned on last year. When I was campaigning for office I made the elimination of wasteful government spending a top priority and I am looking forward to the opportunity to fulfill that promise.”

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February 26, 2008

KARROW SAYS THE TIME HAS COME TO GET STATE SPENDING UNDER CONTROL IN TRENTON
PLENTY OF TIME TO FIND ADDITIONAL SPENDING CUTS

Assemblywoman Marcia Karrow, a member of the Assembly Budget Committee, issued the following statement today after Governor Jon Corzine’s budget address to the Legislature:

“One thing that should now be clear to everyone is that the time has come for the state of New Jersey to cut spending. For the past six years Trenton has spent taxpayer dollars with reckless abandon. $11 billion of new spending in six years is outrageous, and as has now been proven, it is not sustainable.

“Today’s budget address shows that the Governor is finally starting to get that message, but we must remember how we got into this mess. For the past six years, the Democrat leadership ignored Republican pleas for spending cuts and fiscal restraint. Now they are backed into a corner and they have no choice but to make cuts.

“As a member of the budget committee I intend to study this budget proposal closely and spend the next four months working to find additional areas where we can cut spending.

“No matter what happens between now and the end of this process in June, we must remain firmly committed to a budget that reduces spending. If the Governor and the Democrats in the Legislature begin to back away from that commitment, it will have devastating consequences.”

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February 26, 2008

McHOSE: GOVERNOR’S SPEECH PROVIDES STARTING POINT FOR SERIOUS DISCUSSION OF SPENDING CUTS
BUDGET MAY NEED SOME FINE TUNING, BUT THERE SHOULD BE NO COMPROMISE ON REDUCING SPENDING

Assemblywoman Alison Littell McHose, a member of the Assembly Budget Committee, issued the following statement today in response to Governor Jon Corzine’s Fiscal Year 2009 budget proposal:

“I intend to study the Governor’s budget proposal and make an informed decision about what I can and cannot support. I believe there will need to be some changes to this budget before it is adopted, but the one issue on which we cannot compromise is the need to reduce state spending.

“Republicans on the budget committee will work with the Governor and our Democrat colleagues to make sure we pass a budget that actually cuts government spending and sets our state on the path to fiscal recovery. This may mean proposing additional spending cuts as well as offering alternatives to some of the Governor’s proposed cuts.

“Today starts the budget process and there is a long way to go until June. We must make sure we don’t lose focus of our goal to cut spending during that time.”

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February 26, 2008

DeCROCE: SPENDING CUTS MUST STICK
REDUCTION IN SIZE OF THE STATE BUDGET IS THE RIGHT DECISION, BUT LEGISLATURE MUST NOT ADD MORE SPENDING

Assembly Republican Leader Alex DeCroce today issued the following statement in response to Governor Jon Corzine’s Fiscal Year 2009 budget proposal:

Finally it appears that Governor Corzine has heard what the taxpayers have been saying for six years and is willing to cut spending. The solution to our state’s fiscal problems is not to spend more, tax more and borrow more. It is to eliminate wasteful and unnecessary spending.

“The Governor’s proposed spending cuts are a starting point, but there is more work that needs to be done. We need to look for additional areas where we can reduce spending and we may propose alternatives to some of the Governor’s cuts. One area where we do not agree with the Governor is on his plan to cut back on property tax rebates. Property tax relief must remain a priority and we cannot support a reduction in direct property tax relief. All other cuts must be on table for discussion.

“As the budget process unfolds we will work with the Governor to produce a budget that does reduce spending. We hope that the Democrats in the Legislature will not undo what the Governor has begun by adding spending to this budget before it is approved.” 

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February 26, 2008

CASAGRANDE: CORZINE MOVE TO CUT THE BUDGET IS A GOOD STEP, BUT CUTS MUST BE TARGETED
WILL WORK TO IDENTIFY ADDITIONAL CUTS AND SOME ALTERNATIVES TO THE GOVERNOR’S PROPOSAL

Assemblywoman Caroline Casagrande today said that while she will likely support many of the spending cuts being proposed by Governor Corzine’s she believes that there are a few areas of state spending that might be more appropriately targeted for cuts than some of those proposed by the governor.

“I am glad that we are finally having a budget discussion in this state that revolves around the question of where we should cut spending, instead of whether we should cut spending,” said Casagrande, R-Monmouth and Mercer. “I am fully prepared to work with the Governor toward implementing many of his spending cuts, but there are others for which we will need to find alternatives.”

Casagrande noted that while the Governor has proposed some of the $2.2 billion in spending cuts proposed by Republicans two years ago, he has not embraced all of those cuts. She said that some of those previously proposed cuts would make more sense than eliminating property tax relief for 156,000 New Jersey homeowners.

“Eliminating property tax rebates for that many homeowners is not a spending cut, it is a tax hike, and I cannot support that proposal,” Casagrande said. “Additionally, some of the other reductions proposed by the Governor miss the target and could be replaced by cuts to wasteful or unnecessary spending programs that are far more worthy of being slashed. The Governor’s cuts should be fair and not targeted at suburban and rural taxpayers in order to protect his political allies in urban areas.”

“We need to cut spending, and while the Governor has provided us with a good starting point for that effort, I think we can do better,” Casagrande said. “We all know that the budget introduced in February rarely matches the budget we see approved in June. This is a long process and today is just the beginning.”           

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February 25, 2008