The final installment of Matt Rooney’s interview is up at The Save Jersey Blog. In this last part, Matt asks Steve about public financing of campaigns, paid family leave and more. Check it out here.
The second installment of The Save Jersey Blog’s interview with Gubernatorial candidate Steve Lonegan is now up. In this part of the interview, Matt Rooney askes Steve his views on school choice, corruption in politics, his infamous arrest last MLK Day, among other topics. Click here to read the entire interview.
The first installment of Matt Rooney’s interview is up at The Save Jersey Blog. The discussion is wide-ranging, touching upon the state of New Jersey’s economy, why the GOP has become the minority party in this state and why Steve decided to run after losing in 2005.
Check it out - and check out the second installment on Wednesday.
Jim Gearhart of NJ 101.5 FM interviewed Steve yesterday. To listen to the interview, click here and scroll down the page a little.
Yesterday, Steve Lonegan formally announced his campaign for Governor. Watch Steve’s announcement here.
Also, Conservatives with Attitude! interviewed Steve following his announcement. You can listen to this interview here.
New Jersey’s fiscal woes are not only to be placed at the feet of Corzine, McGreevey and the state’s legislature (as well as Governor Whitman I might add). It should be noted that New Jersey also has a runaway Supreme Court which has time and again overstepped its constitutional authority and legislated from the bench.
Two of the Court’s most egregious decisions were handed down in what is known now as Lonegan I and Lonegan II. In those cases the NJ Supreme Court essentially turned the New Jersey constitution on its head and green-lighted runaway spending by the Governor and state legislature.
Here, Steve Lonegan summarizes the sequence of events and alerts New Jerseyans that it will likely take another law suit to undo the damage the court has unleashed on New Jersey taxpayers.
Just over five years ago, the New Jersey Supreme Court decided on two of the most important cases in the state’s fiscal history– Lonegan vs. State I 174 NJ 435 (2002) and Lonegan vs. State II 176 NJ 2 (2003).
A disappointing loss in Lonegan I allowed Republican Governor Whitman’s plan to borrow $8.6 billion without voter approval to construct schools in 28 urban districts as ordered by the Supreme Court in Abbot vs. Burke. The Supreme Court would not allow voters to reject something it had mandated, no matter how costly or destructive.
But the court claimed it was troubled by the method used to borrow money without voter approval as required by Article VIII of the NJ Constitution. A “shell entity,” also known as a straw man, the NJ Economic Development Authority, issued bonds to borrow the money—even though it had no income. Then the state made contracts to pay all obligations on those bonds with tax revenues for the next 30 years. The problem is that there is no guarantee that future payments will be made. These annual payments are subject to approval by the legislature and conceivably can be voted down. Most purchasers of this contract debt are not aware of this risk, but investment firms continue to sell these bonds as if they are risk free.
Supreme Court Justice Stein, writing in 2002, was alarmed that this gimmick had been used to borrow $10.8 billion, 75 percent of the state’s bonded debt, without voter approval. He urged the Court to agree with my assertion and end the practice.
But the Supreme Court delayed that part of the decision until after Justice Stein, clearly sympath et ic to my case, had reached the mandatory retirement age, and was replaced by Justice Albin, appointed by Governor McGreevey.
In Lonegan II, the Supreme Court in a heart breaking 4-3 decision approved all state borrowing for any purpose without voter approval—as long as a shell entity did the borrowing without pledging the full faith and credit of the state. In essence, the State Supreme Court is complicit in what could be the largest consumer fraud scheme by any state in the country-selling bonds as if they have been approved by voters.
The result has been an absolute financial catastrophe for New Jersey. In his 2008 State of the State Address, Corzine blamed Supreme Court decisions for “the sharp deterioration of our State’s finances,” which included $32 billion in bonded debt, only $3 billion of which was approved by voters. I agree with the Governor’s statements. But Governor Corzine’s actions do not follow his words. Six months after criticizing New Jersey ’s “credit card culture” that ignored our Constitution, Governor Corzine approved using the old gimmicks to borrow $3.9 billion more without voter approval.
There are other reasons to reconsider and overrule the previous Lonegan decisions. First, Lonegan II relied on bad history. It claimed that New Jersey’s 1844 Constitution, which first required voter approval of new state debt, was framed to prevent states from defaulting on debts backed by the “full faith and credit” of taxpayers.
However, many scholars today, like University of Maryland Professor of Economic History John Joseph Wallis, take a different view. They suggest that the 1844 framers wanted to end “systematic corruption” where politicians had too many opportunities to get bribes and political support by favoring some businesses at the expense of others. The framers of 1844 reduced those opportunities by requiring voter approval of new state debt. Other reforms in that 1844 Constitution time included uniform laws that took the politics out of forming new corporations and local governments.
Second, Lonegan II put way too much faith in Wall Street .
“(T)he state has responded to changes in the financial markets that reflect modern economic realities…yesterday’s speculation has become ‘sound and economical current business practice. . . “ Lonegan, supra, 176 NJ at 14.
In his October 23, 2008 testimony to Congress, Federal Reserve Chairman Alan Greenspan showed the framers of New Jersey’s Constitution to be far more reliable than today’s Wall Street “geniuses.”
“In recent decades, a vast risk management and pricing system has evolved, combining the best insights of mathematicians and finance experts. . . The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria. . .”Finally, last November 4, 2008, New Jersey voters approved amendments to Article VIII of New Jersey’s Constitution which prohibits this type of borrowing without voter approval. But this case is far from moot. The Amendment only applies to future borrowing.
Also, the new Amendment has this troublesome language, which did not appear in the ballot question:
“No voter approval shall be required for. . . refinancing of all or a portion of any outstanding debts or liabilities of. . . an autonomous public corporate entity…”Does that mean the state can refinance NJ’s $29 billion of old “contract debt” with new debt backed by the full faith and credit of the state—without voter approval? Future litigation may be needed to decide that issue. But in the meantime, there are many reasons to reconsider and reverse Lonegan I and Lonegan II, and the future fiscal health of New Jersey will rest on this decision.
Steve Lonegan
State Director
Americans For Prosperity
Additionally, today Steve Lonegan officially launched his candidacy for the governorship. As I mentioned in a previous post, I am currently supporting Steve’s candidacy. For more on his speech today, please see this post from Conservatives with Attitude!.
Next year’s New Jersey gubernatorial election will be a critical one for Republicans and conservatives. Coming off the disastrous 2008 election, the New Jersey Governor’s race will be in the spotlight. It represents a real opportunity to right the Republican ship and demonstrate to voters, once again, that we are the party of fiscal restraint.
However, as I canvass the media and the blogosphere, you would think U.S. Attorney Chris Christie were already the party’s nominee. Certainly, Christie has a solid record of fighting corruption in this state. But, as of now, there’s not much else we know about Christie. The fact that he seems to be the choice of the party establishment causes concern for this voter. The last thing we need is another Democrat-lite candidate who won’t be committed to making the real changes New Jersey needs.
Moreover, we are told by the ‘elites’ in New Jersey that a conservative can’t win in this deeply blue state. That may be so, but that is not an excuse for not giving the voters a real choice and nominating a serious candidate. Those in the media and the blogosphere who are propping up Christie are doing New Jersey and Republican voters a disservice in my opinion.
While I will be open to listening to Chris Christie or any other candidate who decides to run, at this time I will be supporting Steve Lonegan for Governor and would also urge you to support his candidacy (please see link on my sidebar). I have met Steve a few times now and I have read his book Putting Taxpayers First. His knowledge of the state is unmatched and he will be totally committed to putting us back on a sane course.
Steve will be formally announcing his run for Governor on Monday. He will need all the grassroots support he can at these early stages of the campaign. So, please check out his site and do what you can to support his candidacy.
