Tag Archives: slippage

Free Money

If someone handed you cash would you take it?

In 2008, President Bush pushed through a stimulus package. Taxpayers were given checks up to $600. As I recall, my wife and I each received the maximum.

I did not support that stimulus package. Like all stimulus checks, I find it a complete waste. Management of such programs is expensive. Those costs, slippage, demonstrates the inefficiency of stimulus packages. Tax breaks/credits are far more efficient.

Nevertheless, we cashed our checks. The money sits in a bank account along with the stimulus money Bush returned to us in 2001.

I have no problem cashing the checks. I don’t agree with the program, but if someone is going to give me the money, I am going to take it.

Sure, it’s not really free money. Government takes my money only to return it to me doesn’t make it free. Even so, it would be foolish not to accept it even if I don’t spend it.

Suppose the government were to provide you a tax break that you didn’t agree with. Would you take it? I would. The federal government permits me to write off $250 off the top for expenses for being a teacher. It’s silly. While it’s true I spend lots of money out of my pocket for my job, why should I get a break for it? I am certain other professions do the same. Nevertheless, it would be ridiculous not to take the tax credit, so I do.

Touching a Nerve

You know when you touch a nerve . . . the rabble-rousers come after you.

The other day I posted about Feeholder Magazzu’s attack on former CCIA director Steve Wymbs. It’s a political smoke and mirrors show staged to make it look like Magazzu is working for the taxpayers of Cumberland County.

Anyhow, in that piece I commented how CCIA money ended up at Magazzu’s former runningmate’s pet project. It was just an example of how county/CCIA money is spread around to political allies. I could have used any of many examples. By selecting the Levoy, I opened myself up to those who cannot see the forest through the trees. The Levoy is being headed by the very popular Lauren Van Embden and her father. Dare speak in a way that shines a poor light in her direction, and one is personally attacked. I’ve been through this previously.

Despite what others say, I have nothing against the Van Embdens. I support the restoration of the theatre. I have questioned the amount of public money in the project. A million-dollar forgivable loan from the CCIA is part of that.

The CCIA has spread around plenty of money as one of the potty-mouth commentators here shared. The reason CCIA has all this money to share is because it has the ability to raise money through bonds. Bonds are sold. Those who purchase the bonds do so expecting to make a profit. That profit comes from taxpayers as we pick up the vig on the bonds.

Governments sell bonds all the time, Bob. Why is the a problem for you?

When the freeholders or the city wants to raise money, the public has input. Millville is currently improving its wastewater plant. To do so, it sold bonds to raise cash for it. This was all hashed out at City Commission meetings and the public had opportunities to voice their opinion.

The money CCIA doles out isn’t subjected to such an airing. CCIA, and other agencies (think port authorities and the like) are given bonding privileges exactly because the scrutiny isn’t the same. That is why politicians love authorities. Magazzu wants even more agencies. Why? More agencies = more money to control.

That long list of projects that CCIA funds includes the Levoy. I am sure most of those projects are just fine and dandy, as is the Levoy. The problem is that no one is held accountable for that money. Just look at Magazzu. He’s running around the county stating he had no say in the landfill expansion; it was all hidden at CCIA he claims.

Just like the earmarks that add to federal omnibus bills, agencies are local governments’ pork. If county taxpayers are going to fund Friends of Vineland Crew, Laurel Lake Property Owners Association, Devereux, etc., let it come from the freeholder board. That way, elected officials are tied to the doling out of the taxpayers’ money and can be held accountable.

In the meantime, they forced out an unelected official to put a stooge to do their dirty work for them.

Sure, call me a simpleton. When agencies are created, perhaps nuances beyond my ability to understand are created. But slippage comes as does corruption with such a set-up. I would rather have a straightforward, clean, and efficient government than one that has dumps funding the Millville Housing Authority.

For this I will be castigated.

Dot . . . Dot . . . Dot . . .

The New Jersey Legislature is on summer vacation. As a matter of fact, they will not reconvene until after the November election when it will be a lame duck session. These folks still draw a full-time salary . . . I do not know what is up with Sarah Palin. I like her, but am not confident she has a shot at legitimately running in 2012. Why would anyone vote for her? How does quitting her job enhance her appeal? I suspect she is not running and is going to cash in on her popularity . . . How could a second stimulus package be logical? If the first one cannot get the money out into the economy more quickly, then how would a second one improve that? A stimulus is supposed to provide immediate stimulus, not future spending. A tax rebate, otoh, is immediate, although as inefficient as most government spending . . . What do championship teams do? Sweep their closest opponents (and rival) in a holiday series. Way to go Phillies! . . . I wonder if the Millville building inspection team ever walks west out of city hall . . . I just received an e-mail from the Phillies. The subject line is “E-Saver: Half-priced tickets for July 7”. When I read the e-mail, it stated, “Order tickets online for the game on July 7 versus the Reds & take advantage of a buy one, get one free offer for seats in the Terrace Deck (412-429).” That is not “tickets at half price.” It may work out the same for even lots, but if I wanted a single ticket, which is what I would have purchased for an evening game mid-week, I can’t get it at half price . . . Business as usual in NJ: the state awards a contract to Parsons to run auto inspections. Parsons lobbies state to be the only distributor of emissions equipment for inspections. Local garages have to pony up $8,000 to Parsons or forgo inspecting vehicles. Criminal . . . After five months, AK got around to feeding the hamsters and got MCE working on the scavenger hunts. I suppose that shows he hasn’t abandoned the site . . . What took me so long to cook a brisket? My goodness, leftovers are superb! . . . My experience is that there has been a fundamental shift in customer service over the years. The new underlying characteristic is that the customer is just a john to be pumped . . .

Homestead Slippage

Gert and I received our Homestead Rebate check the other day. I know we are supposed to be grateful for the money, but it just bothers me to no end. The idea behind the program is to provide relief to property owners in New Jersey for the high taxes we pay on our residences.

Unfortunately, the program makes no sense.

Property taxes rise in New Jersey for multiple reasons. Municipalities do not control spending. Obviously, salaries rise yearly, but tightening belts, seeking alternative methods, etc. all need to be continuously monitored. No evidence reveals this is the case. State government flat funds or reduces funds to municipalities. On top of this is the fact that rules change yearly over whether municipalities are responsible for pension benefits for their employees or not. The result is that municipalities and counties have to raise property taxes to pay their bills. Those of us who own property pay. This is why New Jersey has the highest property taxes in the country.

So, the Homestead Rebate was provided as a “relief” from those escalating taxes. State government uses its revenues to provide property tax relief. But if it funded municipalities better, property taxes would not rise, thus eliminating the climbing tax. Hmmm . . .

Why does state government have so much surplus in which to return to property owners? If there are indeed billions in the coffers that would otherwise not be spent, it seems that a legitimate case can be made that New Jersey is overtaxing its citizens. Governments are not suppose to run profits. Of course, New Jersey is doing no such thing.

The money for the rebates this year came from the sales tax increase last year. Part of the battle between Governor Corzine and the Democrat leadership in June 2006 was how to spend the penny increase in the sales tax. Joe Roberts et al. wanted to ensure their re-election in November 2007, so held the governor to the fire to reserve half a penny for this year’s rebate.

As I stated at the top, I just received my check. It is a little more than a month before the election and property owners throughout the state now have “extra” money in their pockets, compliments of state government. Happy voters vote for incumbents.

Now that the sales tax money has been spent, it is not available for another rebate. Too bad for property owners next year. And who will they complain to? The newly re-elected legislators. There’s not much that the public can do then.

Sure, we can vote to guarantee the sales tax will permanently be used for property tax relief. How silly is that? Why not vote to repeal the tax increase and cut spending? Voting to permanently tax ourselves is incredulous! This seems to be evidence that legislators truly believe the populace is not paying attention.

I have documented previously the ridiculous cost of running this program. To the governor’s credit, he did suggest a credit be issued rather than a check. The problem with that, of course, is that the credit would have been realized in April 2008, which is six months after the legislative election.

We received our check. We have paid for it dearly. All evidence suggests we will continue to do so.

Corzine’s Budgeting

The way the Corzine administration handles money is comical. So much for the magic of Wall Street coming to the governor’s mansion.

Today it was reported that municipalities will see a deep cut in aid for the year.

The state Department of Community Affairs said it would provide $17.7 million this fiscal year in extraordinary aid to towns that contended they’ll have to cut essential services unless they substantially increase their property tax rates. The state provided about $26 million last year.

Far be it from me to criticize spending cuts. But this isn’t a cut in spending as municipalities will offset the decreased aid with property tax increases.

Ah yes, the property tax shell game. Trenton receives “credit” for spending cuts, but taxpayers still support the spending.

The former CEO Wall Street lamented the cuts:

“I wish there were more,” Corzine said. “There are huge demands with regard to the needs of some of our less economically well-off cities. There are special situations that show up on a regular basis, but again we’re resource constrained.”

There is more, Governor Corzine.

The cut in extraordinary aid is $8.3 million. Just today we learned of building tunnels for snakes, opposums, and other critters that will cost us $9 million.

If you don’t want to deny the critters their transportation, there’s always the administrative costs for the rebate program. You remember, dear reader, the rebate program. Governor Corzine and his allies in the statehouse who want to be re-elected in November are doling out property tax rebate checks this year. The cost to do so is over $10 million. It’s astronomical, I know. That is the slippage.

Of course, there should be no rebates to begin with. Returning money to the taxpayers indicates too much was collected. Rather than return the money, keep it, spend it, and then reduce the tax rates (permanently) since the state is collecting more than it needs.

That will not occur, however. In New Jersey, we continue to raise taxes. The rebates this year are being paid for by the sales tax increase last year. The state did not need that increase as it did not spend all of the money. We know this because it has been sitting there to fund this year’s rebates.

And why are we having a rebate this year? Because all of the statehouse wants to be re-elected in three months. The statehouse is controlled by the same party that Corzine belongs to.

To summarize: the state will provide a property tax rebate to homeowners right before the election. Then property taxes will rise because the state has cut aid to the municipalities. That means your property taxes will increase.

The taxpayer gets nothing out of this transaction. Democrats retain control of government in Trenton. Understand, dear reader, there’s plenty of money to fund the municipalities. The Wall Street wizard has just decided not to look out for you.

Slippage Again

Back in July 2005 I wrote:

More locally, however, there is slippage too. Think about the popular rebate system in New Jersey. We all like to receive our rebates and when it was announced that the rebates were suspended this year, lots of folks cried Foul! Think about how much money it costs the state to return the money to us. Checks cost money. Postage costs money. The department overseeing the rebates cost money. The representatives who answer the telephone when someone calls cost money. The telephones cost money. And all this just to return money to you that you already paid. That seems pretty damn inefficient.

Jeff Edelstein, a reporter at The Trentonian, thinks so too. He has been digging into the budget that our lawmakers just agreed to for FY 2006. Each municipality receives state aid. That money is collected through our property taxes by the municipality. The municipality ships some of the taxes collected to Trenton. The fine folks in Trenton (who are paid, receive benefits, etc.) re-distribute those taxes back to the municipalities to pay for roads, fire and police protection, etc. What is the cost of doing this in the Garden State?

Ten million dollars!

The inefficiency of the system, as defined by slippage, is $10 million. That is highly inefficient. The squandered tax money came from our pockets and was placed in the pockets of a lot of government workers. Those workers receive salary increases each year and increasing health benefits. So, the inefficiency of the system is more than one year in length. This is how government grows.

Just because no one speaks about it doesn’t mean it has disappeared. Today there was a small AP article about this year’s rebate:

Property tax relief to homeowners and tenants in New Jersey will come as a rebate check in the fall.

Gov. Jon S. Corzine had wanted a direct credit against tax bills as a way to reduce the costs of the program. However, the governor said concerns about logistics and privacy wouldn’t make that feasible.

That cost is more than $10 million since everyone involved in the program has received a couple raises since 2005.

Dear reader, when you contemplate the rebate program know that not only did this administration raise the sales tax last year to fund this year’s rebate, but it also did to pay the millions of dollars it costs to cut those checks. Next year, there is no money for any of it.

I am curious, who nixed the direct credit scheme? The answer to that would indicate real reporting.

No-No-No

But I said no, no, no, no-no-no
I said no, no, you’re not the one for me
No, no, no, no-no-no
I said no, no, you’re not the one for me

KT Tunstall

No, I am not hip despite quoting KT Tunstall’s Black Horse & The Cherry Tree lyrics. Beetle and Gert are fond of singing this refrain. They like the song. The tune is stuck in my head and after reading the ballot questions New Jerseyans will be asked about next month I began singing it loudly.

I said no, no, you’re not the one for me
No, no, no, no-no-no
I said no, no, you’re not the one for me

Question 1 is one we commented about before. Don’t forget, dear reader, this question is a direct result of the budget crisis this summer when Corzine and the Legislature shut down state government. Without asking you, they raised the sales tax 17% and now want you to guarantee that half of that increase is mandated to go to property tax reform.

While superficially that may sound good, what it actually does is mandate that taxes are collected from you to return to you later. That creates slippage, that slippery and inefficient use of tax dollars. This does nothing to reduce the burden that you pay. Later, legislators will decry their hands are tied because they are mandated to collect these taxes. Don’t fall for it.

We laid out our position on Question 2 back in July. Frankly, the state made it very easy for us to change our position. I originally voted in favor of this legislation when it was first pitched. But these tax dollars are not being used in the manner I expected. I thought forest land would be purchased. Instead, New Jersey is buying golf courses and forcing municipalities to prohibit Beetle from feeding ducks at ponds. Phooey! This is not how I want this program to run and therefore am voting No.

The interpretive statement Question 3 shows how out of touch state government is:

Do you approve the proposed amendment to the State Constitution, agreed to by the Legislature, which changes the current $0.09 per gallon dedication of the motor fuels tax to $0.105 per gallon to be used only for the funding of the State transportation system, subject to previously enacted laws dedicating any of these revenues for debt service on bonds of the State or for any other uses of these revenues?

They want it constitutionally mandated that part of the gasoline tax be mandated to be spent on transportation. Surprising that it isn’t all spent that way already, isn’t it? Rather than amend the constitution, how about we amend who spends that money? Vote them all out of office.

What is the gasoline tax funding if it isn’t transportation costs? This inefficiency is exactly why the first thing Governor Corzine did once he took office was to indebt all of us for 30 years to raise money to fill potholes. That means the potholes filled in 2006 will be paid for out of your taxes in 2020. Do you have any expectation that your taxes will be less that year than this one?

This is a sham and we should not enable state government with this measure. If they cannot balance the budgt by using all the gasoline tax for road costs, they can either reduce spending or we can vote them out of office. This question will not resolve the issue.

So there you have it, dear reader. Three questions to vote No on.

No, no, no, no-no-no
I said no, no, you’re not the one for me

Van Drew Burdens Taxpayers

If ever there was a bill that highlighted what is wrong with government in New Jersey, A4359 is it.

First, a little background. New Jersey has an Urban Enterprise Zone (UEZ) program. The idea of UEZs is to re-distribute wealth. Various low-income communities throughout the state participate. There were certain criteria each UEZ had to meet, but once met, the agency established is funded with millions of tax dollars to help business grow. The UEZ boards distribute these funds on projects it sees fit in grants and low-interest loans.

Furthermore, the state has permitted any business within the UEZ that has 20 or more employees to charge half the state sales tax. That is correct; buy goods in an UEZ and one only pays 3% sales tax. Buy the same product in an a non-UEZ store in a neighboring community, you pay 6%. The 3% collected does not go into the state coffers either. It remains in the UEZ for other projects. That means sales tax from UEZ businesses does not go to Trenton. How’s that for re-distributing wealth?

Millville in Cumberland County is a UEZ. From the surface, good things have occurred with the local UEZ money. Downtown Millville is being restored, there are new businesses, and one gets a general sense that the town is on the correct path.

The big news out of Millville in recent years is the proposed motorsports park that is going to be built next to the municipal airport. We won’t get into the noise issues or the traffic congestion. We won’t touch on the tardiness of the developer to make payments, the loss of wooded areas, or a re-adjustment of the number of full-time local jobs the park will provide.

No, the issue today is that Assemblyman Jeff “I sponsor every bill there is” Van Drew rammed the most idiotic bill through the Assembly yesterday. We first mentioned this bill in December.

A4359 allows the motorsports park to charge more taxes than any other UEZ business. That’s right, customers of the motor track will pay 5% on the goods they purchase, not 3%.

A governing body that establishes a sports and entertainment district (ed. Only this proposed motorsports track qualifies) may, as part of the ordinance establishing the district, assess any or all of the following taxes: (1) an additional two percent tax on sales within the district of tangible personal property subject to taxation under subsection (a) of section 3 of P.L.1966, c.30 (C.54:32B-3); (2) a two percent tax on sales within the district of food and drink subject to taxation pursuant to subsection (c) of section 3 of P.L.1966, c.30 (C.54:32B-3); (3) a two percent tax on hotel rooms occupied within the district and subject to taxation pursuant to subsection (d) of section 3 of P.L.1966, c.30 (C.54:32B-3); and (4) a two percent tax on admission charges to places of amusement within the district and subject to taxation pursuant to subsection (e) of section 3 of P.L.1966, c.30 (C.54:32B-3).

This is a time of fiscal restraint. It is a time when state government is severely short on money. The governor has proposed raising the sales tax, put off property tax reform, and indebted the taxpayer for three decades to provide road money for a mere five years while municipal governments are scurrying around trying to assemble budgets to pay for needed services (like police protection) that Corzine has refused to pay for with state funds. Taxpayers are going to be paying a lot more next year to live in New Jersey.

And Assemblyman Van Drew just added to the load. A4359 will put more of a burden on the already taxed citizen.

Dear reader, the extra 2% that will be charged at New Jersey Motorsports Park is not for government use (although there is certainly the opportunity for slippage). Rather, it will sit in a fund for the developer! The developer will be able to leverage loans off that pot of money.

Eighty percent of the $100 million park will be be financed by taxpayers. I wonder if I opened a store if I could get the government to finance 80% of the upstart costs. Could you, dear reader?

Van Drew has pimped for the developer of this project and convinced his buddies in the Assembly to go along with it.

While I am a Millville resident, if we can afford to pay more in sales tax, then it is time for the UEZ designation (and all the perks associated with it) to go away. This is absolutely ludicrous! A special tax should not be able to be levied that is to be used by a (out-of-state) company.

Budgets, Sales Tax, and a Challenge

Carnival of the NJ Bloggers
Carnival of the NJ Bloggers

There are rumblings from NJ Democrats that Governor Corzine’s proposed budget is about to hit a snag. Increasing the sales tax 16% as Corzine wants to do is likely to have consequences at re-election time. Democrats control the state Senate 22 to 18. With the Republicans lined up against the sales tax increase, all it will take to stop it are two rogue Democrats.

Today Sen. Stephen Sweeney, D-Gloucester is making noise. According to him this is going to be a hard sell.

Sweeney has asked Corzine’s administration to show him a budget plan that doesn’t include tax increases, even if that means deep budget cuts. Sweeney suggested cutting the budgets of all state departments and agencies by 10 percent.

This is exactly what needs to be going on. Last summer. This is what organizations do when money is tight. I work for an Abbott district. We are already preparing budgets for next year with 10% decreases in spending.

This is what has been troubling with Corzine’s budget. He has spoken about the hard choices and the massive cuts, but spending, if he gets his way, will rise 9.2%. That is not being responsible. That is not tightening the belt.

Now, I have no expectation that Sweeney and other Democrats will actually vote against the sales tax increase. But it is good to have the discussion and perhaps, just perhaps, the public will latch onto this and demand a responsible budget.

Enlighten highlights the same issue today as does Sharon at The Center of NJ Life. Sharon challenges us with a legitimate quest:

Let’s hear some plans for where you plan to get the money or what you want to cut, instead of just gripes.

As I highlighted before, there should be a 10% across the board cut in all departments. Enlighten has found $858.52 million to cut. But more to the point, allow me to highlight two areas that I have not heard discussed thus far: Schools Construction Corporation (SCC) and property tax rebates.

Schools Construction Corporation
Last August it was noted that the SCC had but $60 million left of the $8.6 billion it took from New Jersey taxpayers. This money was encumbered after the referenda held in September. There is no more money for this agency to squander. So, let’s close its doors today. The state can cut the checks to each district that is in the middle of construction. These districts have facilities managers on board. There is no reason for state oversight at this point. The districts can manage the projects from here on out. As Ken Adams has shown, the districts oversee these projects far more efficiently than the state does anyhow. I do not know what the budget is for the SCC and it is unlikely to significantly reduce the budget. Yet, this is exactly the kind of waste the governor promised to cut during the campaign.

The SCC is fraught with corruption and inefficiency. It squandered the taxpayers’ money miserably. Now there is nothing left. So, there is no reason to have the agency. Perhaps more money will eventually be appropriated to complete the job SCC did not get done. Should the state ever get to that point, we can re-visit how best to oversee those projects. Since the money should be provided with taxpayer approval, I suspect it will be a long time before we really need that conversation. In the meantime, the state can shorten its payroll, save adding to the pension system, and keep more off of the state medical benefits tab. There is no down side to this proposal for the state. So Sharon, let’s cut this agency.

Slippage/Property Tax Rebate
One of the central themes here at eCache is that of slippage. Slippage is a measure of the inefficiency of the system. Collecting money from taxpayers, putting it in the bank, hiring a department to then write checks back to the taxpayers to return these excess taxes in the name of property tax relief costs money. It is a sham; a system full of good feelings, but really accomplishes little.

Thus, I propose eliminating the rebate sham program.

Whatever department manages this program and money can be eliminated. Again, that money gets to come directly off the tab of the taxpayers. Just like the SCC, more state workers come off the rolls. Fewer pensions will be funded. Fewer medical benefits will be purchased. This is all good.

Some will ask what will happen to those tax dollars. That is a very good question. And that is something the governor will need to address. Once we get rid of the sham program, is there a defense to collecting these extra tax dollars? Perhaps a compromise can be found that the state can use those dollars this year for an equal cut in government spending elsewhere. I certainly would be willing to entertain that. Or perhaps the governor will need to confess that there isn’t a legitimate reason for the state to sit on our tax dollars only to spend money to return them to us at a later date.

Neither proposal will shrink state government enough. But both cuts exorcise waste from the public payroll.

The issue here is not that this is not enough but rather, why wouldn’t we want to cut these two departments?

More, More, More

Carnival of the NJ Bloggers
Carnival of the NJ Bloggers

Tonight after joining Beetle and Gert for a quick dinner at Oliver Twist’s, I drove to Rowan University for a budget discussion session with Governor Corzine. This was the third such meeting this week (Sharon @ Center for NJ Life and Xpatriated Texan cover the previous two evenings). Tonight, instead of having the state treasurer on hand, Corzine brought former (Byrne) state treasurer Dick Leone and former (Kean) chief of staff Lew Thurston. This “discussion” lasted just about 90 minutes.

What was clear is that Governor Corzine will be raising taxes.

The governor began with framing the issue: we spend more than we collect. There are tough decisions ahead of us.

As he presented the framework of his approach to the budget, he said

The budget is a reflection of our values.

He then described our values as providing for a great educational system, having a high median income, preserving the environment, providing a bright future for our children. He concluded that

We haven’t matched our budget with our values.

Then he turned the lectern over to Thurston and Leone who provided the history of how the state ended up in this financial mess. Thurston was not well-prepared as he read the PowerPoint slides. He did say that health care, education, and employee benefits need to be re-prioritized.

In a theme that was prevalent throughout the evening, Thurston highlighted that non-recurring revenue has been used to fund recurring expenditures for too long. This is a major issue in how we got into this mess.

State government spends our money as follows:

  • 40% state aid (schools and municipalities)
  • 33% grants (Medicaid, property tax relief)
  • 12% state operations
  • 10% other (debt service, salary increases, employee benefits, rent, utilities)

Leone was far better at presenting the history. Income tax acts as a collection agency (and hence, introduces slippage. Longtime readers of eCache know all about slippage.)

One area he highlighted was how New Jersey spent all its tobacco settlement money in one year. That helped balance that year’s budget, but we’ll be paying for the debt on the loans sold in future years.

He took a well-deserved shot at former Governor Whitman for borrowing from the state pensions to invest in the market and then not fund those pensions. Truth be told, McGreevey and Codey did not fund the pension either.

Corzine shared that the number of state workers is about equal to what it was in the 1970s. What has happened is that the state has assumed responsibility for employees of the state’s colleges and school districts, thus adding to the state money being spent on employees.

He then ended this segment of the evening by telling us that if nothing were done, we will be $4.5 billion in the hole for next year because of mandated increases.

We need to do something.

To the governor’s credit, he did a fairly good job of presenting the dire situation the state is in. He also came across as one who is concerned and trying to wrestle with the issue. He made it clear that each decision has an effect on someone or someones.

Question & Answer
The balance of the evening was for the “public discussion”. Unfortunately, there was no interaction. Deputy Chief of Staff, Jeannine LaRue read questions submitted by the audience ahead of time and Corzine, Thurston, and Leone responded. LaRue was wonderful in her role and kept things moving and interesting.

How will child welfare be re-structured for the children, not for bureaucracy?
Corzine shared that New Jersey is close to having the federal government take over the child welfare agency. Not only would that have the state abdicate its responsibility, it would be adding another layer of government to an already bureacratic agency. DYFS needs to be re-engineered. Corzine is now reviewing the issue and reports, yet he promised more training and programs (expenditures). He also stated that there is $110 million growth annually in this agency and that throwing money at the issue isn’t the answer.

Will school districts that have forced growth (like Egg Harbor Township) receive extra state funding?
Yes.

Corzine spoke about “re-engineering” the Schools Construction Corporation (SCC). SCC was never set up properly. No money was ever earmarked for land acquisition or land clean up. A flat fee was created for square-footage with no allowance for cost growth over time. There were no controls put in place. And there was waste, fraud, and abuse.

SCC needs to be re-built so it instills confidence. Only then will we ask for more money. Corzine expects that to be within this fiscal year.

None of that, of course, really addresses the forced growth districts, yet Corzine promised increased funding for those districts.

Corzine again stated that spending cuts can only do so much. For each district that needs to increase funding, some other needs to be cut or taxes will need to rise.

What is the opposition to raising the gas tax?
Raising the gas tax would have limited options Corzine explained that when if he had to raise taxes to fund other parts of the budget, it would be easier if the gas tax was not raised as well. He also offered that even if the gas tax had been raised by $0.25, not enough money would have been raised to guarantee the matching funds from the federal government.

When will there be future expansion of the Stars 2 program?
Stars 2 is the program that pays for NJ residents who have done well in high school to attend a NJ community college. Corzine wants to expand this so those who do well in community college will receive aid to attend a four-year institution. This is the one issue that Corzine pretty well stated would not be funded this year, despite his desire to do so.

We should raise the alcohol tax by a nickel per gallon to fund treatment and prevention programs.
Leone offered that New Jersey has one of the worst tax systems in how it affects ordinary people.

Corzine indicated such a tax would draw lots of attention as the middle class’ ire would rise as would distributors (not to mention bars, casinos, and the like). Nevertheless, Corzine offered that we need to increase spending to break the cycle of addiction.

I am committed to funding this.

In light of Medicaid/Medicare cuts, how will the state guarantee funding of nursing homes?
This is a real problem, according to our governor. We need to raise co-pays (which he knows will negatively impact those least able to afford them). He also pointed out that New Jersey uses fewer generic drugs than any other state. This is one thing I found enlightening. He spoke at how we need to change the system so we use more generics. I thought that was a good point.

But that coupled with eradicating fraud and waste is unlikely to equal the $50 million that the feds are cutting from New Jersey. So, despite doing well in this area, the state is going to be in a hole in this regard. He also shared that because the feds are so tardy in getting people on the roles (my mother, for instance), states front the benefits. New Jersey puts out $160 million covering for Medicaid/Medicare expenses that the feds are lax on. Corzine expects to get the bulk of that back, but there are no guarantees and, of course, there is the slippage for stepping up.

Will you support a moratorium on eminent domain?
Corzine stated clearly that he is not in favor of eminent domain for economic development.

There was some strange question about finding $4 million to keep disabled workers working.
Not only did I not understand the question, neither did Governor Corzine. He stated

I am not familiar with that line item.

That, however, did not keep him from promising to hold the line on its funding. There will be no cuts.

Will funding for education increase, decrease, or remain flat?
Corzine indicated it would remain flat for the fourth of the last five years.

He then explained that Abbott districts will grow as mandated by the Supreme Court. Increases in the Abbotts means fewer dollars for other districts. Yet, forced growth and distressed districts will receive more. He also stated that the caps (1701) would not change.

Will the SCC and UMDJ folks be held accountable?
The governor was quick to point out that not everyone is corrupt. He has replaced the management of UMDJ and has a new head at SCC. He expects indictments from the US DA’s investigation of UMDJ. The Attorney General is investigating SCC.

Corzine cautioned that even though we all will be happy there will be consequences, this will not solve the budget problems.

When will there be enough treatment funding?
Corzine used this question to frame the budget problems. He said that this issue shows how taking money from one area affects other areas. These are real issues with real consequences.

Corzine then summed up his position:

If I can convince you we have done as much as we can with spending, taxes can bridge the gap.

There you have it, dear reader. The horror story. Some money will be cut to highlight the problem, then taxes will be raised to continue spending.

I could not help but think during this question of what my last Rowan University adviser shared with me. Dr. Kern, former superintendent of Washington Township, explained that as a principal, you cannot solve every issue. Rather, you need to understand what you can and cannot do. Don’t take on tasks that you are not equipped to handle. And it occurs to me that government should not take on drug treatment. This is not an area government can succeed with.

What is being done to reduce propety taxes?
Corzine shared his plan for New Jersey:

  1. Solve the TTF issue (gimmick that pushes off reform for five years)
  2. Prepare the budget (raise taxes)
  3. Property tax reform

Corzine spoke of consolidating services between municipalities and school districts. He also indicated that would not happen this year (Is that doing everything possible to cut spending this year?).

Corzine re-iterated his campaign promise of raising rebates by 10%. It will be funded this year.

Conclusion
Corzine hammered how each decision that is made affects other areas. He emphasized that now is the time to reform the system. There are no more one-time fixes or gimmicks to use. Yet, that is exactly what indebting us for 30 years to fund five years for the Transportation Trust Fund is.

He spoke about how he will make more significant spending cuts than ever before, yet other than not expanding the Stars 2 program, he spoke about increases in everything. More money for Abbotts. More money for forced growth districts. More for distressed districts. More for treatment. More for child services. More for addiction prevention. More for needy healthcare. More, more, more!

Break out your wallet, dear reader. The governor has his hand out.

Pre-Discussion Observations
I arrived at about 6:30. The room was set up to handle about 500 people. There were computer kiosks set up in the ante room for the audience to submit questions. Despite being told no bookbags were permitted, plenty of folks had such bags. This affected me as I would have live-blogged the event if I thought I could have brought in my laptop.

There were two screens set up with a PowerPoint presentation. Sitting there for 45 minutes presented one an opportunity to critique. The seal of the state of New Jersey was either a .bmp or a .gif. There was white space around the seal. As it was plastered onto a canned blue background, the presentation presented an amateurish look. It would take about a minute to correct this. Coupled with the inappropriate use of an apostrophe in 1980s, graphs too detailed to be projected in a room this size, and slides with far too many words on them, this presentation suffered from “rookie” mistakes.

The lectern on the stage sported a wooden seal of Rowan University. From where I sat, the lights highlighted every fingerprint and smudge on the lectern. A rag and a little saddle soap would have improved the look.

More evidence that Americans constantly feed themselves, coffee and water were provided and the majority of the audience partook. Up and down they moved. It was far worse than children at a movie theater.

The expression time is money crossed my mind at 7:10 when it was more than obvious that the event was not started on time. I recalled going to a Corzine rally last summer that I left before the candidate arrived since he was 45 minutes tardy when I had had enough.

There was a security detail on duty. It was rather laughable. The one guy had one of those microphones that sits in his hand. The wire was not concealed. He stood guard doing his best Clint Eastwood impersonation from In the Line of Fire.