All three pension/health-care-benefits reform bills (S-2 Text and S-2 Statement, S-3 Text and S-3 Statement, and Senate Bill S-4 Text and S-4 Statement) passed today by votes of 36-0. I understand Turner, Rice, Allen and Baroni are the four non-voters. Click on the "Text" link to see the full legislative language or the "Statement" link for a more comprehensible summary. S-2 limits new enrollment in the pension system to full-time employees working at least 35 hours a week. Part-time employees making $5000 are eligible for a Defined Contribution Retirement Program, i.e. something like a 401(k). Benefits for future participants also go back to the old 1/60 formula. If you have multiple jobs, only the best counts towards the pension. Under S-3, current employees will have to contribute 1.5% of their salary to their health benefits, and newly hired employees will have to contribute 1.5% of their pension when they retire. S-4 limits sick leave payouts, you'll remember the recent outrages over some very large payouts.
Note that the most interesting reforms apply to future participants in the pension system, if you're already in the system you evade most of these reforms.
With 36-0 votes, we need to include both Republican and Democratic quotes, so here goes:
"These reforms are necessary to restore New Jersey's long-term fiscal footing and return sanity to a pension and benefits system that was allowed to spiral out of control," said Senate President Stephen M. Sweeney (D-Gloucester/Cumberland/Salem). "Without these changes, the state would soon have no option but to break its promise to career public servants."
"New Jersey's pension system is on life support," said Senate Republican Leader Thomas Kean (R-Union/Essex/Morris/Somerset). "If we don't act now, it will be too late to avoid a crisis that would be costly to both taxpayers and government employees who depend on the system. These are common-sense reforms that have bipartisan support."
One imagines that future State Senators will have to get their health benefits from their full-time job, unless there is a loophole somewhere.
Thurman Hart used to post a New Jersey blog roundup from time to time, and I thought I would try my hand at reviving it. Also, this is your opportunity to tell me about blogs to bookmark. There's not much going on in the Congressional district blogs, so this week's theme is the state budget and economy.
Route 55's Mark Krull promises to cover any public hearings on NJ Transit fare hikes: "I know from riding the bus EVERY DAY that many folks would suffer under a 30% fare hike." His busdriver says the adency is "WAY TOO TOP HEAVY," which is exactly what I heard this week about a nearby school districts from a teacher, and what we professors say about college administrations.
if you take a look just at the Jersey City Incinerator Authority, their meetings are averaging out to 12 hours a year. For this they get taxpayer funded health care. Let's get nutty and say they work 24 hours a YEAR, that's still not worth the cost.
My vote for best post: Thurman Hart calls the 70-odd independent state agencies an "unconstitutional extension of the executive" and tells Christie that's where he should look for cuts. The agencies evade normal limits on pay and benefits.
The [Office of the Inspector General] study found that 748 people in these hidden government agencies have a salary of at least $100,000... I think it's also telling that the OIG report doesn't look at any type of nepotism or patronage. But that is the reason we have so much hidden government here in Jersey. Not only are these authorities seen as a means of handing out patronage and thus maintaining power, they are also a means of taking care of family members who just couldn't get a real job.
The Assembly Budget Committee will convene this morning in Trenton to take testimony on Governor Christie's proposals for closing the Fiscal Year 2010 estimated budget shortfall. You can see from the tenor of the quotes in the release that it appears the Democrats will continue with their response last week:
"Gov. Christie's ill-advised plan steers New Jerseyans toward property tax increases, potential hospital closures and the possibility of higher tuition and transit fares that are no different than tax hikes," said Greenwald (D-Camden). "It also kills job creation. On top of all that, Gov. Christie kept his plan secret and executed it without any public discussion. This is undemocratic and an affront to residents and businesses alike."
You can hear the audio of the hearing which will be streamed live. The hearing starts at 10am. It would be great if the Assembly could give us video of these hearings and committee meetings more regularly as well so the public could see and not just hear what is going on if they can't make it to Trenton.
Before Chris Christie gets used to walking his pugilistic swagger into the Governor's office every day, before he gets too comfortable resting that big thumb on the executive order button, and before newspapers run out of phrases like "martial law" and "we don't even know if it's legal," New Jersey's brand-new governor ought to think about something: 51% of the people in this state did not support him. But Instead of recognizing that and proceeding to work with the Legislature to make the changes he wants, Christie has charged head on in the opposite direction:
But Christie seems to think his blueprint is a sacred scroll. He claims imperial powers for himself and says he needs no consent from the Legislature.
The mandate he is claiming has a Bush like appearance that is eerily reminiscent of 2001 when Christie's mentor came into office. Governor Christie has signed 14 Executive Orders in his first 23 days in office. Let's look at how the new Governor's use of Executive Orders compares to his predecessors:
By comparison, former Gov. Jon Corzine issued three executive orders during the same time period, according to the website, and 167 total during his four-year term.
Former Gov. Jim McGreevey issued five executive orders in his first 30 days, while former Gov. Christie Todd Whitman issued eight in her first 30 days
On the question of whether it's legal, it appears we're headed for a showdown in the courts as Christie embarks on his strategy of governing by executive order and leaving the Legislative Branch to react once it's done. The Republicans in the Legislative branch are enjoying power they haven't had for years, but the Democrats as the majority party in the Legislature are pushing back trying to enforce the separation of powers. It reminds me of the arguments I heard made for the unitary executive when the Bush Administration was expanding their power. Both Thurman and Adam have written about this talking about ideology meeting reality:
But what Gov. Christie is doing is claiming that he can unilaterally change governmental policy simply by refusing to spend funds. It is based on the concept of the unitary executive. It means that the Executive has complete control of the bureaucracy, including the prerogative to simply not spend money deliberately set aside for a purpose with which the Governor disagrees.
In this, Adam might be closer to the truth than he thinks. Nixon didn't use the power of impoundment as described above. He used it to control budget expenditures and to control governmental policy (sound familiar?). Nixon tried to trim roughly 20 percent of controllable expenditures simply by refusing to spend the money. Then he began refusing to spend money on policies he didn't like.
It's all about power and Christie is trying to take as much of it as he can for his office. The Republicans in the Legislative branch are enjoying power they haven't had for years, but the Democrats as the majority party in the Legislature are pushing back trying to enforce the separation of powers. Right now we're on a collision course to the courts.
Thanks, Thurman. Promoted from the diaries by Rosi
By now, nearly all of New Jersey is abuzz concerning Governor Christie's decision to unilaterally freeze state spending. While the war of rhetoric is well underway, the reality of the situation has yet to be determined. Of prime importance in this tug-of-war is the question as to whether or not the New Jersey Governor has the power to do what Christie has proposed.
The general power we are considering is referred to as "executive impoundment" or simply "impoundment." It's one of those tricky things you won't find mentioned in the Constitution anywhere. At the federal level, however, Article II vests the President with all executive power - the power to carry out laws, including spending governmental funds. Based on that premise, the President can therefore choose not to spend all of the money appropriated by Congress.
Gov. Christopher Christie's math doesn't add up, said Josh Zeitz, an aide to the Democrat the new governor replaced 23 days ago, Jon Corzine.
"Even if we accept the governor's revenue projections, his deficit is -- at worst -- somewhere between $739 million and $1.039 billion -- a highly manageable problem when compared to the $4.4 billion budget gap that Jon Corzine closed in 2009," said Zeitz, a former congressional candidate who joined Corzine's senior staff last year.
Budget cuts aside, Christie has already issued a series of Executive Orders, announcements of de facto taxes on the middle class through increased charges for public transportation, and the direct shots taken at unions, agencies and departments all across the state - while being eerily silent on whether he plans on giving a huge tax break to those earning over $400,000 in the form of letting a tax expire on those who need the least help. He has done this under the use of expanded Executive Power - not unlike that of his mentors in the Bush administration.
Being a numbers guy myself (and one who knows new State Treasurer Eristoff from his days with the New York State Department of Taxation and Finance), I tend to be (1) trusting of Eristoff, (2) skeptical of Christie, especially since he likes to admit that math isn't his strong suit and has been caught before taking liberties with facts and (3) dorky about numbers so I like to put my "you are entitled to your opinion but are not entitled to your own facts" theory to test.
So in seeing where things truly stand, I've taken a look at the December budget numbers, the December cuts that Corzine proposed and took, and the January budget numbers to see if Christie is using scare tactics and enact his own "shock doctrine" or if there is merit to his proclamations.
I used three documents from the right hand column of the Treasury web site (all pdfs, otherwise I would link them all), dated 12/22/09, 1/15/10 and 2/11/10. Starting with an estimated $924 million shortfall, there were $839 million in additional spending cuts and $135 million in revenue items - leaving a temporary proposed surplus of $50 million, on top of another originally estimated surplus of $500 million from the original budget (a surplus number which, by the way, was accepted by conservative columnists). The January 15 release indicates that revenues were approximately $39 million above projections, getting to nearly $600 billion in surplus. Finally, the January totals recently released show approximately $57 million below budget in revenues.
But I'll subtract the $300 million in school aid freezes that was included in the $839 million of Corzine cuts, because Christie said Corzine couldn't do that (even though Christie is doing just that all over the place), so that gives a revised deficit of $640 million heading into January (even though Christie clearly can freeze this, and it shouldn't even be considered in the calculation). Then, we can subtract that $300 million in taxes to the super rich that Christie wants to expire, bringing the total to $940 million.
And there you have it - with $300 million in fat cat tax breaks and another $300 million in school funding freezes that Christie has all the power to implement on his own, that brings the deficit back to the more likely $340 million - which includes Christie's own numbers for a full year of additional expenditures.
And here is the word cloud of the Democratic responses Blue Jersey received. Note, for example, "Cuts" is a tiny word in Christie's version but huge in the Democratic one.
We have gone down the road of ever higher taxes to pay for Trenton's addiction to spending. What has it given us? 10.1 percent unemployment, a dormant economy and a failure of hope for growth in our future. Higher taxes is the road to ruin. We must, and we will, shrink our government."
I'll keep posting reactions in the other post but Senate President Steve Sweeney's reaction is remarkably negative:
"So much for a handshake.
"Governing by executive order and keeping plans secret until the last minute is not bipartisanship.
"Sure, these cuts will close the budget gap, but they do so in an irresponsible manner.
"Voters sent a clear message last November that they want smaller, more responsible government that is focused on its core responsibilities. These cuts don't even begin that job.
"Instead of using the state's current surplus to protect property taxpayers, he is simply plowing under the small, middle-class districts that have been carefully watching their budgets.
"His cut to hospitals will be doubled by the loss of federal matching aid.
"The Governor has a month before he will present his budget for next year.
"Hopefully, he'll remember what he promised during his inauguration and actually look to the Legislature as an active partner in governing, not just a studio audience."
Update by Hopeful: Reactions from legislators are posted in comments. Republicans are supportive, Democrats promise a "long, hard look."
Chris Christie will be addressing the legislature today and is expected to describe how he will close this year's budget gap. The speech is scheduled for 10:30AM and we'll live blog it.
Gov. Chris Christie will declare a state of emergency in a major budget speech today, laying the groundwork to make a range of cuts that will include $475 million in withheld state aid to schools, according to people familiar with his plans...
Christie will introduce $475 million in cuts to school funding to more than 500 school districts, a move he will not need legislative approval for, according to a Democrat who was briefed by Christie administration officials Wednesday night.
More furloughs, however, are not expected.
You'll remember that Corzine had proposed cuts to state aid in December, but thought he needed legislative approval and didn't get it by the time he left office.
President Barack Obama's federal budget includes no money for the planned deepening of the Delaware Bay and River shipping channel.
U.S. Rep. Rob Andrews, D-1st, asked Office of Management and Budget Director Peter Orszag last month that Obama seek no funding for the project, which would deepen from 40 to 45 feet the channel that runs from the Delaware Bay west of Cape May to Philadelphia. Obama included no such funding in the federal budget released Monday and also called for about a 10 percent cut to Army Corps of Engineers' discretionary budget.
No doubt Ed Rendell has already been on the phone to the White House. The Corp says that they get funding through many sources, so the lack of money in the budget isn't that big of a deal. Congressman Andrews still wants the GAO to take another look:
"What you need is a neutral, competent auditor who takes a look at this," Andrews said.
I don't know if he's going to get GAO to get a separate look. He may have better luck blocking funding to finance the project as seen with this budget. The Corps still seems confident they can work money through the system from somewhere else to complete the project.
The Assembly Budget committee convened yesterday and heard testimony from David Rosen, the Legislative Budget and Finance Officer with OLS who tried to clarify where the state stands as we move forward:
Through the end of the year, the state is looking at a $2 billion deficit from revenue and spending - though April's income tax collections could swing the results wildly in either direction, said David Rosen, the budget and finance officer for the Office of Legislative Services, which works for the governor and Legislature.
David Rosen, center, Legislative Budget & Finance Officer for the Office of Legislative Services, addresses the Budget Committee about the current financial situation in New Jersey today.
Still, Rosen said that while he has not seen exact figures, Christie's estimate of a $1.3 billion revenue shortfall on the $29 billion budget is possible, as is a potential need for more than $668 million in extra spending.
"It's not an unreasonable number to have on the table for an estimate," Rosen said at an Assembly Budget Committee hearing when asked about Christie's figures
This has been a constant back and forth for the last week between Corzine and Christie an apparently they're still not willing to agree because Corzine took Rosen's testimony as validating what he had said:
"Today, OLS confirmed what we already knew: no one will really be able to predict revenue for the remainder of the year until April's income tax returns come in. That is why OLS has not issued its own projections," he said. "To suggest that Dr. Rosen independently confirmed Gov. Christie's revenue projections is a clear misreading of his testimony. Dr. Rosen drew a clear distinction between the operating budget, which is in surplus, and long-term projections, which remain a matter of pure conjecture. We all want to give the administration time to get on its feet. But it's important that they stop misrepresenting the current balance sheet, which is very much in the black because of Jon Corzine's record of fiscal responsibility.
So it looks more like the Corzine camp is more concerned with what they actually say about the former Governor. Here is some video with comments from Legislators on the committee:No matter what they all say, it's not a pretty picture and there are going to be plenty of difficult decisions that lie ahead.
Right now, Governor Christie and former Governor Corzine's administrations are arguing over the finances and just how bad things are. Here is a recent exchange over the budget:
Just 48 hours into his new role, Gov. Chris Christie said New Jersey faces a $1.3 billion shortfall in the current budget and blamed former Gov. Jon Corzine for setting him up to fail by hiding the depth of the problems.
"He was trying to make it as hard as he possibly could," Christie said. "Avoidance of the facts and avoidance of the truth was a staple of the Corzine administration."
Corzine and his advisers accused Christie of pulling numbers out of thin air and insisted they left the incoming governor with a $496 million surplus.
"Gov. Christie's remarks demonstrate a poor temperament, and a casual relationship with the facts," said Corzine spokesman Josh Zeitz. "Being governor entitles you to do a lot of things, but fabricating budget numbers from whole cloth isn't one of them."
Wait, Christie has been railing about how bad the state is and now that he gets there he is saying Cozrine is setting him up to fail? If Corzine had set him up with the state in a good position, he'd probably still be the Governor himself. Star Ledger Cartoonist Drew Sheneman likens it to a fight in the sandbox in his latest cartoon:
Sheneman says he can't wait for the hair pulling. The question at this point isn't whether things are bad, it's how bad things are. The Assembly budget committee will hold a hearing on the budget tomorrow, so we may learn more.
Oh, this is going to be fun. During the campaign candidate Christie had to defend comments that he would turn down federal stimulus dollars. But now as he searches the cushions in Drumthwacket in case the Governor left any extra change for the budget, Governor-Elect Christie seems to have come up with a new plan... Blame the Feds:
Gov.-elect Chris Christie has called for restructuring state government - through layoffs and eliminating departments - to help provide the funding that will pay for routine maintenance work.
He emphatically ruled out raising New Jersey's 14.5-cent-per-gallon gas tax - the fourth lowest in the nation - to produce more revenue for the trust fund.
"Maybe we don't do as many projects," Christie said. "It may be that Sen. (Robert) Menendez and Sen. (Frank) Lautenberg have to get much more effective than they've been in bringing federal dollars for these kinds of projects."
There's no question that things aren't in good shape. But when you tie your own hands, you can't complain if someone doesn't cut you out. Be prepared because now it will be the fault of Senator Menendez and Lautenberg that the new Governor is unable to live up to the promises he has made.
A very close vote went down last night to pass the new jobs bill in the House of Representatives. Basically the bill is redirecting unused TARP financial bailout money to jobs programs. The 217 ayes, without a single Republican, tells us Democratic leadership lost a lot of Blue Dogs and freshmen on this vote:
The sight of Democrats standing in opposition to spending on job creation with unemployment over 10 percent struck an angry Rep. Charlie Rangel (D-N.Y.), chairman of the Ways and Means Committee, as reason to ask where the party stands. "We may have to take a reevaluation," Rangel said, "of Democrats."
The Washingon Post, however, says the action is symbolic since the Senate won't act until next year. That's too bad, because it is exactly what New Jersey needs:
The Pelosi-backed bill would provide aid to states to prevent them from having to lay off teachers and other public employees and billions to support rebuilding highways and other infrastructure projects.
Maybe Governor-Elect Chris Christie should phone up his Republican Congressmen and tell them to read that quote, because I read yesterday that he wants more federal money for highways.
Oh, how did New Jersey vote? The votes are here and freshman John Adler split again with Democrats and opposed the bill, presumably on the grounds that he cares more about the Federal deficit than either New Jersey's deficit or unemployment at over 10%. Let's hope he gets the praise from the right he desires, because it looks like he's not getting it from me or Charlie Rangel.
To help close an unexpected budget gap, the state plans to withhold $20.7 million in aid payments to municipalities, a move that could force cuts in service or higher property taxes, according to three legislative sources briefed on the move.
The decision to place the final aid installment in reserve rather than distribute it to towns is expected to be announced by the Corzine administration Tuesday along with other budget-trimming moves, according to the sources, who requested anonymity because they were not authorized to discuss it.
The payment represents 5 percent of the total annual aid authorized for municipalities under the Consolidated Municipal Property Tax Relief Act. But that is enough to throw into turmoil the budgets of more than 400 towns that prepare their budget on the calendar year schedule, forcing them to scramble for last-minute cuts, said William Dressel, executive director of the state League of Municipalities.
Here is more on the impact of the move and some further reaction to it:
Of the 421 towns that adopt budgets on the calendar year schedule, 243 receive more than $100,000 annually in CMPTRA aid, Dressel said. The city expecting the highest payment today is Newark, at $3 million, Dressel said. A spokeswoman for Newark Mayor Cory Booker declined to comment last night.
David DelVecchio, mayor of Lambertville, said the state was abandoning the promises made to cities and towns.
"The state made a commitment, and the state's walking away from the commitment," said DelVecchio. "This has never happened. We've had aid go up, aid go down, but we've never had aid cut back once it was committed."
We'll have to see what other budget trimming moves the Governor announces tomorrow, but this is sure to send local officials scrambling and make them lose some sleep.
Quinnipiac has put out a new poll with the headline New Jersey Voters Say 3-1 Freeze State Worker Wages, Quinnipiac University Poll Finds; Voters Back Layoffs Almost 2-1 . I think there's much less news there than Quinnipiac suggests by the headline, as it is simply a fact that the supported policies were followed by Governor Jon Corzine and will be by Governor Chris Christie. The good news, such as it is, is that the public does believe in the crisis, with 83% saying the budget problems are "very serious," and another 14% going for "serious." So Governor Christie, it would seem, would have support for strong measures, but the sad truth is that the government is already trying all the policies in the poll, and disapproves of the people who tried them.
The most popular positions according to the poll would be to freeze state workers salaries, have furloughs or layoffs, and -- if it were necessary to raise taxes -- raise tolls and sales taxes. Voters want to protect education spending. But can you believe the voters? Those positions are also, of course, a pretty good summary of Governor Corzine's policies and he is getting hammered with only 31% approval. The public even says "tax rebates" should be kept the same -- though whether they mean the same as after Corzine's cuts could be questioned, I suppose.
You might point to the layoff result that Quinnipiac boasted about, but for the reporters who only read the headlines, the statement "Voters Back Layoffs Alomist 2-1" is false, because the question getting 2-1 support was actually "To help balance the state budget do you support or oppose - layoffs or furloughs for state employees?" So sadly they only asked about existing policy rather than a new, controversial one. Still, there's no doubt that state workers find themselves in a very weak position in negotiations, with little support from the public and a real budget crisis. I've heard that Christie has already asked the unions to take 24 furlough days next year.
I just listened to Governor Elect Chris Christie's victory speech, where he pledged to "turn Trenton upside down" and, among other things, focus on "cutting onerous regulations".
As I wrote previously, I believe that these are traditional conservative republican code words for slashing DEP employees and rolling back environmental regulations opposed by corporate business interests.
So, my pledge to you Mr. Christie, is that we will be very closely monitoring what you do at DEP and to the body of environmental and public health protection regulations.
As you move into transition planning (hopefully a transparent and balanced process we volunteer to participate in, but doubt your interest in appointing our expertise), we remind you of some basic facts:
1) taxpayers pay less than 2 tenths of 1% of the State budget to fund the operating budget of DEP. This implements the polluter pays policy. There is no taxpayer savings to be had by further slashing DEP budgets. ONLY 24.7% of DEP's FY 2009 $230 million operating budget, just $56.81 million, is paid by taxpayers from the state general fund. (read DEP budget here);
2) numerous studies show that the benefits of environmental and health regulation far exceed the costs;
3) numerous studies show that pollution imposes massive public health and ecological costs of NJ residents and the economy;
4) DEP and enforcement of environmental regulations have had no impact on the current economic recession, which is driven by collapse of the financial system, not "onerous regulations";
5) almost all DEP programs are federally funded, federally enforceable, and/or federally delegated. NJ is currently not in compliance with many federal clean air, clean water, safe drinking water, and toxic site cleanup requirements
6) the people of NJ strongly support enforcement of environmental and public health protections, on a bipartisan basis.
(and the two south jersey republican who called for elimination of DEP lost)
Last, I hope the NJ Environmental Federation was listening closely tonight - and wonder how well they will sleep.
Promoted by Jason Springer: This is going to have to be njnewsgrrl's parting shot for now. We wish her the best of luck with the new job.
I have a very dear friend who has been a state government employee for nearly 25 years. We had dinner last night to catch up, and she told me that, in addition to battles with her ex over child support and child care, her salary has been frozen for three years and she can't make ends meet. The furloughs make the situation even worse.
(Side note: A federal judge ruled yesterday that furloughs in Prince George's County, Maryland, violate the U.S. Constitution. Keep an eye out for a ripple effect here in Jersey - you know the CWA will be all over it.)
And then came the kicker. My friend told me that, while civil servants are suffering financial repercussions from furloughs, wage freezes and hiring freezes (which means more work for less money), the Legislature approved a 15 percent salary increase for political appointees.
I don't know any more than that. But what I do know is that politicians loooove to badmouth state government employees because it's easy. Everyone has had a bad experience at the DMV or with jury duty. And the stereotypes about lazy government employees don't exist for nothing. But there are some people who are very good at what they do and who work very hard. And I'd tend to guess that the lazy bottom-feeders are the exception, not the rule.
But what never happens is finger-pointing in the other direction -- at themselves. Because that's where the real problem lies. The Legislature spends like drunken sailors with all of their Christmas tree projects to keep their donors and political benefactors happy. They give powerful lobbyists whatever they want. And, more than anything else, they will bend over backward to save their own jobs over doing the right thing, which generally means writing a big fat check.
On top of all of this, Chris Christie is promising to lay off state workers in order to balance the budget. Did he even for a minute consider cutting the salaries of political appointees or reducing the number of political appointees in each agency? You know, the same guys who he used to brag about indicting for not showing up to work? Of course not!
Christie's policies are so appalling that my aforementioned friend, who is a conservative Republican and worked in the governor's office in a Republican administration, will not vote for him. She knows the truth: The careless, self-interested fiscal habits and policies of the Legislature and of the Republican nominee for governor hurts good people who are simply trying to raise their children and do their jobs. And it has to stop.
This is going to be my last post for a while. My new job requires that I be strictly apolitical, so I have to give up blogging and Tweeting in about a week. Thanks everyone for the feedback and support!
