Tag Archive: Senate President Sweeney

Pension Reform: “It’s NOT My Way or the Highway”

“The lower [bond] rating reflects our concern regarding the stresses from the state’s poorly funded pension system, substantial post-employment obligations and above-average debt levels.” – Standard & Poor’s analyst Jeffrey Panger (02/09/11)

Governor Christie has been delinquent in carrying out his duties to fund the pension system. In early 2010 he removed monies in Governor Corzine’s budget and did not make the anticipated State contribution to the plan. Likewise, in his current budget he has no funds to pay into the plan. Nor has he committed to making a payment in the upcoming year.  It is not surprising for an analyst to point out “the state’s poorly funded pension system.”

The Democratic led legislature in March 2010 working with the governor passed reforms that required public workers to contribute 1.5 percent of their salaries toward health insurance and removed part-timers from the system.  This week Senate President Sweeney introduced a plan that in part would in part create labor-management boards to set workers’ annual pension contributions based on the solvency of the system. The Governor and Republican legislators have their own more draconian proposal.  

Borrowing with reasonable rates is important for all states. However, Christie’s efforts to blame the lower bond rating on the Democrats is lame. It is a shared responsibility, and with roots in past administrations. Rather than his “My way or the highway,” approach, it is time for the governor to engage in substantive negotiations with the Democrats. Those who have invested into the system have every reason to demand him to contribute to the plan and to seek a workable solution with the legislature. The problem is real, but posturing and playing the “blame game” won’t solve it.  

Legislature: Picking Up A Head of Steam

Keep the N in NJN

The Legislature had wanted to lead the negotiations with potential NJN buyers but in a compromise it was agreed that that the State Treasurer would have the power to negotiate a deal. The Legislature retains the right of approval, but likely will face a “take it or leave it” proposition from the governor who controls the money spigot. At least the governor has shown some degree of compromise. Senate President Stephen Sweeney said that NJN could get the additional funding it needs to stay on the air while lawmakers and Gov. Chris Christie come up with a plan.” Nonetheless, this “Perils of Pauline” tale continues.

Arbitration Awards

Governor Christie, who has been pushing his “Tool Kit” as a solution to high property taxes, now is quoted in the hard copy Record (page 8) of today, as saying, “There’s no silver bullet to fix it.” Thank you Mr. Governor. Christie had wanted the arbitration cap to include pension and health benefit costs, over which local entities have little control. The cap compromise excludes these two costs, allows for increases above 2% in multiyear contracts if the overall increase does not exceed 2%, and calls for the limits to go away after three years. The governor secured less “wiggle room” to fudge the cost basis of the cap and a random selection of the arbitrators. As a result Police and firefighter union contracts would be limited to 2 percent annual pay increases if they seek arbitration, although arbitration is not even available in many municipalities.

The nexus between AC and horse-racing

In order to prevent war between the North and the South spilling out into the chambers of the legislature, those supporting initiatives for Atlantic City are also agreeing to benefits for the horse-racing industry. An Assembly committee yesterday voted to legalize casino internet gambling, including on-line poker, with the understanding that as much as $30 million in tax revenue would be used to subsidize horse-racing. Nearly a dozen bills designed to revive the state horse racing and Atlantic City casino industries drew bipartisan support in a key Assembly committee in Trenton on Thursday, as legislators raced to send many of the bills to Governor Christie’s desk before the end of the year.

Property Taxes On Our Mind

“The single most salient fact of New Jersey politics is the state’s high property taxes … and a populace forever perched on the edge of tax revolt – 3.9 million filers, wedgie’d and wet-willied by the state, screaming for relief.” – Jason Fagone: Is Chris Christie A Mad Man?

Unlike with Alka-Seltzer, relief is not “just a swallow away.” A Monmouth University poll confirms that people “feel wedgie’d and wet-willied by the State,” and are pessimistic about property tax relief. Negotiations between Senate President Sweeney, Assembly Speaker Oliver, and Governor Christie are ongoing but will not produce a panacea. Governor Christie’s approach rather than solving the problem has simply postponed it. As the NY Times pointed out on Saturday, “It is the long-term problems of a handful of states, including California, Illinois, New Jersey and New York, that financial analysts worry about most.”

The Monmouth September poll indicates 66% of respondents find it difficult to pay their property taxes, and 62% say these taxes are the least fair. When asked “How likely is it that the state will enact reforms in the next few years to significantly lower property taxes,” 22% say “likely” and 75% say “unlikely.”

Few people view the “tool kit” as a real solution. Sen. President Sweeney has said, “The point is (the tool kit) is not going to be the end-all.” Local officials say they “are angry the state’s most powerful elected officials rushed into a 2 percent property tax cap without giving them the tools to curtail taxes first.” As the Asbury Park Press, which supports the Tool Kit, says, “Christie never claimed his tool kit would usher in a low-tax utopia. He is simply trying to make the state more bearable for taxpayers.” More bearable is nice but not a soluton.

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The “Tool Kit” and the Legislature

On Thursday a somewhat tepid Assembly Bill 3393 cleared the Budget Committee and was scheduled for a floor vote yesterday, but something happened on the way to the chamber. Past Blue Jersey diaries and numerous articles have pointed out excesses in police and fire contract arbitration procedures which have led to high salaries. Governor Christie has been insisting that a hard cap is the only real way to control salaries for municipalities. The Democratic Assembly Monday appeared in disarray.

The Assembly bill provides measures to reduce such police and firemen arbitration excesses, but it does not include a cap. During a Statehouse news conference on Thursday, Assembly Budget Committee Chairman Louis Greenwald, Senate President Stephen Sweeney, and Assembly Speaker Sheila Oliver set out their version of a program that would fix the system and allow for more “creativity” and “flexibility.” However, Essex County Executive Joseph DiVincenzo said, “Assembly Bill 3393 is weak and offers nothing to reform this broken system,” Democratic Elizabeth Mayor Christian Bollwage said, “The Democrats’ attempt at reform does not go far enough,” and Cory Booker has long supported a hard cap. So between Governor Christie, mayors and county executives the bill is now in abeyance. The Democratic Assemblypersons need to regain their mojo. Also the fact that two of them are employees of DiVincenzo and others hold multiple government jobs further complicates the matter.

Christie has been goading the legislators to move more rapidly on his “Tool kit,” while they have insisted on a more measured pace. So far they seem to lack a coherent vision on how best to approach arbitration and the larger issue of reducing costs for municipalities. And now they face the ire of county and city leaders. After the vote was cancelled, Speaker Oliver said “The Assembly’s goal in advancing this bill was to at the very least begin an intelligent debate.” That’s OK, but hopefully Democratic legislators will soon get beyond debate and develop a clearer strategy.  

Although the issues involved are numerous, it is the police salaries which captured a lot of attention. To find out the median salary of police officers in your town, the number of officers there, and the per cent who make $100,000 or more scroll down on this page link. In Teaneck, for example,  the result is $97,486 – 93 – 33%. My County Executive McNerney has been a long-time supporter of sharing and consolidating services, but even this approach is not a complete solution and needs its own better tool kit.