Tag Archive: cap

2% Cap Plus Federal Grant Equals Bust

As I read the federal governments eagerness to distibute grant money to states and municipalities, I wonder the impact it will have on NJ budgets as it relates to the 2% cap.  As I understand the cap law, a budget cannot increase more than 2% per year, barring the exemptions (health care, pensions, ect..).  To my knowledge there is no exemption for grant money.

Lets say you have a 2010-2011 budget of 10 million. If a school board was to receive $250,000 in federal assistance, the NJ cap law would be busted. The school board would not be able to accept the money unless they had voter approval (which takes too much time and would be impractical in this instance)

Am I wrong here?  Is the legislature going to make another exemption for federal grant money? Another problem in receiving grant money is that if you were to receive a one or two year grant, the cap law allows no function to build reserves during the grant period so that when the grant ends, there is no practical way to sustain the hires that were aquired during the grant years without a significant tax increase in the end.  I know Senator Sweeney was working on an exemption for reserve money, but I think it went nowhere.

2% Panic

A story in today’s Times of Trenton


has a bunch of Mercer County mayor’s sweating the new 2% cap.  It is funny to read the quotes as the mayor’s try and artfully dodge offending the governor while simultaneously crapping their pants worrying about next years budget after just slashing and burning this years budget.  My initial thoughts reading this article are, why did mayor’s stand next to the governor and wave the cap flag without thinking it through?  Are they that wrapped up in party politics?  Are they lazy or dumb? Both?

Now the mayor’s and the League of Municipalities are shouting they need the “tool kit”.  The tool kit is just as much a farce as the cap.  Most of the tool kit is unconstitutional.  The legislature seems to be in no hurry to discuss the tool kit, and many legislators have said they have serious problems with a lot of the “kit”.

There are many towns in NJ like Upper Freehold Township, Monmouth County.  UFT has no police department, has about 6 paid fire fighters (whose salaries are well below state average,  have never taken the town to arbitration, and have only had a contract for about 7 years), a handful of DPW employees, and your standard municipal building employees.  UFT is not a civil service jurisdiction. UFT has slashed and burned their budget this year, including layoffs, furloughs, and service reductions.

My point is that UFT has not been subject to arbitration awards, they are not civil service, the council tends to be mostly republican, they provide very few services (no garbage collection, police), but have found themselves in the same boat as every other town and city in the state.  

The “tool kit” is another sham by the governor.  Another policy that will erode the quality of life and  government in this state.  I predict only a handful of the “tools” in the “tool kit” will become law.  The legislature will be forced to add more exemptions to the cap law after disasterous consequences occur.

The governor needs to address the overpopulation of municipalites and taxing authorities in the state, this is where efficiencies will be located.  The current policies do nothing to solve problems.  The cap will force municipalities to go to an a la carte system of taxing, and will actually lead to more government in NJ as mayor’s try and ditch departments within their municipality and turn it into a taxing authority to avoid those numbers showing on their books. Christie is chopping off his nose to spite his face.

Family Planning, the 2% Cap, Privatiztion – Another Hot Week In New Jersey

Family Planning $s: We’re still waiting (and the women of New Jersey are waiting) for the Governor’s signature (or veto) on the revenue neutral bill to restore $7.5 million to family planning centers who provide health care to 135,000 uninsured or underinsured families. Funny how Mr Christie came right out of his office when Senator Sweeney delivered the more than Millionaires Tax to him.  Came right out with pen in hand, and cameras rolling to veto a bill which would have removed a tax break for 16,000 of the most wealthy in New Jersey, but would restore much needed dollars to lower and middle class families. So far with Assemblywoman Linda Stender, we have collectively made three trips to his office! We can only guess that in the Governor’s world, women are not so welcome, nor is their health care a “priority”.  I’ve asked at least twice for him to correct that impression if indeed he was misquoted.  Guess he wasn’t!

Thanks to Jay Lassiter for bringing the video right to the Blue Jersey audience. His chronicles are great!

Today the Assembly will consider the 2% cap “compromise”. I know there are those among you who thought some of us should have made more of an issue of this. But I actually think that the Senate President made a pretty good “deal”. Truth is that the Governor could have vetoed the 2.9% cap which we passed, reduced it and sent it back with no exceptions, except for debt service and capital expenditures as he first requested. We did get two big cost drivers out of the cap (health and pension payments) and most important, made him back down on his constitutional amendment demand. Do I wish it had been done more in concert with Assembly Speaker Sheila Oliver – yes I do! I’ve expressed that directly to the Senate President. We need a little more cooperation between the democratic leadership of both houses and a little less ego! Time for a few more joint meetings between the two and more communication! The “term” leadership also includes our two Democratic Majority Leaders. Comon, Guys & Girls, we can’t afford so much sniping. We all know who we need to be fighting- and it isn’t each other!

Speaking of “who”, the Assemblywomen will be taking their turn for a press conference (right outside the Governor’s office) this morning on the family planning bill. It will be our fifth one, and each time one of our houses is in session, we will each take our turn until the Governor comes out and either signs or vetoes this important women’s health care bill. Thanks to so many of the good democratic guys who came out in support at this past Thursday’s press event.

Privatizing government: This is more of the same from the Christie administration. Undermine our public school system, our public employees, our public TV network, and then parcel out government to private industry. Is that like the private industry successes of the Parsons’ Adventure or EnCap or Xanadu?  But the most appalling point I read about the report was that the government should get out of the pre-school business and maybe increase class size from an average of 15 to 22. I have not seen the whole report and will today, but if that note is correct, I guess Christie is planning to make one of his campaign comments into a self-fulfilling prophecy – “Pre-School is Baby Sitting!” Then of course, if we privatize government, we can really cut taxes and just charge “user fees” to everyone. You can bet these ideas will be fought by some of us (and I think the majority of us) with full battle gear.

Senate Health Committee meets on Monday, July 19.  We’ve invited Health Commissioner Dr. Alaigh to meet with us, and we’ll have lots of questions on family planning centers and where these women will receive their health care. We’ll also be doing a few bills including establishing a commission to oversee policy on the issues and treatment surrounding aphasia which is the speech difficulty resulting from a stroke or traumatic injury. This disability affects thousands of New Jerseyans and needs more spotlight on treatment and support.  

Keep your voices heard!

Sheila Oliver was shut out, but won’t “stand in the way” of the property tax cap deal

At the start of the Independence Day weekend, Senate President Sweeney and Gov. Christie stood at a podium and announced an accord on their very different property tax cap proposals. Notably absent was Assembly Speaker Sheila Oliver who said during the final hours of negotiation that she wasn’t part of any closed-door deal. And in fact, she actually left the state house before Christie and Sweeney’s joint press conference. That left a lot of people wondering what she might say or do when she came back to Trenton.

But this afternoon, Oliver now says she won’t “stand in the way” of the agreement to lower the property tax cap from its current 4% to 2%.

Oliver also talked about why she ditched the much-heralded press conference Saturday. It was because the two men had already hammered out a deal before consulting her:

Why should I participate in a photo op for something I know nothing about? [snip] I wasn’t upset. I won’t call it upset. I just felt that the General Assembly as an institution … should have been afforded a little more recognition in terms of the protocol of how government works.

How does that make you feel about Trenton, Blue Jersey?

Budget Cap Agreement Press Conference

Governor Chris Christie, LG Kim Guadagno, and Senate President Steve Sweeney have just finished a press conference to announce an agreement on the property tax cap agreement reached this afternoon. Also at the podium were Senate Minority Leader Tom Kean, Jr. and Assembly Republican Leader Alex DeCroce.

Update: NJN’s feed of today’s announcement is now up & viewable.

Notably absent was Speaker Sheila Oliver, who all day via a spokesman signaled her distance from the agreement, including a release today saying she was “not part of any closed door deal.” In fact, to a reporter’s question about the Speaker’s absence from the kumbaya moment – if indeed it really was one – the Governor said she had left the state house.

The agreement, announced at the Governor’s office, is being called a “hard cap,” but there are exemptions: health care costs, pension costs, debt service and capital expenditures, and emergency allocations. I’m also told that increase in school enrollment is exempt. Local voters can overturn and exceed the cap by 50% plus one vote – a simple majority vote.

Here’s the way they’re going to get there: Sweeney’s own 2.9% cap legislation, the already passed S-29, will be the starting point. There will be a conditional veto of that by the Governor and the rate will be statutorially capped at 2%. Sweeney will post the Governor’s conditional veto for a vote in the Senate on Thursday, July 8.

Local officials who budget beneath the cap would be able to “bank” the difference for three years. All other exemptions in the current 4% cap law would be eliminated under the new legislation.

An avalanche of press releases began arriving even before the press conference ended, with the jubilant Republicans definitely speaking out first. I’ll post some of the statements in Comments, below.

Speaker Oliver will apparently be meeting with her caucus. Nobody wants to infer more drama than there actually already has been. But I imagine there may be shoes yet to drop.  

Sweeney’s letter to Chris Christie

Senate President Stephen M. Sweeney Wednesday night sent the following letter to Gov. Chris Christie:

Dear Governor Christie:

I am in receipt of your letter dated Monday, June 28, 2010, directing the Legislature to meet in special session on Thursday, July 1, 2010, for the purpose of undertaking discussion related to property taxes, including on the measures that constitute your “tool kit” for municipal and school administrators and a proposed cap on property taxes.

I appreciate your willingness to convene further consideration of options to control property taxes in New Jersey. It is my hope that you will sign the legislation recently approved by both houses that will significantly lower the current statutory cap and eliminate the waivers to this cap. But I recognize that all options require due consideration, deliberation, and compromise.

To that end, I am directing the Senate to meet at 3 p.m. Thursday to begin immediate discussion on your proposals as well as other proposals members on both sides of the aisle have to address our state’s property tax crisis.

I would welcome you to the Senate to deliver remarks at approximately 6 p.m.

Property taxes and the state’s fiscal integrity are matters of great concern to all New Jersey residents. This Legislature will confront these issues in a manner that will ensure fairness to the taxpayer and preserve the quality of life for all New Jerseyans. The residents of New Jersey deserve nothing less.


Steve Sweeney signature

Stephen M. Sweeney

Senate President


Holy C(r)ap!!!

In what can only be described as a short sighted reaction to short sighted action, Democratic legislators are introducing their own version of a property tax cap, which has a few more bells and whistles than Governor Christie’s hard cap/constitutional amendment.  

The problem with both versions is that they don’t address the root issues and will likely result in more service cuts than administrative savings.  The problem with the Democratic version is that it ALSO fails on a political level – it takes a losing idea that is merely a band-aid on a gunshot wound and legitimizes it, but tinkers around the edges and puts a different color bow on top.

A few days ago, Murray Sabrin had an article in the Record that talked about that dreaded “c-word” (no, not that one) – consolidation.  And while I don’t necessarily agree with a lot of the substance of his article, we have been talking about it here at Blue Jersey for a while.  And quite frankly, without some form of consolidation – whether it be duplicate services in adjacent towns, overly bloated administrators (both on the county and local municipality and school levels) or unnecessary costs (I’ve talked about having a Village, County and State police force as a bit of overkill, for example) – any form of cap will be window dressing.

Over the past couple of weeks, there were two interesting articles that basically confirmed this view.  The first, from the Center on Budget and Policy Priorities, hits the nail right on the head on a “one size fits all sledgehammer approach”

Moreover, the Manhattan Institute report looks only at one area of local public services: education. It ignores the host of other problems Proposition 2 ½ has caused in towns across Massachusetts – from deteriorating roads to poorly lit streets to longer police and fire response times.

A state desiring to lower property taxes can figure out the reasons its property taxes are higher than it would like and make specific policy changes to lower costs when it is possible to do so without undermining public services. In addition, it can provide targeted, direct property tax relief to residents, and it can create alternative revenue sources to relieve pressure on the property tax.

In specifically dealing with New Jersey, this report also notes that while Christie is looking to avenge his vendetta against public school teachers (my words, and maybe because of his actions back when a student), teacher salaries is NOT a big factor in higher education costs in NJ as compared to Massachusetts.  In fact, it is the facts that NJ has 591 school districts and spends $1,000 more than Massachusetts PER STUDENT on just school administration costs and maintenance alone.  So tackle these areas – again, mainly areas where shared services could greatly reduce overall costs and property taxes.

The other article, by New Jersey Policy Perspecitve notes that municipal property tax caps have been around for years now, and property taxes are largely driven by the mere fact that it is the sole source of local income in NJ (where other states may have local income or sales taxes instead).

In both instances, it is acknowledged that school budgets account for most of the property taxes, but there is another 40% of property taxes paid that go to municipal and county taxes.  Additionally, services will be substantially and arbitrarily cut as a result of a hard cap.  Libraries, bridges and road maintenance and repair (which, by the way, have already received a “D” grade in a recent report) and many other services will get the axe just to meet some arbitrary number.  

Only by dealing with this in a responsible and intelligent manner will our property taxes be brought under control.  Certain hard choices need to be made – but they should be made without using a bludgeon.  Rather, taking a look at each municipality, each town, and each opportunity to reduce bloat and duplicate costs on a nonpartisan manner will go a long way to permanently addressing the property tax issue in New Jersey.

Anything else is political posturing – and poor posturing by “leaders” in both political parties.

Sweeney Shows Leadership on Property tax cap

This diary produced a lot of comments – 24 so far – and those comments include a referendum on Steve Sweeney, Cory Booker, Sen. Ron Rice, caps hard and soft, North v. South, marriage equality advocates, and anonymous posters like firstamend07. Where do you come down on all this, Blue Jersey? Anything here you want to agree with? Tear your hair out over? Excoriate? – promoted by Rosi Efthim

Governor Corzine had a good idea when he set up a cap on Property taxes. Something had to be done.

Christie took that idea and by once again being a demagogue has tried to set up an unrealistic,unworkable hard cap of 2.5% that will only cause chaos and hardship.

Enter Senate President Sweeney. Once again ,bring the voice of moderation and realism , he looked at Corzine’s Cap idea and looked at Christies Cap idea and came up with a realistic ,workable Cap plan that is rooted in real world problems.


Is his plan perfect ?  Of course not. But leadership is about reviewing problems ,listening to people, and coming up with a workable plan.

This is how Sweeney works. That Is why this State has a high minimum wage.That is why this State has a Paid Family Leave Act. That is why this State enacted fair and responsible Pension Reform .

Like the guy or not he is a leader and he gets things done.