More, More, More
featured in Carnival of the New Jersey Bloggers # 43
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. Once the site’s history is re-created, I will link to those posts.)
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 annualy 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) recieve 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 $.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 gaurantee 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 reamin 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 advisor 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:
- Solve the TTF issue (gimmick that pushes off reform for five years)
- Prepare the budget (raise taxes)
- 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 theatre.
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.
Also blogged on this date . . .
- Meaning of Life? - 2008
- Governor Corzine Astounds Reasonable People - 2007
- Dot . . . Dot . . . Dot . . . - 2007
- Addiction - 2007
- Tuna Fish - 2007
- And then there were four - 2006
- Corzine Apologizes - 2006
- E-ZPass & Highway Gasoline - 2005
Tags: budget, Carnival-of-the-NJ-Bloggers, Corzine, Education, New Jersey, Politics, Schools-Construction-Corporation, tax, Transportation-Trust-Fund
By Enlighten-NewJersey on Mar 10, 2006
Great post, thanks for sharing what you learned. Unfortunately, it’s all bad news. Corzine’s ideas for the budget were even worse than we imagined. God help us.
By Sharon GR on Mar 12, 2006
Nice write-up of the event, thanks. Looks like the questions were somewhat different, and that’s probably a good thing.