Garden State Patriot

Looks like even more pain ahead for New Jersey taxpayers. According to an article in the Star-ledger, Governor Corzine will need to cut another $105M for next year’s budget.

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.

Looks like Governor Corzine only likes guns when he can hold them to Republican’s heads. And that’s exactly what he’s trying to do in order to get his destructive pension gimmick passed.

Here is the press release from Ass. Addiego and Ass. Rudder:

Assemblywoman Dawn Marie Addiego, R-Burlington, and Assemblyman Scott Rudder, R-Burlington, today voiced their strong objections to Governor Corzine’s comments that $75 million in school aid would not be restored during the current year if the Legislature did not approve his proposal to permit school districts to defer making pension contributions.

“To hold schools hostage unless pension deferral legislation passes is fiscal blackmail,” stated Addiego.  “This is not a veiled threat.  The governor is ready to punish school districts and taxpayers if he does not get his way on this issue.  Republicans firmly believe that delaying mandated pension contributions is misguided public policy and we will not be coerced into voting for something that will have long-term implications on taxpayers and retirees.”

“The governor’s fiat on cutting school aid is deplorable,” remarked Rudder.  “If the reality is that the state withholds aid that was promised in the middle of the school year, then either taxpayers must make up for the shortfall or children suffer the consequences. 

“The governor should start to cut spending in areas like Special Municipal Aid instead of reneging on funding commitments to schools.  There is opposition on both sides of the aisle on delaying pension contributions.  It is shameful that our youth are being held as captives so that Governor Corzine can get what he wants,” concluded Rudder.

Cross-posted at Red County.

I’ve posted about Corzine’s proposed pension gimmick before – see here - but it’s worth reiterating what is going on here as the bill, S7, is now before the state legislature. No better way of doing that then with this video of Steve Lonegan and Fair Haven Mayor Halfacre. 

If you don’t want your property taxes to go even higher then it’s time to start contacting your representatives in the legislature and tell them NO.

Here is my latest post from Conservatives with Attitude!

Perhaps the best example of Governor Corzine’s failure to address the state’s serious financial condition is his proposal to allow towns and municipalities to defer on their pension obligations.

In a classic case of kicking the proverbial can down the road, Corzine is simply using a gimmick that will result in more pain for taxpayers in the future. Of course, when it comes time to pay the piper Corzine’s re-election bid will be very much in the rearview mirror.

Assemblyman Alex DeCroce:

“I’d like to think the governor would have learned by now that residents don’t want leaders to keep pushing off financial problems to the future,” said DeCroce, R-Morris and Passaic. “But a year after Corzine’s biggest blunder – proposing more borrowing with an 800 percent toll hike – he comes back with another attempt to stave off New Jersey’s day of reckoning instead of making a tough stand to fix the problem.”

DeCroce said he’s encouraged that some towns, such as Cherry Hill, have recognized the scheme will only exacerbate the taxpayers’ burden.

“I’m sure it’s tempting for a mayor to skip a payment when revenues are shrinking, property taxes are rising and Corzine’s only answer has been to cut municipal aid,” DeCroce said. “But skipping this payment will only set up taxpayers for colossal – even by New Jersey standards – property tax hikes.”

In a conference call with bloggers earlier this week, Assemblyman DeCroce indicated that the interest rate on these pension deferral payments would likely be about 8.25%, but could end up even higher. And the Senate Budget And Appropriations Committe statement on the bill indicates that “the full funding level for FY 2012 through FY 2041 [emphasis added] will be greater than it would otherwise be.” In other words, higher taxes as far as the eye can see.

Of course, this begs the question: why not just resist the pension deferral tempation (as Assemblyman DeCroce urges)? Well, in an elightening post on the matter @ MoreMonmouthMusings, Fair Haven Mayor Mike Halfacre explains why it’s not that simple:

In Fair Haven, as in most fiscally responsible small towns, we are not interested in his budget gimmicks. As a fiscally responsible elected official, I have no desire to kick the can down the road to 2012, in return for nothing in 2009.

Despite our sound fiscal policies, Corzine is trying to force towns to “take advantage” of pension deferral. Towns have four options for their pension:

1) Pay their share to the Division of Pensions, as per usual;
2) Pay their share to the separate Division of Investments and let the State invest it on our behalf;
3) Invest it ourselves;
4) Not pay it at all and therefore not raise it in the tax levy.
Under the first three scenarios, since the money is being raised anyway, there would be no property tax relief.

Under the fourth scenario, the money would not be raised, and would, technically, reduce the tax levy, thereby reducing property taxes.

However, under all four scenarios, the money must be paid back to the Division of Pensions, with interest, beginning in 2012.

Why would an otherwise fiscally responsible municipality take option 4? Two Words:
Cap Relief.

Governor Corzine, with an apparently genetic predisposition to “Do as I say, not as I do” imposed a 4% property tax cap on municipalities. (The State does not have to follow this rule, which is why the State budget has grown by double digits during his Administration) (As an aside, Fair Haven does not have a “Cap Problem”)

During his “State of the State” address, the Governor went out of his way to advise municipalities that there would be no flexibility in obtaining waivers from this cap, which is a change from prior years, when cap waivers were granted routinely.

Towns with “cap problems” will then be left with no choice: they can cut services, layoff employees, engage in other drastic budget measures, or defer their pension payments.

In other words, like Vito Corleone to Johnny Fontane, Don Corzine has made an offer to towns they can’t refuse.

Had enough yet fellow Jerseyans?

While most Americans place great value on education and are willing to spare no expense to provide children the best education possible, unfortunately many of these dollars are eaten up by education bureaucrats. Such is the case in New Jersey.

In an article published in yesterday’s Bergen Record, BCRO Finanace Chairman Joe Caruso exposes some of these outrageous salaries made by superintendents, administrators and other state education employees.

It’s time the average school district was forced to be as frugal with our tax money as the average family is with its money.

The fact that schools are forced to turn down the heat in classrooms, cut school trips, reduce programs, operate fully loaded buses and increase class sizes is not cause for hand-wringing. Rather it is to be celebrated as a heavy dose of financial reality that has been lacking for too long in New Jersey’s school system.

I attended a grammar school in Staten Island, where my class size was 28 to 32, depending on the year. My learning experience there was excellent and far less costly than public schools in New Jersey are today.

The school superintendent of the City of Passaic, Robert Holster, says that 80 percent of his budget goes toward staff, thereby making cost cutting difficult. If a private sector business ran with that much staff overhead, it would be out of business in no time.

In Passaic, according to information from the state Education Department’s Web site, it cost $15,860 to educate a child in 2007. Of that amount, $7,954 goes to teacher salaries and benefits and more than $1,000 to administration salaries and benefits. Only $310 goes to classroom books and supplies.

What’s wrong with this picture? Plenty.

Salaries

Let’s start with Holster’s salary: He earns $212,000 a year and his assistant superintendent makes $195,276. The business administrator makes $195,000 a year.

This is in a city of 67,000 people with a median household income of just $27,691. This is also a city that receives $200 million a year in state aid paid by people who don’t live in Passaic.

How can Holster justify his overpaid staff? He can’t and he’s never been asked to.

The top 36 administrators in the Bergen County Vocational High School are paid $3.9 million in salaries, not counting health benefits and pensions. Many of these are unnecessary or duplicate jobs that could be handled by the county (the school employs three people to handle grants writing).

Robert Aloia, who heads the Bergen County Vocational and Special Services District, makes $231,000 a year, plus $80,000 in other allowances; the assistant superintendent makes $181,000.

It’s no wonder that it costs taxpayers $24,000 to educate a single student at the vo-tech high school. And it costs $55,000 to provide educational services to a single student at the special services school. These numbers are staggering for taxpayers and unsustainable.

In Paramus, where the superintendent was bemoaning delayed computer purchases, the cost to educate a student at the high school is $14,729. Classroom salary and benefits represent $6,700 per student and administration salary and benefits are $1,220 per pupil — so nearly $8,000 of the per pupil costs, or 54.3 percent, are taken up by salaries.

Overall, eight administrators in Paramus make more than $100,000 and seven make more than $90,000.

While educators talk about increasing class size, none mentions cutting salaries or positions.

In district after district in New Jersey, you will find similarly outrageous salaries in a top-heavy bureaucracy that survives to perpetuate itself. And while the salaries are outrageous enough, keep in mind that the administrators and staff receive generous pension and health benefit packages.

Joe goes on to point out that the pensions made by these workers are, quite simply, ”bankrupting the state.”

In addition to these outrageous salaries and pensions, New Jersey taxpayer money is also being wasted by the state’s School’s Development Authority. In a post at Alice’s Restaurant Blog, Alice points out how the Authority is spending money to build new schools rather than simply renovating the one’s that are currently on site. She links to pictures of the school’s which show that they are actually in decent condition and hardly in need of being torn down and replaced with a completely new building.

Lastly, if you don’t think New Jersey’s education bureaucracy is too big, I’d also recommend this post from Alice which lists out every division in the New Jersey Department of Education. And, yes, it’s a long list.

As Mr. Caruso pointed out in his piece, it is time for New Jersey’s education bureaucracy to do more with less (particularly in these trying economic times). New Jersey taxpayers are already paying more than enough on education. These dollars need to be used more wisely and the bureaucracy itself needs to be trimmed down considerably.