Corzine calls for budget cuts! A Step in the right direction.

From Bloomberg.com:

New Jersey Governor Jon Corzine directed state department heads last month to prepare to trim their budgets by 5 percent in the event revenue for the fiscal year falls short.

The fact that the Governor has finally weighed in is a good sign for New Jersey and out potential to avoid another massive tax increase because of the mortgage crisis. He should have been out in front of this. But it doesn't minimize the importance that he finally did.

New Jersey's budget for the fiscal year that began July 1 reduced spending by $600 million to cope with an expected drop in tax collections. The financial crisis goes beyond what the state planned for, Corzine said earlier this month. Democratic and Republican lawmakers have since called on the governor to consider mid-year cuts.

``The seriousness of these issues probably will require that what we began on August 20 as contingency plans will have to go forward,'' Corzine said. ``I don't think this is going to be an easy process, but it is a necessary one. We have the requirement to balance our budgets.''

Mr Governor. Cut now and cut big. This is an unprecedented crisis that will force New Jersey government to live within its means. The shore housing market is almost sure to collapse and if the entire state doesn't get serious, we will have a major problem. And while you are at it Mr Governor, just say no to the new borrowing you have planned for the corrupt Schools Construction Corporation. It will send a sign that you are serious.

Lead Mr Governor, lead.

Corzine Worried - State Finances in Trouble - Duh!

From today's Trentonian. apprently Jon Corzine is finally realizing that the state is in poor fiscal shape:

"I'm worried about the state budget, the state economy in the context of the very dramatic restructuring that is taking place on Wall Street," Corzine said Monday morning during an appearance in Ewing Township. "The northern half of the state, there are many, many people who are involved with that industry. That's one of the reasons you have high levels of income in the state."

This man along with his Democrat counterparts have continued to spend like drunken sailors on shore leave for three years. Since the Democrats took over starting with Governor "I am turning gay so I don't get indicted for corruption" McGreevey, the state has seen a continual downturn in jobs(except government and patronage jobs)ability to balance the budget and a massive increase in the local tax burden through property taxes. That trend has continued unabated during Corzine's tenure.

The party in power has always based their profligate spending on the fact that New Jersey wage earners will continue to make money in New York and bring it back. Well guess what? The party is over. Wall Street is in serious trouble. Corzine is wondering about Bank of American buying Merrill Lynch? To all Merrill employees - congratulations! North Carolina here you come!

I guess all that money this legislature just threw at the corrupt school construction corporation is looking like a great idea right now. One thing that is clear, after three years of Corzine, I now know why these firms are failing. Bear Stearns, Lehman, Merrill-their balance sheets look a lot like New Jersey's budgets.

Read the entire article here.

Give This Non-Profit More Profits!

What would you do with 7.7 million dollars?

Are your property and state taxes going up by 13%?

The questions are related, and you should be outraged.

Let's put ourselves in Governor Corzine's mindset by reading what he said in his Governor's Statement to the FY09 Budget (many links in this post are in PDF). Emphasis in this text block is mine, to highlight things I'll talk about later.

The $32.87 billion budget I signed today makes a clear turn towards long-term fiscal responsibility, rather than continuing the past practices of pushing tough budget choices off until the future.

The Fiscal Year (FY) 2009 budget makes an unprecedented cut of $600 million from the budget I signed last year, the largest absolute reduction in State history. It relies on nearly $3 billion of actions to reduce spending to offset the mandatory and inflationary growth in the budget in order to achieve the overall $600 million reduction.

This budget reduces the size and cost of government and allocates necessary reductions in a fair and equitable manner....

In February, when I delivered an austere budget message for Fiscal Year 2009, I stated that we were facing a structural gap of approximately $3.2 billion between our expected revenues...and our anticipated spending..., based on mandatory spending and inflationary increases....

In May, the State Treasurer updated the revenue and spending projections and announced an additional gap of approximately $200 million between spending and revenues. This increased structural gap again was closed primarily with spending reductions and adjustments to areas of the budget that were projected to increase. The most important of those new reductions came from our paydown of $650 million of debt, allowing a decrease of spending on debt service by $135 million.

This budget reduces the cost of State government by nearly $300 million...In this regard, the budget provides for a reduction in the operating funds for every Executive Branch department. Departmental budgets have been directly reduced by approximately $184 million, or by an average of about 5% each.

That $7.7MM I mentioned is .02% of the total budget, or 0.24% of the expected gap in revenues.

It's 1% of the $650MM debt paydown, and 5.7% of the amount that we pay just to service our debt.

It's 2.6% of the $300MM that Corzine cut out of the state budget, and 4% of the departmental budget cuts.

What if you really wanted to spend the $7.7MM instead of using it to be fiscally responsible by paying down debt?

Well, despite the Governor's claims of austerity, there are places in the budget with net increases. He says that the budget "protects vital programs" such as "property tax relief and school funding" and "vital programs that improve public safety, protect vulnerable citizens, and otherwise meet the needs of the citizens of this State."

Like what, you ask? Please note that I am not, for the purposes of this post, arguing against any of the following allocations:

• $2 million for the purchase of 250 new state trooper vehicles


• $3.5 million for a new State Police recruit training class that will graduate approximately 100 new troopers


• $8 million for an expansion of the NJ FamilyCare program


• $12.5 million to DDD to provide community residential placements and home-based services to persons on the Community Services Waiting List


• $15 million to Division of Mental Health Services for housing and support services for 200 people currently residing at five state mental health hospitals and 100 clients currently living in the community


• $15.5 million to annualize placement and day program costs for 100 developmental center clients transitioned in FY 2008.


• $24 million for the Division of Developmental Disabilities (DDD) to transition 125 clients from the seven state developmental centers into community residential placements and day programs


• $52.5 million for the State Rental Assistance Program, $19 million of which will continue support to 2,100 currently subsidized families and $15 million of which will provide vouchers for 1,500 additional families


• $60 million as an additional subsidy to NJ Transit, a 20% increase from the $298.2 million subsidy in FY 2008.

And "vital programs" like Planned Parenthood Federation of America, which received 7,700,000 dollars from the State of New Jersey. Not only did they get to keep their money, they got an increase of a quarter-million dollars from the state.

This is completely free money to them, by the way, because they're a tax exempt organization.

Planned Parenthood's annual report says that they have excess funds to the tune of one hundred fifteen million dollars ($114,800,000), while you're being asked to cope with property tax increases because Governor Corzine wants to pay them eight million dollars ($8,000,000) that he won't give to municipalities.

Don't take my word for it. Download the annual report and take a look at page 14, where it shows Government Grants and Contracts at $337MM (one-third of their operating budget), excess of revenue over expenses at $115MM, and an increase in net assets year over year from $839MM to $951MM, or 13%.

Is the 13% profit that Planned Parenthood had this year more or less than the increase in your property taxes?

This is the "clear turn towards long-term fiscal responsibility", the "unprecedented cut of $600 million", the "mandatory and inflationary growth", an allocation of "necessary reductions in a fair and equitable manner", an "austere budget".

Register your disgust with your assemblymen and state senators, and send a message to the governor here. This was my message:

I understand that almost $8MM is allocated in the state budget for Planned Parenthood, an organization that has profits of $115MM. I further understand that this is an increase of almost a quarter-million dollars from the FY08 budget. This funding should be cut completely, immediately, rather than allow to grow.

At a time when we claim to be working in austerity conditions, and when we are talking about additional taxes being placed on industry to make up shortfalls, and when property taxes are rising to compensate for decreased state subsidies, it's unconscionable that we provide corporate welfare to any organization such that they have excess money and we citizens do not.

Thank you.
Jake Freivald
[Address redacted]

Full disclosure: I hate Planned Parenthood and am firmly pro-life. But this is something that you should be outraged at regardless of your position on abortion.

Corzine, Stop Buying Scotch!

At the bottom of this Associated Press story is a telling statement about Corzine's approach to borrowing and spending.

Corzine has backed requiring voter approval for new borrowing, but said the school construction money is different because it's court-ordered. The state Supreme Court in 1998 ordered the state to pay for new schools in the poorest school districts.

So if you're told that you must pay for something, you have to be able to borrow money to do it -- regardless of what the voters say.

Consider a normal New Jersey household. (You know, the kind containing a family of people who are thinking of fleeing New Jersey to avoid the outrageous taxes.)

Now consider the husband telling the wife, "Yes, I know we agreed on a budget, and I know that we are in debt up to our ears, but we have to pay taxes, so we have to be able to borrow money for them. I'm going to put them on a credit card. Now I'm going to pop over to the liquor store for a liter of single-malt scotch. Don't worry, we can afford it -- I have cash."

The wife would rightfully beat him about his head and neck. After all, she knows that when you're in debt, you have to control overall spending. When you don't have significant control over a certain expense, that's called "non-discretionary spending". When you can control how much you spend on something, it's called "discretionary spending". The budget must account for non-discretionary spending, sometimes cutting discretionary spending to avoid borrowing to pay for the non-discretionary stuff.

In other words, the wife would shout at her husband, "You idiot! Stop buying scotch when we need money to pay the taxes!"

Corzine needs the equivalent of a sensible wife. Not only doesn't he understand the fact that speculation affects petroleum prices, he doesn't even understand the basics of budgeting.

And this is the guy we elected because of his business experience. Maybe we need politicians with less experience on Wall Street and more experience managing a household budget on Main Street.

Schools don't have to be this expensive.

This article appeared in the Jan. 23, 2008 edition of
The Catholic Advocate

Catholic Schools - a partner in NJ’s educational efforts
BY ARCHBISHOP JOHN J. Myers, D.D., J.C.D.
Archbishop of Newark

This column about Catholic Schools Week is going to be a little different. As you all know, Catholic schools in New Jersey—indeed, throughout the country—are facing a number of challenges, the largest among them how to ensure their continued viability in the face of lower enrollments and higher costs.

Those of us who sponsor schools, administer and teach in them, and work to ensure their future know that this largest challenge is a classic “Catch-22.” The cost of everything rises and so the cost of educating children increases. When you spread that cost among a group of students, it is higher than some parents can afford. As a result, students leave the school, and that means that the cost per student has to increase again. More students then leave because of cost, and so on.

Even while this is happening, every diocese, and especially this great archdiocese, has much to be proud of and to celebrate during Catholic Schools Week: superior, credentialed teaching staffs—an ever-growing number with advanced degrees—that are committed to the mission of Catholic schools and to the children they serve; curricula that is based on the NJ core curriculum, but that the schools augment and expand upon through innovative approaches and enhancements; an education program centered on the Catholic faith that doesn’t stop at one period of “religion” every day, but imbues values and morals throughout the day, in every subject, at every opportunity; a majority of schools that have achieved Middle States certification for excellence; students from all walks of life, from all economic, racial, ethnic and religious backgrounds who enter high school, college and adulthood better prepared, better educated and more motivated to achieve standardized test scores; that demonstrate clearly that parents who choose to send their children to Catholic schools have made the right investment in their children’s future.
To sum it up: Catholic school students are not taught to pass a test. They are taught to succeed in life intellectually, physically and spiritually. The parents of some 140,000 children in this state are well satisfied with the gift of a Catholic education.

Remember, Catholic schools view their role as that of a partner in education with parents. We do not take the place of parents; we work with them to form the whole child academically and morally. This is a major difference between our schools and public schools.
I mention these simple and yet compelling facts because, at this moment in our state’s history, the people of New Jersey are again grappling with the same issue: the challenge of maintaining schools of excellence at a time of rising costs.
And, as with Catholic schools, the problem appears to be one of money. The size of the problem is massive. By some estimates, the average cost to educate a child in a New Jersey public school is in the area of $15,000 per year. In some of the special, or “Abbott” districts, the cost seems to run even higher, approaching $20,000 or more.

All citizens in the state are suffering from the burdens of the increases in property taxes that seem never to end, even as Trenton promises relief. For parents who send children to Catholic or other nonpublic schools, the financial burden is even higher, because they pay twice—once through taxes to the state, and again to the school of their choice.

Some people have no sympathy for those of you who pay for Catholic schools. “It’s your decision,” they say. But as the newspapers tell us almost every day, many of the public schools in our state are not providing our students with the quality education and moral background that they need.

And so, here I come to the point of my column: I firmly believe that school choice is the best solution for education, in general, in New Jersey. There are solid financial and ethical reasons for my belief.

First, the financial reason. The average cost of education in a Catholic elementary school in New Jersey falls somewhere around $5,000 per child—one-third the cost of the average public school. When the state acknowledges that it can save in the area of $10,000 for every child whose parents elect to take advantage of a Catholic education, then it will be saving taxpayers real dollars, every year, by taking advantage of the open seats that exist in Catholic schools throughout the state.
Here, the savings can be enormous. If we were to double the number of children attending Catholic schools today, the additional 140,000 students who enter Catholic schools could produce a savings to New Jersey taxpayers of almost $1 billion per year. The savings do not end there, either. The need for additional classroom space would be lessened, because without those students, new construction wouldn’t be as necessary. And, with fewer students attending public schools, the state can accomplish its goals of providing smaller classes without the need for new buildings and new staff.

Think of it: the 140,000 Catholic school students in New Jersey alone save New Jersey’s taxpayers $2.1 billion annually. Without Catholic schools, that’s how much more the state would need to spend to provide the education that our schools already provide. That’s not considering any new construction, nor does it take into account the other religious and private schools in the state.

But there is an equally compelling reason why New Jersey finally needs to recognize that it cannot achieve real savings or progress in school funding without incorporating parental choice. It is a justice issue. Parents have a right to determine where a child should be educated, so long as the education meets the state’s curriculum guidelines. Catholic schools do that and more.

I continue to support parental choice in schools on many fronts. Direct support for all students is one area, and I know that many in Trenton and elsewhere in the state do not like this idea. They have their reasons, but those reasons are prejudicial to Catholic and non-Catholic parents who struggle to meet tuition, household expenses, and property taxes. I continually hear the mantra that “choice” is something everyone should have. If so, then the right to choose where a child can learn his or her ABCs should be equally regarded.

One area where we can demonstrate that school choice can lead to better lives is through the legislation called the Urban Schools Scholarship Act (see The Catholic Advocate, Oct. 10, 2007). This is a bill I and the other NJ Catholic bishops have been supporting vigorously and vocally. However the bill still languishes in Trenton because some believe it threatens the status quo.

On a pilot basis, this bill calls for the creation of corporate tax credits to provide funding to parents in seven districts in the state so that they can send their children to a school of their choice. Rev. Reginald Jackson of the Black Ministers Council and I, along with clergy of other faith groups, and numerous grassroots parents’ groups have called for this bill to be posted and enacted, because it will prove to the people of this state that a state’s obligation must be to provide the means for parents to select the right educational choice, rather than make the choice for them.

This bill is limited in scope—only in seven of the poorest and most educationally deprived communities in the state. But it is a start and it should be passed. A similar program has been operating successfully for a number of years in every school district in Pennsylvania; the states teachers union supplies it financially.
This week, we celebrate the best of Catholic education (see the special news section in this edition, beginning on page 19). Among the best elements of Catholic schools is the commitment to justice. In order to ensure that Catholic education and Catholic schools can continue to give our children solid and exceptional academic and moral values, I urge all of us to work toward true school choice, in whatever way we can.

Catholic schools are partners—not only with our parents and students, but with the state as well. With school choice, we will ensure that New Jersey is successful in its goals of educating in the best way possible.

How Screwed Up Do We Need To Be?

Read this article from the Star-Ledger. Take particular note of a few passages:

New Jersey is struggling with more than $32 billion in state debt, the third-highest in the country. All but $3 billion was issued without voter backing.

And then this:

The state constitution already says voters must approve borrowing, but lawmakers routinely have dodged the requirement by authorizing quasi-state agencies to issue billions in debt, and promising to repay it through the state budget.

Got that? According to the state constitution, 90% of our bloated debt slips through a loophole to survive, like Teddy Kennedy escaping his seatbelt at Chappaquiddick.

But apparently we're idiots, because we'll listen to people who tell us things like this:

Critics of the amendment [to require the approval of voters to issue new debt] say it would sap power from legislators elected to make intricate decisions, and turn complex borrowing schemes into yes-or-no issues vulnerable to voters' snap judgments.

"Simple bumper-sticker politics do not lend themselves to (that) kind of decision-making," said Steve Wollmer, spokesman for the powerful New Jersey Education Association teachers union. "It would really limit or potentially cripple the state's ability to make timely investments for the public good."

Of course, by "voters' snap judgments" Mr. Wollmer means "the democratic process". But maybe he has a point: maybe democracy is overrated. It's the same voters' snap judgments that got Jim McGreevey and Richard Codey into office, after all.

Mr. Wollmer thinks that the democratic process should be circumvented for "the public good". I don't know how good his math is -- he's a spokesman for the NJEA, after all, and they don't really focus much on quality education -- but New Jersey has 8,724,560 people and thirty-two billion dollars ($32,000,000,000) in debt. That means that the state owes $3668 for each man, woman, and child in New Jersey. That debt load is not in "the public good". The attitude of Mr. Wollmer and fellows like him is not in the public good.

A government living within its means? That's practically the definition of "the public good".

Richard Codey disagrees because we might be "tying a future governor's and Legislature's hands" should a need for emergency borrowing arise. But like former president Clinton meeting the Razorback cheerleaders, their hands should be tied, and for the same reason -- to stop them from grabbing everything they can get their hands on.

The problem is not that I want to prevent noble men and women to be unable to lead our state through difficult times, but that most of our state legislators are neither noble nor leaders. Codey says, "There are times when you'd need to do it and do it right away and not necessarily wait for an election," and I agree -- but now's not the time.

Not when Richard Codey thinks that there shouldn't be a democracy-based check on public spending.

Not when our so-called leaders have shown themselves incapable of knowing when they should borrow and when they shouldn't.

Not when they circumvent our constitutional process and issue eleven times more debt than they are allowed to.

Not when the State Supreme Court has "ruled the state could continue to issue bonds through its authorities without asking voters first."

That last fact is particularly galling. The ruling came in 2003. "The justices in the minority," the article says, "said the decision essentially killed the clause in the constitution giving voters control," which provides us with One More Example of a liberal court undermining a constitution. In an understatement to tell your grandkids about, Seton Hall University political scientist Joseph Marbach says, "The fact that we need a constitutional amendment to tell the court what the constitution says is also a little bit troubling."

We're in a budget crisis that makes Governor Corzine want to octuple our tolls, shut down hospitals, and provide fiscal responsibility (in the form of increased taxes for outdoor projects). How bad does it need to get before we stop spending money on superfluous certificates for veterans? How screwed up do we have to be as a state before we stop providing handouts to artists? How screwed up do we need to be before they stop spending our money -- and our kids' money, and our grandkids' money?

How screwed up do we need to be before we stop allowing these guys to destroy our state?

Republicans submit budget proposal-Corzine Scoffs

Why is it that when politicians like Jon Corzine talk about working in a bipartisan way, he usually means that everyone needs to capitulate to his poor tax and spending plans. NJ Republicans submitted their budget plan yesterday(from Philly.com):

The Republican proposal would restore $375 million in property-tax rebates and $150 million in municipal aid, provide $500 million for transportation and allow $195 million to be restored to what they consider "unfair" cuts, which may include charity care to hospitals and co-payments for Medicaid. It would also reduce spending from the governor's proposal by $100 million.

The money would come from a variety of sources, including massive cuts to "special municipal aid," the poorly defined state grants that were the subject of criticism in a recent state auditor's report; smaller increases for former Abbott school districts; reforming the state's procedures for procuring goods and services; increasing the retirement age for many government employees from 60 to 62, and calculating a state employee's pension based on salary in the last five years of service instead of the last three.

Of course the devil is in the details and we will review them in detail later. However, Corzine's response is typical is his spoiled rich guy approach to most everything:

"Republicans are following in the footsteps of their predecessors by talking about spending money and restoring cuts without offering any legitimate way to pay for them," Corzine said. "This is all make-believe math. This is the same sort of gimmickry and trickery that has put the state in the fiscal mess we now find ourselves trying deal with."

Governor, what do you call make-believe math? It has been clearly shown that changing the retirement age would make a huge difference in the pension obligation of the state. And also, that it is much more difficult for municipal employees to load up their pay with overtime when they need to do it for 5 years instead of three.
That is real math. The make-believe part is YOUR unwillingness to stand up to the special interests that are protecting the municipal workers and would bankrupt the state before offering a single concession. Your leadership is what is "make-believe".

I was actually impressed with Comrade Roberts:

Assembly Speaker Joseph J. Roberts, Jr. (D., Camden) was less negative, but also noncommittal.

"Every item on the Republicans' list deserves to be fully vetted for feasibility and potential impact on the state's long-term bottom line," Roberts said. "Democrats and Republicans alike are committed to delivering a final budget that makes government at all levels more accountable and will make the state more affordable. No idea that potentially could help New Jersey's taxpayers will be rejected out-of-hand."

Specifically, Roberts noted that, like the Republicans, he hopes to replace "gimmicky" property-tax rebate checks with direct property-tax credits, which should be less expensive to administer.

Here's to the hope that this proposal starts the process of getting the budget under control and stops the "where can we tax next" cycle we seem to have been in for the past 4 months.

Read the entire article here.

Governor Corzine Delivers His Budget

Here's Governor Corzine's speech in text, audio, and video.

There's also a summary of the budget from the state OMB. The executive summary is about seven pages long; the budget summary runs another 74 pages after that. I'm trying to locate a complete budget, but I'm not convinced that it has been published yet.

When I get the chance I'll try to provide some color commentary. I want to see discipline like Assemblyman Polistina showed -- but I'm not holding my breath.

Meanwhile, Steve Lonegan has already issued a comprehensive response to the Governor's speech. Since it's not up on the Americans for Prosperity Web site yet, I'll reproduce it here.

LONEGAN: CORZINE SHOULD PROPOSE REAL CUTS, NOT A "PHONY FREEZE"

Call your legislators and tell them "This is not enough!" Click here for phone numbers.

For Immediate Release: February 26, 2008
Contact: Steve Lonegan (201) 881-6692

-- Codey did the same "cuts" three years ago.

BOGOTA -- Americans for Prosperity New Jersey Director Steve Lonegan called Governor Jon Corzine's proposed budget a "phony freeze" similar to that done by Governor Codey in 2006 and said the state needs real spending reductions to bring New Jersey back.

"New Jersey state spending has doubled in ten years, gone up fifty percent since McGreevey was elected and even with the alleged reductions will be nearly twenty percent higher than it was when Governor Corzine took office," Lonegan said. "The Governor's proposal does nothing to reduce New Jersey's out of control tax burden, nothing to reduce New Jersey's ridiculous welfare state and nothing to cap the outrageous pensions and other giveaways to public employees."

Lonegan said that Corzine's proposal was deficient and should be corrected with the following steps.

• Immediate layoffs, not "early retirement" schemes that keep employees in the pension system.
• Elimination of "Project Labor Agreements" that drive up the cost of state, county and local government construction projects.
• Stopping billions of dollars in debt already authorized but not yet borrowed.
• Elimination of departments including State, Community Affairs, the Comptroller and the Public Advocate.
• Repeal the 9 percent pension hike passed in 2001.
• End state municipal aid to so-called "Abbott" districts that already receive virtually unlimited school aid.
• Raise the retirement age for public employees to 65 and end longevity bonuses.
• The new war on small towns with less than 10,000 residents must be rejected. These towns are the most efficiently run in the state and Corzine's proposal attempts to eliminate them.
• Stopping the use of "rebate" programs as income redistribution schemes, instead of looking at permanent tax relief.
• Crack down on out of control pensions, lavish medical benefits and order new and recent employees into 401(k) programs.
• Sunset all state regulations for a complete review.
• Initiative and Referendum to allow taxpayers to take charge of state government from an out-of-control legislature.
• End binding arbitration for public employees, including police officers.
• Stopping subsidies to New Jersey Network and selling the licenses and facilities to the highest bidder.
• Eliminate all unfunded state mandates on county and local governments.
• Announce he will veto the Paid Family Leave legislation that creates a new $130 Million payroll tax and a new open-ended entitlement program.
• Roll back new garbage taxes, the $10 television tax, the $500 S-Corporation tax and other new taxes passed under the McGreevey-Codey-Corzine administrations
• Oppose any new taxes or toll increases.

"New Jersey has the highest state sales tax in the country, the highest property taxes, the worst income taxes and the worst small business climate in the nation," Lonegan said. "Corzine's budget is the same phony 'freeze' Dick Codey put in before the last election and you can bet that if Corzine somehow gets re-elected in 2009 that the days of big spending, higher taxes, out-of-control debt and more regulations will be back and worse than ever."

Phone calls are more effective than email in letting politicians know how serious you are. Call your legislators and tell them "This is not enough!" Click here for phone numbers.