New Jersey Tax Revolution Roundup: Taxing, Spending, Salaries, and Solar Energy Incentives

Some odds and ends for you to browse this evening.

From the Courier-Post Online:

The new head of Burlington County government has pledged to continue the tax-cutting policy of the county board of freeholders.

Freeholder-Director Bruce Garganio of Florence also said he was truly grateful for the opportunity to serve as director in his freshman year on the board....

"We owe this to the taxpayers of Burlington County," Bruce Garganio of Florence said of trimming the county property tax levy further during his state of the county speech at the yearly reorganization on New Year's Day in the Olde Burlington County Courthouse.

The Press of Atlantic City discusses how New Jersey's "incentives" (that's taxpayer money being funneled into selected businesses) are affecting the renewable energy market. Three highlights: Business owners with no experience, operators of solar facilities earning ten times the market value for energy (60 cents per kilowatt vs. 6 cents), and a lot of startups but no regulation.

The major attraction has been the state's financial incentives, which New York-based Global Solar Center called "the most generous incentives for solar power in the nation." The most notable one may be the Solar Renewable Energy Certificate, a credit-based system adjusted in 2006 to capitalize on the state Energy Master Plan's mandate that 20 percent of the state's energy come from renewable sources by 2020.

The use of the solar certificates has helped New Jersey grow its solar power industry in a hurry by making solar energy profitable.

Operators of solar energy sites, from large commercial facilities down to homeowners, can earn credits for every 1,000 kilowatt hours of electricity they produce. The credits can be sold to other energy companies seeking to meet their renewable energy goals.

With a solar certificate, an operator of a solar facility can earn 60 cents per kilowatt hour, said Joe Isabella, director of the Vineland Municipal Electric Utility. In the traditional wholesale energy market, a kilowatt is worth about 6 cents.

In another sign of local fiscal pressure's ability to roll back entitlements that have gone too far, The Daily Journal reports that Millville is preparing to renegotiate its union contracts. It's pretty clear why:

Millville reached a contract with its firefighters in September 2008. The five-year deal gave firefighters a 3.6 percent raise the first year and 3.8 percent annual raises for the remainder of the contract....

Council 18 members -- who include maintenance workers, police dispatchers, parks and recreation employees, public works employees, utility workers and other City Hall employees -- received 3.6 percent annual raises for three years. The administrators received a five-year contract with 3.4 percent raise each year.

Let's do the math: The median annual salary for a firefighter is about $44,000, according to salary.com. If we started with that salary in September 2008 (it may have been slightly lower, but this is just an illustration of the numbers) then the salaries would be:

Year	Salary
2008	44,000
2009	45,584
2010	47,316
2011	49,114
2012	50,981
2013	52,918

For those of you playing the home game, that's an increase of 20% (((52,918-44,000)/44,000)*100) over the course of five years. Council 18 members see an 11% increase over three years, and administrators see an 18% increase over five years.

The Washington Post tells us that "State and local pensions plans are on path to failure":

Even if pension funds do manage to achieve that magical 8 percent average rate of return over the next 15 years, they will only have an average of 45 percent of the money they need to pay benefits, according to an analysis by state pension expert Kim Nicholl of PricewaterhouseCoopers. The picture for health benefits, which states are generally paying out of current revenue, is even worse.

It's worth reading the whole thing.

The Star-Ledger Editorial Board discusses a plan to tax students at local colleges and universities, highlighting why it's a misguided thought:

In fact, it’s an awful idea that burdens students and lets town officials delay tough spending cuts. It also frays the relationship between universities and towns, which should be collaborating on solutions instead of pointing fingers....

The resolution estimated the average municipality loses about 13 percent of the taxes it could collect "if all property within its borders were taxed." ... But taxing all property within a town’s borders would mean hitting up hospitals, churches and many other charitable and nonprofit institutions. Why should colleges be singled out?

There's more, too: Did you know that Seton Hall, although it's tax-exempt, pays "payments in lieu of taxes" and full taxes on its off-campus property? That adds up to $364,000 -- on top of which, it "contributed $500,000 toward a sports field for the South Orange-Maplewood community." This is a great editorial, not terribly long but very impactful, and also well worth reading.

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It's official: NJ citizens Income Plummeting

In case you are wondering why Jon Corzine keep running away from his record as Governor of NJ...


From PolitickerNJ:

CONTRARY TO GOVERNOR CORZINE'S CLAIMS, NEW JERSEY IS NOT BETTER POSITIONED THAN OTHER STATES TO WEATHER TOUGH ECONOMIC TIMES
New Jersey's median household income declined by $7,214 from 2005-2006 to 2007-2008, the nation's largest dollar decrease, according to statistics released today by the United States Census Bureau.

"These Census statistics clearly refute the claim that New Jersey was better stationed to weather this economic storm that Governor Corzine and his allies in the Legislature kept telling residents this summer while embracing a budget that slashed property tax relief, raised taxes and simply ignored the state's dire financial situation," Assemblyman John DiMaio, R-Warren and Hunterdon, said.

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State deficit - Corzine says everyone is doing it!

Jon Corzine made a comment meant to suggest that New Jerseys fiscal woes a the same saying "almost every state is in the same situation". Do the facts back him up(from CBPP)?




So, while many states have deficits, they all do not. And while many states are revising their numbers (these were prior to most states evaluating their revenue collection for 2008), it is not all states. As a matter of fact, 29 states have budget deficits. 21 do not. And 7 states have a deficit in excess of 10 percent of their budget, New Jersey being one of them.

So maybe Governor Corzine should say "7 states have completely failed in their fiduciary responsibility to the taxpayers and we are one of them". That would be a lot more accurate.

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The Real Meaning of the Tea Party Movement

Certain events cause you to think about what is going on in the world today and where you came from. Well over a year ago, Jake and I created this blog as a response to the New Jersey Governor and legislature's implementation of their massive sales tax increase. Early commenters treated us with a "grow up" kind of disdain. I am sure that their reasoning said that New Jersey citizens have always been apathetic to taxes and this would never change. We always believed that if people only knew the facts, they would respond and rise up against a culture of corrupt government that only serves itself and the politically connected. And never serves the taxpayer.

Fast forward almost two years. On April 15, we are likely to see a demonstration that none of us has ever experienced. You see, the tax tea party movement is not a pack of liberal professional protestors. It also is not a bunch of hippies looking to revisit the glory days of the 60's. The movement is made up of regular people who have not responded as expected to the anti-wealth rhetoric of the current administration and their liberal colleagues in the states.

I have been getting a steady stream of emails since our first posting of the tea party locations. While the comments section shows a lot of anonymous posters, these folks send us mails looking for help, offerring to volunteer and are generally disgusted by our state and the state of the federal government.

The media is trying to paint the tea party movement as a bunch of conservative kooks. It is clear to me that there is nothing kooky about what is going on. This movement is made up of honest, hard working, normal people who don't appreaciate the "changes" that we are supposed to believe in.

I think that the issue is that Americans at heart aspire to do better than their parents and even themselves. We are always striving to work hard and make sacrifices for our families. We don't resent the guy or lady in the fancy car that drives by, we strive to be that person. And we do not appreciate a president or governor that assumes that we want someone to take care of us. Thanks Barack and John, we will take care of ourselves thank you.

We all knew who brought us to this point and many of the same people who caused the current crisis are bathing in earmarks right now as a byproduct of the president's policies. Sure, Bush played a part. However, he has left the stage. What about those who would blame Bush but carry far more of the blame than he ever did? They are still on the stage, profiting from the crisis. Dodd. Frank. Schumer. Why don't they leave the stage?

And in the end, who is left holding the bag? Us. Hence the tea party movement.

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NJ Tea Party Locations!

UPDATE: All Tea Party information will be updated on the sidebar -->
instead of being updated below. After April 15, 2009, that information will be moved to this post. If I keep on top of things, anyway.

I guess when you coin your blog NJ Tax Revolution, folks who are looking for the beginnings of the real thing look here first to find out what is going on. While we didn't come up with the Tea Party idea, we certainly support it. Several readers have inquired as to where they can attend one of these events. We will try to keep up with these events moving forward for those who would like to show up and demonstrate their feelings about the irresponsible handling of our taxpayer money.

There are currently three events of which I am aware for NJ coming up. All three events are on April 15.

Newark
At Senator Lautenberg and Menendez' office building
Gateway Center One, 782 McCarter Highway
12:00 PM

Trenton
New Jersey State House
125 W. State St.
11:30 - 4:00

Morristown
Location TBD
9:00AM to 12:00PM

We will update this list as further information develops.

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Corzine's (and the Democrat's) Budget Problem

Jon Corzine just submitted his version of a budget this week with apparent lukewarm support only from his Democrat cronies in the legislature. This budget is likely to dramatically decrease Corzine's approval in the state due to the dire situation of the state's finances. Corzine in his budget address on March 10 claimed that he is a champion of cutting the budget:

To that purpose, the budget I am proposing for FY 2010 totals $29.8 billion - that's $1 billion less than the first budget I presented in 2006. Stop and think about it, since 1947, every governor before me has grown spending over their four years.

With this proposal, we will have reduced spending two years in a row and will literally spend less than in the first budget I presented in 2006. This isn't a matter of debate or nuance. It's a fact.

Let's examine this statement. He compared his drop in spending to the budget he submitted in 2006. For those of you who believe that facts should trump malarkey (I used that word in preparation for St Patrick's Day), here is the budget statement for the budget he submitted in 2006:

Governor Jon S. Corzine’s proposed Fiscal 2007
Budget seeks to restore fiscal integrity to the State
of New Jersey. This $30.9 billion Budget is an
important first step in a multi-year process to
reestablish prudent fiscal management. A
fundamental principle reflected throughout this
Budget is that we, as a State, must pay the bills for
the current operations of State government. We
cannot continue to defer the costs of our decisions
to future generations, or even until next year. This
simple practice of matching current expenditures
with current revenues has been missing from State
budgets for too long.

So, truth check one is on track. But what about the budget that acting Governor Codey submitted in 2006? Shouldn't that have some relevance on "Governor Spending Cut"? This is from the Budget brief for 2006:

Acting Governor Codey’s $27.4 billion proposed Fiscal
2006 Budget is an honest and responsible budget that
has State government living within its means and meets
the challenge of reining in government spending while
at the same time not recommending any increase in the
sales tax or income tax rates. Despite nearly a billion
dollars in increases for mandatory entitlements, the
proposed budget is $614 million, or 2.2%, below the
$28 billion budget enacted in fiscal 2005. In contrast,
the Fiscal 2005 Budget actually increased spending by
17% from the year before. In fact, the reduction
proposed for fiscal 2006 is the largest spending cut in
State history, both on a percentage basis and in its
amount.

So the real facts are that Governor Corzine is proposing spending 2.4 Billion dollars more than the budget that Codey submitted before he became Governor. And those were much better times than today. So Corzine while claiming the mantle of a spendthrift, is lying through his teeth. He raised spending 3 billion dollars his first year in office and now pats himself on the back for not getting anywhere near what Codey did as temporary Governor the year before he took office. I cannot consider this rhetoric or nuance, Mr Governor. You are dishonest.

Another dishonest portrayal is the claims about how the prior Republican Governor ran the state into the ground. Here is Christie Todd Whitman's final budget brief:

The total budget recommended by the Governor for
fiscal 2001 is $21.253 billion, an increase of $1.278
billion, or 6.4%, over the current year. Over the
seven budgets of the Whitman Administration, the
annual growth in appropriations has averaged 4.5%.
This compares to 6.3% in the prior administration.

Let's summarize what we have gotten from Corzine and McGreevey and their Democratic counterparts. Budgets that have grown from 21.2 billion dollars to 30 billion dollars. That represents growing the budget of this state 150% in the 8 years they have been in office. Our taxes are out of control and the only thing that has grown in the state are corruption arrests for New Jersey politicians (mostly Democrats) and the state workforce.

This Governor and legislature could have made an effort to get spending under control. They could have created a rainy day fund in good times to protect the state from economic downturn. They could have exhibited at least a semblance of fiscal self control. But they haven't. And we continue to pay for it.

And now, as the Governor tries to claim that flat lining spending increases will balance a budget devastated by the personal misfortune of many Wall Street "Rich People" that Corzine likes to point to when he is ginning up his class warfare act, he is being dishonest once again. And guess who is going to pay the price?

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Q: What's the worst way to start a crash diet?

A: Run out of food.

At his end-of-the-year press conference today, Governor Corzine gave a pessimistic view of the next year in New Jersey and committed to cutting spending. This is gonna hurt. We've been gluttons for too long, and as we tighten our belts we will be in more pain because of it.

(Fortunately, for most of us, this is just a metaphor; that said, please remember the "We Can't Let This Bank Fail" food drive.)

It's a shame that it will hurt this much. Some of this was avoidable, even with the financial sector's plummeting fortunes.

Think about one aspect of the pain: cutting the government's budget will mean lost public-sector jobs. Transitioning from a government job to a private-sector job is hard -- and it's made even harder when private-sector unemployment is high. People with "safe" government jobs will feel more pain than if we had reduced our budget earlier, increased private employment in the state, and thereby encouraged them to get private-sector jobs.

Don't get me wrong: a bad economy always hurts. But this one will hurt more because of our dependence on the Nanny State.

And we will only be making this particular dependency (government jobs) worse if we pretend that feeding the government is an economic stimulus. Go to war with Connecticut? Maybe that would stimulate the economy. Pour more money into government contracts for road building? Not so much.

I don't only blame Governor Corzine. As WBGO reports, "His most recent plan to delay pension payments floundered in the Senate." But I do worry about him; he needs to follow through on this promise:

Let’s actually get in front of the curve as opposed to staying with it and waiting for some other shoe to fall, to drop, to get to a conclusion. I feel very strongly about that. It’s not exactly a love fest with regard to those issues.

We should have done that already. We shouldn't have a 33-plus-billion-dollar budget. Yes, we should have encouraged municipalities to merge or share services -- something I heard Corzine claim on WBGO this morning, but that isn't included in their write-up -- but we also should have made them less dependent on the state in the first place.

Governor Corzine, State Assemblymen, State Senators, now is the time. Yes, this is going to hurt, but the time will not come again in which people are this willing to regain control on spending. Tightening the belt will hurt, yes, but you have to do that anyway. Ratchet it tighter than you feel comfortable with, because normally the ratchet works only one way, and you can't tighten it at all. Get ahead of the curve.

Don't play games: don't claim that you've made deep cuts when you're only going back to 2006 funding levels, don't claim that you're only borrowing for "required expenditures" when every penny borrowed or spent represents a choice to go further into debt, don't posture as a deficit hawk while promising bailouts and stimulus packages for big government projects.

Do your job: get the state's finances in order.

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Corzine responds to financial crisis!

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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.

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