Last year, when then primary candiate Christie locked horns with Steve Lonegan in their frst debate, I remember being impressed with his speaking ability. Today was no different. For his first speech in front of a Joint Session (outside of his Inaugural speech), Christie was in command, spoke forthrightly about the state’s problems and generally came across as a strong leader. His style is in clear contrast to our ex-Governor’s which smacked of being at a boring college lecture. If nothing else, Mr. Christie is more compelling to listen to.

At times, I wondered if some of his remarks and his presentation would be perceived to be too forceful to those on the “other side”, but that did not appear to be the case. So, kudos to Mr. Christie for a well-delivered address.

Throughout the course of the address, for the first time Mr. Christie began to give us the specifics that were missing from his campaign. With the state facing a current $2B budget gap, delivering some specifics was, of course, a necessity.

Many of the governor’s proposal are good ones. First, there was a spending freeze on various programs including “InvestNJ” and the “main street” program, to save some $550M. Christie also pointed to “over a billion dollars in reductions and reforms” via reductions to other programs like the NJ Transit subsidy.

So far, so good.

Next, Christie took on the critical issue of pension reform – a reform that is an absolute must in my view. In fact, one of the highlights of today’s speech was when Governor Christie used the example of two government workers, explained how much they paid into the system and how much they received in benefits.

One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?

A retired teacher paid $62,000 towards her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it “fair” for all of us and our children to have to pay for this excess?

Hard to argue against reforming the system when presented with these two compelling examples.

Mr. Christie was very firm about reforming the pension system, urged the legislature to further strengthen their reform bills and promised he would sign such a bill if it reached his desk.  

It should be noted, however, that during the campaign, Mr. Christie proposed moving away from a defined benefit to a defined contribution retirement program for government workers. As they say, the devil is in the details and it remains to be seen if pensions are replaced with 401k’s.

Now the bad part.

The governor is planning to help plug the budget hole by using the surpluses of various school districts across the state – to the tune of $475M.

Many school districts in New Jersey have surpluses that were not a part of their fiscal year 2010 budgets. This is because they were either not anticipated – so called excess surpluses – or were placed in a reserve account – so called reserve surpluses.

I am reducing school aid in a way that ensures that no district will have aid withheld in an amount that is greater than its surpluses.

To some, an across the board reduction of a fixed percentage of school aid may seem more fair. But because some districts rely so heavily on state aid, this may affect their ability to provide the required thorough and efficient education to their students. And this approach would likely throw some districts into a deficit situation. We have not reduced school aid with an axe—we have done it with a scalpel and with great care.

The total amount of aid to be withheld is $475 million. I know this solution will not be popular. More than 500 school districts will be affected, and more than 100 districts will lose all state aid for the remainder of the year.

Now, the governor couched this proposal with rhetoric of no tax increases, no pain for students and shared sacrifice. But the fact of the matter is this raid on the surpluses of well-run districts is nothing less than wealth redistribution and punishment for those districts being more fiscally responsible.

The only sacrifice that is going on when these surpluses are used is by suburban and rural taxpayers who are being asked to continue propping up the failing schools in places like Camden.

The governor’s proposal on state aid is essentially a one-shot gimmick that would make Jon Corzine envious. Keep in mind, these surpluses are used by these school districts for, among other things, replacing boilers and repairing roofs. Where will the money come from when they need to address such things?

Raiding these surpluses is not real change – it is more of the same – avoiding the tough choices at the expense of taxpayers. And it also sends a terrible message that these well-run districts should spend their surpluses, or risk the state pilfering them.

For what was otherwise a good speech with commendable steps for tackling the budget deficit, the state aid proposal puts a real damper on it and I hope the governor reconsiders while he still can.

See the text of Christie’s speech here.

The opinions in this post are my own and in no way reflect the views of Americans for Prosperity.

Assemblyman Dave Rible, R-Monmouth and a member of the Law and Public Safety Committee, said the four bills heard before the committee aimed at stemming New Jersey’s recidivism rate will increase costs to government at a time when the state can least afford it.  The bills, sponsored by Assemblywoman Bonnie Watson Coleman, D-Mercer, were released from committee today.

            “While the public policy to rehabilitate those who are incarcerated is laudable, the fiscal impact of the bills we heard today is something we cannot afford,” said Rible.  “The additional costs incurred from implementing an in-service training program for corrections officers or eliminating charges for inmates using the telephone are examples of expenses government cannot absorb. 

            “The public spoke loud and clear earlier this month, telling elected officials things must change in Trenton when it comes to spending,” Rible stated.  “The proposals made today will add to our fiscal problems.

            “The additional expense incurred by the parole board by expanding eligibility will result in significant cost increases and stretch the resources of that department,” continued Rible.  “At a time when our state will be facing at least an $8 billion budget deficit, proposals that result in additional costs to the state should be non-starters. 

            “We need to break away from the fiscal model that spends without regard to the financial impact,” said Rible.  “We need to freeze spending and get our finances in order. These bills will only add to the taxpayer’s burden.”

            Rible pointed out that the 2009 State Commission of Investigation report, “Gangland Behind Bars,” indicated that gang activity is being funded through inmate accounts, and that one of today’s bills, A-4199, would make it easier for those accounts to be supported.  

            Highlights of the package of bills considered include the following 

1. A-4197 –  eliminates inmate phone service charges to the incarcerated, thereby reducing state revenue (currently $4.8 million annually); creates a commission to examine strategies for strengthening the family bond between children and incarcerated parents and removes the requirement that individuals convicted of drug crimes enroll in a drug treatment program in order to receive food stamp benefits. 
2. A-4199 – requires the Department of Corrections (DOC) to work with the Police Training Commission to develop and implement an in-service training program for corrections officers that is to include a component on mental health sensitivity and cultural awareness.  The estimated cost for this program is approximately $13 million. 
3. A-4201 – requires the Commissioner of Corrections to appoint a Coordinator for Reentry and Rehabilitative Services who will disseminate information to inmates on organizations and programs that provide services to inmates reentering society; requires the DOC to establish a consumer checking account for the inmate 30 days prior to their release and creates an 18 member Re-entry Commission to study and offer solutions to problems facing prisoners reentering society.  The commission would consider expanding Medicaid eligibility to non-disabled adults and whether health care resources are adequate for former prisoners.
4. A-4202 – provides for expanded parole eligibility, creating a six month period of post-release supervision, by releasing inmates whose sentences are set to expire.  An inmate who has declined to participate in the parole hearing process or has been denied parole would be released on a date which precedes the date which the court’s imposed term of incarceration was scheduled to end by six months.

Yes, that’s right. $18M so those poor inmates no longer have to pay for their own phone calls and to make sure our corrections officers get mental health sensitivity and cultural awareness training. Then top it off by opening up the ex-cons a checking account and putting them on Medicaid. 

Truly unbelievable. I hope Mr. Christie has already bought himself a veto pen. He’s going to need to use it often.

[UPDATE] By the way, doesn’t Mrs. Watson Coleman have a conflict of interest here? Why is she on the Law and Public Safety Committee making decisions that affect inmates when two of her own sons are convicted felons?

Cross-posted at Red County and CMNJ.

Politically, Christie is going to be under tremendous pressure to follow through and cut taxes. The suffocating tax climate in New Jersey is one of the main reasons he was elected and property taxes were the top issue for New Jersey voters this year. Further, according to some recent polling, voters are expecting Christie to cut taxes in his first year.

The signals, though, that Christie will follow through on property tax relief so far aren’t promising.

First, Christie has shown no inclination to do anything at all about the unfair school funding formula in the state. As we witnessed during the primary with Steve Lonegan, Mr. Christie does not support changing the formula to a per pupil basis which would result in a 20% cut in property taxes.

In a column last week by Paul Mulshine, he explained that Christie is not only opposed to increasing state aid to suburban towns like Toms River, but that he also opposes ending mandates like binding arbitration: 

No sooner were the votes counted than he was telling suburban voters they’re out of luck if they thought he was going to help them with their property tax bills.

That happened last week when he met with several Ocean County mayors in my old home town of Toms River. Christie scored his biggest wins in Toms River and adjacent Brick Township, which together gave him 38,000 votes toward his 100,000-vote margin of victory. The mayors of those and other towns asked him if he will deliver badly needed state aid to their towns.

“I’m not going to give Newark’s money to Toms River,’’ Christie told them.

The mayors then proceeded to tell the governor-elect that if they won’t be getting more state aid, then at least they need to be relieved of state mandates. The most costly such mandate is binding arbitration of labor disputes. The arbitrators routinely award raises that can add up to double the current cap on tax hikes, which is 4 percent.

I discussed this yesterday with Manchester Township Mayor Michael Fressola, who was at the meeting. Fressola said the police in his town now earn an average of $94,000. In the absence of state aid, homeowners have to pick up that tab.

“That’s why we were asking him to get rid of a lot of the mandates,” said Fressola. “That would in effect be the same as more state aid.”

It would indeed, but McGreevey’s response to the mayors was: “I can’t see eliminating binding arbitration.”

I’m sorry, did I say “McGreevey”? I meant “Christie.” Pro-taxpayer before the election, pro-union afterward. It’s hard to tell the two apart.

This leaves the property tax gimmick. Christie won’t be able to deliver on his promise to first, restore, then increase the rebates without borrowing or increasing the income tax which funds the rebates. Again, either more debt and fiscal peril or, on the other hand, broken campaign promises.

Herein lies the problem that so many conservatives had with Mr. Christie throughout the campaign. Yes, there was a lack of specifics, but there was also a more overriding doubt that he would have the political will and courage to address the serious structural problems with the budget.

Today, Mr. Christie is meeting with his transition team to discuss taxes. It will be interesting to see what other signals come from this meeting. Will he show any more willingness than he has to date to address the aforementioned issues? Or will we hear more generalities and platitudes?

For Mr. Christie’s sake I hope it is the former and not the latter. For if he ultimately fails to deliver on real property tax relief I believe it will to his own political peril. The people who voted for Mr. Christie are expecting no less and they will surely hold him accountable four years from now.  

The time is now for bold leadership on this issue and the state’s finances in general - not timidity and sleight of hand.

[ON EDIT] And on cue: NJ Budget May Be Worse Than Thought: Christie

Cross-posted at Red County and CMNJ.

Gov. Jon Corzine announced a scheduled vote today on the state’s $28.6 billion budget has been postponed after the state got at least a $400 million windfall from its tax amnesty program.

Corzine said he wants the extra money to be used on “much-needed property tax relief.”

Corzine said new figures show the tax amnesty brought in $600 million so far. State officials had anticipated $200 million.

“We expected to pass the budget today,” Corzine said at a Statehouse news conference. “This extraordinary development must be appropriately considered by the Legislature.”

The Democratic governor said both budget committees will vote on a revised spending plan on Monday, with final votes in the Senate and Assembly a week from today.

Corzine was clear on where he wanted the new money spent, saying “in the strongest possible terms,” that it should “provide middle class homeowners with much-needed property tax relief…”

He stressed that as the budget gap widened because of the economy, the last thing he cut from the proposed budget were tax rebates.

“Now that we’ve recovered some lost revenues, the first thing we will restore is some property tax relief,” Corzine said.

Cross-posted at Red County and Conservatives with Attitude!

“Oink!, Oink!”: Corzine uses Bergen taxpayers as personal piggy bankBy Matt Mowers

Hillsdale – Responding to Governor Jon Corzine and the Democrat state legislature’s proposed FY2010 budget plan to eliminate the property tax rebate and the property tax deduction on middle class families, Assemblywoman Charlotte Vandervalk and candidate for Assembly Bob Schroeder released the following statement: 

“I will proudly vote for Bergen County taxpayers by opposing Jon Corzine’s reckless budget. The Governor’s budget wastes our tax dollars to pay for political patronage and special interest contracts.  Middle-class taxpayers are at the breaking point and this budget could well put them over the edge,” said Assemblywoman Charlotte Vandervalk. 

Bob Schroeder, a Councilman in Washington Township and Hillsdale businessman added, “This is the eighth year in a row in which the budget contains new taxes, fiscally unsound debt practices and one-shot budget maneuvers. Jon Corzine is using Bergen County taxpayers as his personal piggy bank to pay for bureaucrats’ spending projects and political patronage. If I ran my business the way Jon Corzine runs New Jersey, we would go bankrupt every year.” 

Governor Corzine and the Democratic-controlled legislature have proposed eliminating the property tax deduction on families who earn $150,000 or more, eliminating the property tax homestead rebate for nearly all homeowners, and settled on a sweetheart deal which prevents any layoffs of taxpayer-funded state employees – a group whose representative unions have provided unwavering support for the Governor and are expected to again in this year’s campaign.  

 “The Governor’s budget plan would be especially devastating to the taxpayers of the 39th Legislative District.  Rather than face the real issues, Governor Corzine has decided to borrow, tax, and spend his way through the 2010 fiscal year for his own political benefit and without any long term budget solutions,” stated Vandervalk. 

“The Governor refuses to admit what all taxpayers know: that New Jersey has fundamental budget problems that will not be fixed by gimmicks and political grandstanding,” said Bob Schroeder.  “It is time we put New Jersey on a path toward fiscal sanity. Together, Assemblywoman Vandervalk and I will work with members of both political parties to bring fiscal responsibility back to New Jersey and finally deliver relief to taxpayers.” 

Bergen County remains a key battleground in the upcoming gubernatorial election. It will also be important for Republicans to maintain the D-39 seats in Bergen County if they stand any chance of capturing the Assembly.

Cross-posted at Red County.

A Partial List of ‘Governor Deficit’s’ Time Bombs for Taxpayers

Republican Senate Budget Officer Anthony Bucco warned that passage of Governor Corzine’s 2010 budget will pave the way for the worst budget crisis in state history. Effects of this crisis will be felt for years, Bucco predicted.

“New Jersey state government will face the worst, most devastating fiscal crisis in its modern history starting next year,” Senator Bucco said. “To create the illusion of a lower budget, Governor Corzine has deferred billions of dollars in expenses that will create unprecedented deficits. We should not approve this fiscally irresponsible legislation.”

“Governor Deficit’s” time bombs for taxpayers include:

· The Corzine Pension Deficit – Governor Corzine’s budgets have underfunded the pensions off teachers, police officers, and other government employees. The total during his administration, including for fiscal 2010: More than $7.5 billion. This includes $6.5 billion in unpaid state contributions, and incredibly irresponsible legislation this year that allows municipalities to defer more than $1 billion in payments to the funds.

· The Corzine Federal Aid Deficit – Governor Corzine has relied on $2.2 billion in one-time federal stimulus aid to create the illusion he is cutting that much in spending. He didn’t cut this spending. He merely used federal aid to pay state bills. Next year, that federal money will not be available. The governor hasn’t provided an answer on how he will fill this $2.2 billion addition to next year’s deficit

· The Corzine ‘Temporary’ Tax Deficit – The governor is relying on more than $1 billion in tax increases this year that he is labeling “temporary.” He is raising the income tax and eliminating the deductibility of property taxes for many middle class residents. Again, the governor hasn’t told legislators what he plans, if anything, to eliminate this $1 billion hole next year.

· The Corzine Property Tax Rebate Deficit — More than 1.7 million New Jersey homeowners who got rebates in the past will not get them. The governor says the cancellation of rebates is temporary. He doesn’t say where he will find the $1 billion needed to restore them.

· The Corzine Unemployment Fund Deficit – Governor Corzine will borrow $1.6 billion from the federal government because of past raids on the unemployment benefit fund. He has no announced plan for how he will pay this loan back.

· The Corzine Debt Service Deficit – The governor will skip $450 million of payments on bonds next year. He hasn’t said one word on how much extra this will cost taxpayers over the long haul, or where he intends to find the money to pay for the borrowing in the future.

· The Corzine Biden Buyoff Deficit – The governor has promised a 7 percent pay increase to state workers, half that will come 12 months from now and the other half in 18 months. This will cost the state $350 million. Again, the Governor has committed to a plan that will cost taxpayers for decades without finding a way to pay for the expense.

Of course, it would be nice if lawmakers could actually see a finished product of the budget before voting on it. So, much for the transparency Corzine promised us as well.

(h/t Alice’s Restaurant Blog)

Cross-posted at Red County.

Of the almost $30 million, Milgram spokesman David Wald said most of the money, $13.4 million, will go directly to law enforcement efforts like anti-gun and gang initiatives. Another $5.7 million is for prevention programs like counseling, $4.6 million will be spent in an effort to reduce the number of ex-offenders returning to prison, and $5 million is earmarked for information systems, such as automated fingerprint technology.

I thought the stimulus was supposed to create jobs and boost an ailing economy? How does any of this create a single job?

If the Governor had an ounce of care for New Jersey’s taxpayers he’d be using this money to keep property taxes in check. Instead, in the face of the worsening budget situation, elimination of the Homestead rebate and the property tax reduction, as well as state aid to towns remain directly in Corzine’s crosshairs.

TRENTON, N.J. – Even politically popular programs like property tax rebates and education spending could fall victim to New Jersey budget cuts as Gov. Jon S. Corzine and lawmakers look for ways fill an ever-deepening revenue hole.

The Democratic governor isn’t yet saying where he’ll propose the cuts, but lawmakers point to a few places as the most obvious: state aid to towns and cities and proposed education spending increases, as well as eliminating property tax rebates and property tax deductions.

Essentially, this will be a triple whammy on New Jersey taxpayers and homeowners, as cuts to state aid will cause towns to ask us to pony up even more. It will hardly be stimulating when strapped New Jersey taxpayers have to fork over thousands more because Corzine refuses to make the tough choices to cut government.

Honestly, it’s amazing to me this Governor is even in the 30% range when it comes to his re-elect numbers. The man is completely detached from reality and cares not a whit about how the middle class is being suffocated in this state.

Cross-posted at Conservatives with Attitude! and Red County.

MONROE — Gov. Jon S. Corzine will soon drop another budget bombshell as a “frightening” revenue shortfall imperils the state’s spending plans, New Jersey Chief Counsel William J. Castner Jr. said this morning.

Reduced sales tax collections and other revenue retreats driven by the weak economy already spurred Corzine to propose spending cuts and tax hikes, but the latest projections indicate the state’s revenue flow will shrivel even more.

“The governor will likely make a formal announcement [about further budget revisions] soon,” said Castner, who addressed about 50 business owners today at a New Jersey Chamber of Commerce breakfast held at Forsgate Country Club. “The revenue numbers that are coming down the pike are frightening, and all options will be on the table.”

He declined to detail the latest revenue shortfall, but Castner did say the state is “committed” to spending cuts and to taking other steps to rein in the budget, which currently stands at $29.8 billion.

The plan for the year beginning July 1 already shaves about $3 billion from the current budget — but increases employer payroll taxes, suspends property tax rebates for households making more than $75,000 and institutes a one-year income tax increase on individuals making more than $500,000.

“We’re aware of the financial challenges facing the state, but we don’t want to see the administration raise taxes and plug the budget gap on the backs of business owners,” said Jim Leonard, legislative lobbyist for the New Jersey Chamber of Commerce.

“Businesses are already facing tax hikes in the form of increased state unemployment insurance and the loss of the personal property tax deduction,” which may be used by sole proprietors, limited-liability partnerships and other business structures, he said. “We would like to see a re-evaluation of all budget programs. Nothing should be exempt” from possible spending cuts.

So, here’s the bottom line. New Jersey taxpayers are tapped out. The well has run dry and we can’t afford what Corzine wants. And it’s time for him to face reality and cut the size and scope of our state government.

Of course, I will not be holding my breath. Castner’s statement that ”all options will be on the table” tells us all we need to know – Corzine will continue to stick it to the New Jersey taxpayer while protecting his precious government workers. Unfortunately, this is about the only thing NJ taxpayers will be able to take the bank.

{UPDATE} Budget is another $1.5B-$2B short

Cross-posted at Conservatives with Attitude! and Red County.

Mayor Bloomberg is threatening to lay off up to 7,000 city workers, saying municipal unions and state officials haven’t done enough to help New York balance its budget.

Budget Director Mark Page told agency heads Wednesday to cut $350 million from their budgets, saying previous cuts of $3.1 billion starting July 1 weren’t enough.

“This next step would most likely rely heavily on additional head count reductions, whether through attrition or, as is more likely, through layoffs,” Page wrote.

“It is expected that these savings could result in a reduction of as many as 7,000 positions citywide.”

Bloomberg’s press team refused to discuss the letter.

“While it’s a letter addressed to the agency heads, it’s a message being sent to the union leaders,” said Charles Brecher of the Citizens Budget Commission, “and to a certain extent the state Legislature.”

The mayor has asked municipal unions to pay for 10% of their health care costs and find additional health cost reductions to save $557 million and avoid layoffs.

An analysis released yesterday on the proposed budget predicts tax collections will come up $605 million short of what’s needed to cover the remainder of the current budget year and the new one that begins in July.

If this latest revenue estimate holds true, the shortfall would eat up the $500 million in surplus Corzine has built into his proposed budget and require $105 million in new cuts or tax increases since the state constitution mandates a balanced budget.

“The small, projected year-end balance would be transformed into a deficit,” said David Rosen, budget officer for the nonpartisan Office of Legislative Services.

Rosen said new tax data the governor did not have when he presented his budget six weeks ago indicates revenue collections will come up $383 million short of Corzine’s projections for the budget year that ends in June. Corzine’s budget will be another $222 million short for the fiscal year that begins in July, he said.

“There aren’t a whole lot of options,” he said.

Of course, not “a whole lot of options” in liberal-speak means more tax increases are right around the corner. If one thing is profoundly clear at this point, it’s that the Democratic machine in New Jersey is in denial and refuses to take the necessary steps to cut the size and scope of our bloated State government.

Corzine’s budget proposals do nothing of the sort. In fact, as detailed in an article in yesterday’s Asbury Park Press, Corzine’s budget is chocked with gimmicks and “one-shots.”

Corzine’s claim that his proposed budget spends only $29.8 billion is fiction. The claim disguises the fact that he cut more than $2 billion from current spending only to reinstate the cuts by using an equal amount of temporary federal aid. The federal aid and the spending it supports, however, do not appear in the proposed budget. In reality, Corzine’s proposed spending plan totals at least $31.9 billion.

The federal money, however, won’t be available for the next budget. This use of federal aid rivals the notorious one-shot gimmicks of the McGreevey years.

Half of the federal money will be used to replace a $1 billion cut Corzine has made to state aid to local school districts. If that fiscal wizardry wasn’t bad enough, Corzine also used the federal money to increase aid to some school districts. At a time when state revenues can’t support the existing aid formula, Corzine recklessly used one-shot revenues to extend the state’s aid obligation to some school districts.

While the federal aid is the largest of the one-shots, it’s not the only one. Corzine proposed tax increases totaling more than $900 million, but they are structured to be available for one year only. One-year tax increases are better than permanent tax increases, but they will create a large gap that must be filled next year.

And he’s proposed to raid numerous special purpose funds for more than $100 million. The raids probably can’t be continued in the next budget. In total, more than $3 billion in revenues in Corzine’s spending plan won’t be available for the fiscal year 2011 budget.

His so-called spending cuts don’t withstand scrutiny either. The single largest “cut” reduced by $900 million the state’s contribution to the several public employee pension systems. But this money is owed to the pension funds whether or not it’s paid in the next budget. Corzine isn’t reducing actual spending, but rather deferring a financial obligation to the future.

A few words come to mind regarding Governor Corzine’s approach to managing the state’s pension obligations: shameful, reckless and irresponsible being the foremost in my mind. I’ve posted regarding Corzine’s pension deferral scheme earlier this year, but now the situation looks to be even more dire. In order to pay for the state’s growing pension obligations, Democrats are seeking to fund the system by buying toxic assets – the very same approach that led to the collapse of firms like Bear Stearns. I recommend that you read this article and this blog post on the subject at Red Alerts.

Just like the donkey that symbolizes their part, Corzine and the Democrats are stubbornly refusing to deal with reality. We can’t continue the way we are going. The money isn’t there. We need to drastically cut government and government spending. That is the only solution to fix our mess. Unfortunately, instead of putting the breaks on this runaway train as it is about to run off the tracks, Governor Corzine and the Democrats are speeding it up and leading New Jersey toward economic ruin.

Cross-posted at Conservatives with Attitude! and Red County.