Corzine holds his own with Middlesex crowd

by: kwilkinson

Sun Feb 10, 2008 at 07:50:47 PM EST

because Lautenberg is going to get re-elected, retire after a year, and Corzine will again be in the position of appointing a senator.  It will save them from having to spend on a campaign

I came in at the part with the pie charts showing how much we're paying to service the debt (p 9 of 28 according the power point presentation on his website).  The crowd 'cat-called and booed' as much as was described from the earlier GOP county townhalls.  I'm always impressed with a politician's ability to insist on 'civility' and to some extent get it.  When the one guy's screaming, and others start yelling at him to shut up (including the guy next to me), the hostility level gets pretty high, and I tend to get a little queasy.  

As already reported, tolls on 440 are off the table, 'thanks to your Mdlsx legislators,' and general outcry, he said.

He was asked a question about de-federalizing the National Guard so they wouldn't have to go back to Iraq in June.  He doesn't believe he can do that, or at least he says NJ would give up even more money that should come back from the federal govt, since in general we only get about .55 for every $1 we send to DC.  He also commented the last time he got booed at a townhall this much was after he voted against the war.

I found him persuasive on the idea that he will listen to concerns and other ideas, but that he is not going to 'kick the can down the road' and put off facing up to the debt problems in the way that has been done before for political expediency.  It is certainly looking like he is calling his re-election into quesiton with this plan.  He claims to be the first gov (since this problem began?) to start taking benefits off the table -- though if I recall he wasn't as successful with this as he hoped to be last year.

People seemed to be pretty pissed at teachers.  One retired E. Brunswick teacher talked about her starting salary of $4,500 (some years ago) and being told that they were working for so little but would have benefits.  Corzine stressed he will honor the obligations that have already been made.  

One truck driver claimed that the warehouses that give truckers work are threatening to move out of state if the tolls go up.  Corzine didn't buy it.

He wasn't averse to a woman's suggestion to put billboards at the 30 state-run motor vehicle inspection stations.  Billboards are already part of the plan to keep tolls below the maximums set.

The crowd struck me as not all the familiar faces that you'd see at a political event.  Rush Holt was there but didn't speak, as were Barbara Buono and Jun Choi.  Choi told me he wouldn't support the plan without amendments.

Corzine's Toll Plan Details Emerge

by: Juan Melli

Tue Jan 08, 2008 at 01:36:00 AM EST

Tolls would rise every four years and be extended to Route 440 as part of the financial restructuring plan Gov. Jon Corzine is expected to offer up in his State of the State speech today, according to individuals involved in crafting the plan.

The Star-Ledger has learned that any new or increased tolls proposed in the plan would not be collected until at least 2010, the year after Corzine would stand for re-election. A source with direct knowledge of the plan confirmed Statehouse reports of a 50 percent toll hike every four years mixed with annual cost of living increases.

That would mean the average Turnpike toll for a motorist paying in cash would rise from the current $1.92 to nearly $10 by 2022. [...]

The individuals involved in drawing up the plan said Corzine agreed to tolls on Route 440 -- five miles of highway between the New Jersey Turnpike and the Outerbridge Crossing to Staten Island -- because 30 percent to 40 percent of the motorists using the road are from out of state.

Monetization Preview

by: Hopeful

Sun Jan 06, 2008 at 12:39:13 AM EST

When he goes before the Legislature on Tuesday, Gov. Jon Corzine will propose raising as much as $40 billion to pull the state back from the financial brink by asking motorists to tolerate higher tolls, according to a top administration official.

a plan that would borrow against toll increases to cut existing state debt in half

Corzine hopes to raise as much as $40 billion with his monetization plan, though the actual amount could be far less. The total depends largely on how the IRS views the technical language in the legislation that lays out the mechanics of a new Public Benefit Corporation (PBC).

Corzine's Monetization Plan Details Emerge

by: Juan Melli

Thu Nov 22, 2007 at 12:58:25 AM EST

Tolls would go up as much as 75 percent in the year 2010, and then 75 percent more on an "every four year" schedule after that. In addition, any inflation would be factored into those increases.

The bottom line, a trip from Bergen County to Newark Airport that now costs $1.70 would be at least $5.20 by the year 2014. A 70-cent toll on the Parkway would be $2.13 that same year. [...]

Assembly Speaker Joe Roberts said that while he wants to see details, he is initially supportive and challenges critics "to look honestly at this idea and if you don't like this, tell me what your idea is."

How the Privatized Toll Road is Working in Indiana

by: Hopeful

Tue Aug 07, 2007 at 10:42:38 PM EDT

During the General Assembly's debate of the toll road sale, there were numerous rallies held to voice support for the privatization scheme. I remember walking in one morning, only to discover that the buses outside had delivered hundreds of union members from across the state. They were there to support what they saw as the perfect opportunity to expand job opportunities in the state, but something just didn't add up....

Unions that were among the greatest supporters of Gov. Mitch Daniels' drive to privatize the Indiana Toll Road now fear construction jobs there may be going to nonunion workers from other countries.

"We are very concerned," said Jim Strayer, business manager for the Northwest Indiana Building and Construction Trades Council. "We are not getting the share of the work that we did before."

The second quote is from The Northwest Indiana and Illinois Times newspaper.

Redundant?

by: Hopeful

Sat Aug 04, 2007 at 10:00:29 PM EDT

But does this make any sense?

On the other hand, if we were to experiment with road privatization, I know exactly where I'd try it. New Jersey has two separate toll roads that each run the length of the state from north to south, the Garden State Parkway and the New Jersey Turnpike. They're fairly close to each other, and would be redundant if not for the fact that the state's traffic needs are so severe.

Isn't there a big difference between ending up in Cape May or Delaware?

Diane Allen Was for Leasing the Turnpike Before She Was Against It

by: Juan Melli

Sun Jul 29, 2007 at 11:12:36 PM EDT

Maybe on opposite day?

In fact, as the Star Ledger reported today, Senator Allen voted in 1999, along with the rest of the Senate and an overwhelming majority of the Assembly, to permit leasing the turnpike and other state assets.

Confronted with the damning news, she claimed she voted for something totally different in 1999. "This is totally different than anything we're talking about now. This bill had nothing to do with selling money-producing assets."

She knows how to splice words, but the truth is she voted to allow the Turnpike to be leased. Let's take a look at the actual text of the legislation (A-2964).

The bill's definition of "assets" includes the state's highways (Section 3):

"Assets" means all property, both real, personal or mixed [...] including but not limited to, land, buildings, [...], transportation facilities, highways, parking facilities [....]

"Structured financing agreement" means an agreement, contract or action taken to authorize, implement and finance a structured financing transaction including, but not limited to, lease and sublease agreements, State payment account agreements, [....]

The State Treasurer is authorized to enter into a structured financing transaction, on such terms, covenants and conditions and at such times as the State Treasurer may determine, to enter into, execute and deliver a structured financing agreement, and to do any act necessary or convenient to carrying out a structured financing transaction [...]

The full roll call for the vote is below. No Senators and only 8 members of the Assembly voted against the legislation in 1999.

Expediency's downward spiral

by: Hank Kalet

Tue Jul 24, 2007 at 11:55:48 PM EDT

In 1994, New Jersey decided to stop setting aside money in a fund to pay for health care for its retired public workers. The savings paved the way for a big tax cut.

Meanwhile, hundreds of thousands of public workers were being told that as long as they worked 25 years, the system would provide virtually free health care for them when they retired, often when they were as young as 55.

No one added up the cost - until now.

It turns out that New Jersey will need about $58 billion, in today's dollars, to provide all the care it has promised its current and future retirees. That's nearly twice the state budget and nearly twice the amount of its outstanding debt. And because of the step it took in 1994, the state has virtually no money in reserve to cover those costs.

Roman History and Asset Monetization(!)

by: Hopeful

Thu Jun 07, 2007 at 07:56:59 PM EDT

Third, Murphy cites massive privatization and its attendant sins, corruption, the loss of faith in government and the degradation of civil society. To my mind, this is the most original and compelling part of his book. "Rome had trouble maintaining a distinction between public and private responsibilities -- and between public and private resources," Murphy writes. When this happens, "central government becomes impossible to steer. It took a long time to happen, but the fraying connection between imperial will and concrete action is a big part of What Went Wrong in ancient Rome." Similarly, "America has in recent years embarked on a privatization binge like no other in its history, putting into private hands all manner of activities once thought to be public tasks." Murphy says that "the privatization of power isn't a phenomenon of the margins, a footnote to history -- it's a central dynamic of American public life."

The result, he argues, is not only corruption, the what's-in-it-for-me mentality epitomized by the sleazy likes of Jack Abramoff, but loss of government's "management capacity." In part this is because private contractors don't answer to the same laws and regulations that government ones do; in part it's because government itself is simply vanishing. The loss of efficiency and command and control is bad, but still worse are the intangible ramifications of privatization: "the loss of civic engagement and loyalty across the board is a very real threat." Murphy declines to explicitly single out the Bush administration, and in a larger sense the small-government ideology of the Republican Party, as largely responsible for this trend. But that does not alter the fact that his book is a blistering implicit refutation of the GOP's anti-government ethos, and the still more degraded crony capitalism practiced by Bush.

There's no reason to privatization ("asset monetize") the highways.  The governor has basically admitted it's just a scheme to raise tolls.  But I think it is true that we pay a price in our culture for the glamorization of privatization.  Why should we contribute to it in New Jersey so that the Governor can pretend he's not raising taxes?  Or perhaps I should just quote one of Murphy's suggestions to revitalize America:

"stop treating government as a necessary evil, and instead rely on it proudly for the big things it can do well ... The Social Security check every month, the safe drugs and highways, the guaranteed student loans, the heath-care safety net in old age, the sandbags when the rivers flood -- their inherent benefits aside, these things promote a sense of common alliance and mutual obligation that dwarf narrow considerations of 'efficiency.'"

News Round-up and Open Thread for Thursday, May 24, 2007

by: Sharon GR

Thu May 24, 2007 at 08:54:16 AM EDT

• A NJ Policy Perspective report shows that the state has lost money by limiting enrollment in the FamilyCare insurance plan, designed for low-income families. According to the study, increasing enrollment and fully funding the program would reduce charity care & emergency room visits and increase federal funds available, which would all lower costs while providing better care.
• Think no one would want to lease- sorry, monetize- Our Fair State's toll roads? Would higher tolls sweeten the deal?
• Speaking of toll roads, the Turnpike Authority is claiming copyright violations in the Internet distribution of a fatal crash video and is suing YouTube and others to stop showing the clip. GS Parkway officials are limiting access to the video surveillance system, which Kris Kolluri insisted is solely for"operational, law-enforcement reasons, not for entertainment value.?
• The State Supreme Court has been under increased protection since some whackjob radio host made their home addresses public last fall. The ranter, who has said "violence solves everything," has yet to be charged.
• NJ has subpoenaed MySpace's records for information on convicted sex offenders. Info on unconvicted sex offenders, unregistered offenders or those using the site anonymously will not be obtained.
• The Oyster Creek nuclear plant will continue to operate despite several low-level safety violations, and has been warned of increased scrutiny this year by the Nuclear Regulatory Commission. A decision on renewing the plant's operations licence for another 20 years is expected around January 2008.
  
• Joe Cryan and Tom Wilson are having a shouting match over financial issues and private email between the Gov and Carla Katz, with Wilson threatening to sue to release the correspondence and Cryan criticizing Wilson's tirade: "Mr Wilson is doing nothing better than engaging in political voyeurism." Sorry- maybe I should have put this in the same category with American Idol that I dismissed earlier; let's call it "Gossipy non-news."
• One more casualty of global warming: our State Flower, the blue meadow violet, may disappear by the end of the century. Many wild flowers will be endangered; 17 other state flowers are threatened, according to a report by the National Wildlife Federation.

PIRG challenges governor on monetization

by: Hank Kalet

Wed May 16, 2007 at 10:30:48 AM EDT

We need to ensure that New Jersey citizens retain control of our Turnpike and Parkway for all future planning, management and development. We need to make sure that if a deal occurs, New Jerseyans get fair value for our roads instead of our budget crisis leading New Jersey to sell at a discount. The process of making a deal must be transparent and accountable. And above all, the people of New Jersey should have the final say in the Turnpike's future safety standards. If a monetization deal can't meet these conditions, embodied in our six principles, a deal must not be done.

Privatization Promises

by: Hopeful

Fri Apr 06, 2007 at 11:21:58 AM EDT

While those concerns are worth considering, opponents of privatizing - or "monetizing," as Gov. Jon S. Corzine puts it - the New Jersey Turnpike and the Garden State Parkway would do well to look at the ports in Newark and Elizabeth and on Staten Island for a glimpse at how public agencies have learned to work with such firms.

Ah, so it turns out that Wall Street companies have been operating seaports, and we have lots of experience to show that there won't be any problems.  So here goes, with emphasis added :

In February, A.I.G. Global Investment Group, an arm of the insurance giant A.I.G., which has never run a port terminal, bought leases to the Port of Newark terminal. The Ontario Teachers Pension Plan Board is awaiting approval to take over the lease to operate a terminal at Howland Hook, on Staten Island, from Orient Overseas International Limited, a shipping conglomerate.

And last month, a division of Deutsche Bank, Germany's largest bank, agreed to buy Maher Terminals, which runs the operations at the Port of Elizabeth in New Jersey and the Port of Prince Rupert in British Columbia.

So far, we have two months, zero months, and zero months experience with how well these deals work.  Wonderful.  This is not evidence at all.
 

Monetization is Coming

by: Hopeful

Fri Mar 23, 2007 at 12:48:54 AM EDT

Gov. Jon Corzine today appointed state Transportation commissioner Kris Kolluri chairman of the New Jersey Turnpike Authority as well as the South Jersey Transportation Authority, a move that may help pave the way for selling or leasing toll roads.

"It has not been a secret that I've been working with the Treasurer" on analyzing ways to turn those highways into cash, Kolluri said. "It helps to have a unified review of what the state expects to get from these assets."

Here's what I think is not a secret.  Corzine intends to push this scheme through despite public opposition.  The details are being kept secret, while we are being told not to criticize since we don't know the details!  This is exactly what happened in Indiana. Oh, and is happening this week in Pennsylvania. 

To Lease or Sell Key State Assets Requires Thorough Investigation

by: mikeshapiro

Wed Mar 14, 2007 at 10:12:27 PM EDT

Recently, Governor Jon Corzine proposed selling or leasing key assets of the State including the New Jersey Turnpike.  The Governor believes the sale or lease of such assets will provide billions in revenue that can be used for a variety of fiscally responsible measures including paying down the State's debt.  However, given the proclivity of politicians in New Jersey to spend every penny they can, it is doubtful that the Governor's plans for the money would be championed by members of the State Legislature.  In addition, the sale or lease of State assets may have negative consequences for New Jersey residents, including but not limited to, higher fees for use of those assets, improper maintenance and delayed repairs to maximize profits, and inappropriate or incompetent management of those assets.

New FDU Poll

by: Hopeful

Wed Mar 07, 2007 at 05:06:59 PM EST

State on Right Track/Wrong Track:  39/47
Jon Corzine Favorable/Unfavorable: 53/30
Lautenberg Favorable/Unfavorable:  53/25
Menendez Favorable/Unfavorable:  36/31
Lease Turnpike Good/Bad:  17/58
Lease Lottery Good/Bad: 20/54

Also, 36% think fraud, waste and abuse are most responsible for driving up state taxes.  (Actually 48%, since 12% choose 'all of the above' from the list of choices.)

Turnpike Numbers

by: Hopeful

Sun Mar 04, 2007 at 02:54:37 PM EST

By contrast, if the state's pension fund ran the toll roads, state government would retain control of a New Jersey asset and politicians could continue to exert some influence over toll increases. Sure, the pension fund would probably need to increase tolls to meet its goal of an 8.25 percent return on all investments. But the toll increase would probably be less than if the roads were leased to private investors whose only motivation is generating higher returns for their clients and themselves.

...

The pension plan also cannot hold "real assets" like bridges and roads worth more than 7 percent of the value of the fund, currently about $77 billion; financial analysts estimate that the Turnpike Authority and the Atlantic City Expressway could be worth as much as $30 billion. That could force the pension fund to team up with other investors to buy the toll roads, as Mr. Corzine suggested.

The relevant numbers are in the New Jersey Turnpike Annual Report.  (As our Op-Ed writer who described the advantages of monetization noted, the 2005 report is most recent.)  So, here are the numbers from 2005 and 1997.  Note that everything is in billions, and I have computed at the bottom the annual numbers need to realize the 8.25% the pension plans wants, and the 4.75% a financial idiot like me could get by lending the money to the United States Treasury.  The debt service is because the Turnpike owes about $5 billion.

As you can see, the Turnpike covers the costs of running this crucial road, and even making a bit extra.  But for it to be a major "profit center" would require a lot more in tolls.

New Jersey Turnpike (billions $)

Item	2005	1997
Revenue	0.81	0.38
Operating Expenses	0.44	0.16
Debt Service	0.24	0.24
Net Revenue	0.15	-0.02
8.25% Target	2.5
4.75% Target	1.4

Turnpike Numbers

by: Hopeful

Sat Mar 03, 2007 at 10:55:13 AM EST

Here's how it would work: The state would estimate how much money in tolls would be collected along the turnpike and parkway for the next 15 years. It would then borrow that amount all at once.

This is consistent with the expert:

Humphreys estimated New Jersey could quickly get $1.2 billion by borrowing against tolls expected to be collected on the turnpike for the next 15 years, though he estimated the state would have to increase tolls a total of 15 percent during that period.

But later the article states:

Any alternative, Abelow said, must prove better than the current situation, in which the state earns $830 million annually from the turnpike and parkway, and has control of the roadway's maintenance and security.

Now, in the U.S., $1.2 billion means $1,200 million, which is nothing like 15 times $830 million.  Are maintenance costs being included in Abelow's numbers?  Is Humphrey's number too low?  What difference does borrowing a billion dollars make?  What's going on?

News Round-up and Open Thread for Tuesday, February 27, 2007

by: Sharon GR

Tue Feb 27, 2007 at 10:08:01 AM EST

• The Assembly Transportation committee held a hearing yesterday to restrict ideas to lease or sell the toll roads in Our Fair State, but Treasurer Bradley Abelow and Transportation Commissioner Kris Kolluri refused to appear; they feel that there are some legislators who want to turn the public against the plan before it's even proposed. Committee chairman John Wisniewski protested, saying they have a right to ask questions. (A discussion of the two sides of the asset monetization arguement are found here and here.)
• School aid should increase at least 3% for most districts under the proposed budget; some may see as high as 18%. Meanwhile, Education Commissioner Lucille Davy has promised to cut wasteful spending and change fiscal policies that result in "questionable practices."
• The Governor has worked out a deal with the NJEA so retired teachers do not have to pay for their medical benefits. As there is no increase in benefits, Corzine said he did not "give anything away."
• In the wake of subpoenas delivered by the FBI recently, Senate President Codey proposed new rules yesterday which would end- or at least make transparent- "Christmas Tree" grants, those last-minute budget requests which get little or no public input and can tack millions onto the budget.
• At the National Governors Association winter meeting, Gov. Corzine threatened to go to court to prevent Homeland Security rules from replacing Our Fair State's stricter chemical plant safety laws. He also voiced criticisms of the federal Dept. of Health's plans for children's health insurance for low-income families, as well as questioned the narrow focus on Iraq to the exclusion of Afghanistan.
• The child welfare system in Our Fair State is improving, according to a report by the Center for the Study of Social Policy. Better case tracking, staff training and increased adoptions all contributed to the improvement. The agency warned that even though in some measures the system has exceeded expectations, the system is still in need of work.
• Smoking in casinos is still in the news: While the Senate health committee advanced the bill to close the loophole allowing smoking in casinos, the casinos are attempting to find ways to work within the system, such as unstaffed non-gaming smoking lounges.
• The Nuclear Regulatory Commission rejected the state DEP's assertion that the commission should consider the consequences of a terrorist attack on the Oyster Creek nuclear power plant when considering the station's license renewal. The DEP is considering whether or not to appeal.
• The Assembly Environment Committee advanced a bill to reduce emissions of carbon dioxide and other greenhouse gasses by 20 percent by 2020. Some business groups are griping that it will increase energy prices.

Quotes of the Day II and III

by: Hopeful

Tue Feb 27, 2007 at 09:05:30 AM EST

Everything is about tomorrow's dollars and spending them today. If they want to tell me why that's not true, they could have come here today and explained that."

Attorney Peter Humphreys, an expert in these kinds of deals:

"Our motto: 'If it has a cash flow, we can securitize it'"

Monetization: Accounting vs. Accountability

by: Steven Hart

Sun Feb 25, 2007 at 09:02:04 PM EST

This is the response from Blue Jersey blogger Steven Hart.

I'm from New Jersey, but when it comes to "asset monetization" - i.e., the long-term leasing of the New Jersey Turnpike or other public facilities to private management companies - I'm strictly from Missouri. You have to show me. And from where I'm standing, monetization may work as a way to raise quick cash, but it has yet to prove itself as a responsible way to manage vital public assets.

I have a lot of company in this. The unusual thing about monetization is that its opponents come from both sides of the aisle: former GOP candidate Douglas Forrester and Democratic State Sen. Shirley Turner see eye to eye on it. That in itself is unusual enough to qualify as a harbinger of apocalypse, so let's consider their objections. 

In the case of the Turnpike, the most obvious starting place for the kind of monetization approach that Gov. Jon Corzine is talking about, we should remember that the Turnpike is not simply an asset, it is the economic spinal column of New Jersey and a key element in the movement of traffic throughout the region. It is the linchpin of daily life for hundreds of thousands of commuters, and a corridor for the efficient (mostly) movement of goods throughout the region. As such, it returns value on a daily, even hourly basis. Changes in operations -- particularly toll rates - will have a far-reaching impact.