New Jersey 2008 State Budget - Municipal Aid

Enlighten New Jersey notes today the inequality in state aid to municipalities.

As required by law, each Legislative Distinct (LD) has approximately the same number of residents, and yet proposed municipal aid ranges from a low of $23,625,299 in LD-24 to a high of $119,422,814 in LD-29. The proposed average municipal aid per Legislative Distinct is $43,178,397.

Proposed state aid for each municipality and Legislative District can be viewed here and New Jersey population statistics as of December, 2006 can be found here.

Why are there differences? Enlighten doesn't come out and say it, but the two districts cited provide a clue. District 24 has a large number of small municipalities, 31 in all, receiving an average of $768,558.

District 29, on the other hand, covers Hillside Township and a portion of Newark. The average state aid in 29 is $59,721,407; Hillside will receive $5,676,440, while the tab for Newark is $113,766,374.

The observant will note that in addition to the difference in character (rural vs. urban), District 24 is represented in the Senate and Assembly by Republicans, while 29 is a Democrat District. Surprise!

Actually, it gets better. Breaking down the municipalities statewide by their representation, an interesting trend emerges. All-Democrat districts (Senator + 2 Assemblymen) receive an average of $5.3 million (per municipality) in total state aid, while all-Republican districts average $1.59 million. Here's the breakdown by representation:

Senate	Assembly	Average Aid	Average Increase
D	D, D	$5,304,771.40	1.95%
D	R, D	$2,582,107.63	1.91%
R	D, D	$2,106,762.21	1.91%
R	R, D	$3,081,757.84	1.91%
R	R, R1	$1,589,208.16	1.88%

Breaking it down by county, it's clear that this year's state budget remains, as always, a vehicle for transferring cash to the New York area, at the expense of the rest of the state. Hudson County, with the largest starting aid level, also leads the way in growth at 1.97%

COUNTY	0607 Average Aid	0708 Average Aid	%Change
Hudson	$15,408,884	$15,711,918	1.97%
Essex	$9,831,517	$10,023,886	1.96%
Mercer	$8,766,272	$8,938,238	1.96%
Middlesex	$6,204,436	$6,324,626	1.94%
Passaic	$5,883,483	$5,996,404	1.92%
Union	$5,791,894	$5,904,388	1.94%
Camden	$3,359,636	$3,424,738	1.94%
Ocean	$2,129,170	$2,169,268	1.88%
Somerset	$2,074,086	$2,113,291	1.89%
Monmouth	$2,036,287	$2,075,099	1.91%
Bergen	$1,824,555	$1,858,832	1.88%
Cumberland	$1,781,920	$1,816,349	1.93%
Morris	$1,717,062	$1,749,088	1.87%
Atlantic	$1,679,125	$1,710,660	1.88%
Burlington	$1,630,726	$1,661,178	1.87%
Salem	$1,619,646	$1,651,477	1.97%
Gloucester	$1,512,750	$1,540,960	1.86%
Cape May	$1,390,098	$1,416,850	1.92%
Hunterdon	$815,436	$831,054	1.92%
Warren	$780,444	$795,219	1.89%
Sussex	$739,841	$753,266	1.81%
Grand Total	$2,993,880	$3,051,477	1.92%

Furthermore, larger municipalities continue to grow faster than smaller ones:

Municipality Type	0607 Average Aid	0708 Average Aid	%Change
City	$11,846,443	$12,079,345	1.97%
Town	$4,418,015	$4,503,779	1.94%
Township	$2,953,055	$3,009,313	1.91%
Village	$1,629,736	$1,660,126	1.86%
Borough	$1,043,348	$1,062,833	1.87%
Grand Total	$2,993,880	$3,051,477	1.92%

Combining the representation cut with municipality type, the disparity in state aid to municipalities becomes abundantly clear.

	All-Democrat	All-Republican
City	$ 22,981,789.73	$ 4,145,897.80
Town	$ 9,016,540.40	$ 1,996,690.78
Township	$ 3,909,956.64	$ 2,266,959.05
Village	$ 1,891,688.50	$ 1,428,564.00
Borough	$ 1,470,199.91	$ 817,775.29

The budget does not, as the governor said in his address, provide "an across-the-board two percent increase in municipal aid." It provides additional aid at less than the 2% he claims, and in the most divisive and partisan manner possible. If he had any shame, Governor Corzine would resign after submitting this garbage.

---

¹ Posted edited 3/2 9:20 AM to fix a typo

The NJ Gay "Marriage" Ruling

Glenn Reynolds is running a poll, asking whether or not the NJ Supreme Court's "decision" will help the Republicans nationally. I don't think it will, simply because the decision was really a punt. Typical of the Imperial New Jersey Supreme Court, it directs the legislature to take an action, rather than actually deciding anything on the merits of the law and our state Constitution.
Enlighten NJ called it early:

A ruling in favor of gay marriage would be topic one in the state, drowning out all other issues for the balance of the campaign. Major reverberations would be felt around the country and the last thing Democrats, and particularly Bob Menendez, need are hot debates about activist courts and gay marriage.
The timing of the court’s decision can be controlled and a decision to legalize gay marriage in New Jersey certainly could have waited until after the election. A ruling against gay marriage can’t hurt Democrats and may well help their electoral chances.
Court imposed gay marriage in New Jersey is not going to happen. We might be wrong - but if gay marriage becomes legal in New Jersey tomorrow, the ruling will become know as The October Surprise of 2006.

Chief Justice Deborah Poritz may be a socialist political hack, but she is certainly not stupid. A decision to legalize gay marriage outside of the constitution and the law could have become a powerful Republican turnout driver; this decision doesn't have that power.

Exercise in Futility

This evening, after my second consecutive weekend road trip to Connecticut, I filled out my "FAIR" rebate application. I was hoping to get a little of the tax relief Governor Corzine promised during his campaign. Sure would be nice to get a few hundred dollars back from the property tax relief fund.

The state provides a nice, online form with which to submit an application. It walks through all of the values required, and generates a receipt at the end. It even reminds the user to either save or print the receipt, as it is the only record that an application has been submitted.

Unfortunately, I probably won't get the rebate. You see, I worked really hard last year to generate enough cash flow to pay my bills, feed my kids, and fund my copious tax liabilities. In fact, I worked about 17% overtime, and that put me into the realm of the ineligible "rich" by a couple hundred bucks. Had I only worked 16% - 20 hours less - then I would be eligible to receive the rebate.

Really "FAIR" system, isn't it? Thanks, Governor!

Tags: New Jersey, Taxes

State Employee Growth

Paul Nelson of NJ Fiscal Folly pointed out a great resource yesterday in NJ Government Employee Data. I spent a couple of hours last night going through the reports, and one thing I can tell you is that our structural problem in New Jersey has been brewing for an awfully long time.

New Jersey, like most other Northeastern states, has been growing at a decelerating rate through much of the 20th century. The linear growth trend suggests we may reach zero population growth in about sixteen years.
[editorial note: the vertical scale on the following chart should read "Growth Rate" rather than "Cumulative Growth"]



Even though the population growth is decelerating, the numbers add up significantly over a long period of time. I chose 1920 as a base year because it was the earliest readily accessible data point at the US Census website. From 1920 to 2005, New Jersey's population grew by 176%.



As noted by Enlighten-New Jersey, growth in state employment has, on average, been much higher than population growth, but with significantly more variability.



The only bright spot on this chart is the slight dip during the 80s (19%) and 90s (-5%), when state employee growth was held to more reasonable levels. Overall employment change for that period (13.3%) was actually less than population growth (14.2%). Governor McGreevey undid those gains and then some; by 2005 we had 26% more employees than in 1980, but only 18% more people in the state.

As Enlighten says, "government is becoming less productive and more costly with each passing year." How much more? Take a look at one final chart, showing the cumulative growth of the state's population versus the cumulative growth in state employees.



These numbers are truly staggering. The state employs nearly 1% of our population, and wants to add more. Governor Corzine's 2007 budget adds another 1,300 employees to the payroll. Contrast that with the US military. It had less than 0.5% of the population on active duty in 2005 (page 166), and will decrease by nearly 4% by 2007.

Tags: New Jersey, Taxes, Corzine, State Budget

Union - Management Relations

FAIRFIELD, CT -- The Industrial Division of the Communications Workers of America (IUE-CWA) held a rally this afternoon in front of General Electric headquarters in Fairfield, Connecticut. At issue: leaked internal management memos that indicate company plans to downsize the unionized workforce by 15%.
Union leaders are outraged. Union president Jim Clark, addressing the 6,000-strong crowd, demanded that GE Chairman and CEO Jeffrey Immelt publicly denounce the memos and support full execution of the company's contract with the union.
To the surprise of everyone present, Immelt did just that. Appearing at the rally, he said he stood with the unions. "I'll stand with you. I'll fight with you,'' he said.

Real? No. Not in GE-land, where management caving in to union demands leads to an unsustainable business model. Just ask Delphi, whom the IUE sucked dry back in the day before CWA took them over.

... the forces that pushed Delphi into bankruptcy court have been building for years. As the auto industry has gone global, U.S. automakers — saddled with high-cost labor contracts negotiated in more prosperous times — now find themselves pitted against leaner overseas rivals.

In the real world, a board of directors faced with Immelt's fictional action would fire him so fast his head would spin. They have a fiduciary duty to their stockholders to keep the company as profitable as possible, and a rogue chief executive siding with the unions is not in the best interest of the owners of the company.
Here in New Jersey, however, we have failed to learn the lessons of history. Enlighten-New Jersey notes how Corzine Vows To "Fight For Public Employees."

Pubic workers enthusiastically support Corzine’s budget because it contains no layoffs or cuts to state worker salary increases and fringe benefits. With growing concerns over the disparity between public and private sector pay packages, some lawmakers have suggested Corzine take action this year to rein in the cost public employees.

Many New Jersey bloggers noted during the campaign that Jon Corzine was not fit to lead our state. He fails to represent the interests of the taxpayers who elected him, just as he did in the Senate for five years.
After only a few months in office, it should be abundantly clear to all that we cannot tolerate his incompetence. Our "board of directors," the Senate and Assembly, have a fiduciary duty to the taxpayers to ensure our state is operated efficiently. A chief of executive siding with the unions against the legislature does not serve that interest. Corzine must go.

Tags: New Jersey, Taxes, Corzine, State Budget

Taxing Us to Death, Revisited

Enlighten New Jersey notes today that New Jersey Democrats are Not Satisfied With $16,667 Per Person In Taxes.

Taxpayers want Trenton to cut state spending, not come up with new ways to extract money out of their wallets. Shifting taxes around and identifying new things to tax does not solve the problem.

The people of New Jersey already pay more than their fair of taxes, no matter what Governor Jon Corzine, Senator Bob Menendez and all the other state Democrats might have you believe. These numbers don’t lie. New Jersey’s per capita tax of $16,667 is the second highest in the nation. And that's before Corzine’s new hospital, sales and other proposed taxes.

The specific numbers to which Enlighten refers were provided by the Tax Foundation. In addition to the raw dollars, where New Jersey ranks second behind Connecticut, they also have a table showing the state, local, and federal tax burdens as a percentage of income, along with a projected "Tax Freedom Day" for each year starting in 1970. Back then, NJ's workers had "paid off" their taxes by April 18th; it now sits at May 6th. We rank 3rd in total tax burden across the country, and have only been out of the top five twice since 1982.

An interesting comparison from that table is the difference between New Jersey's state/local tax burden and the average across the country. Back in the days of Brendan Byrne and Tom Kean, New Jersey was consistently close to the national average, as shown in the graph below.



Over the long haul of the data available, New Jersey has on average been less than 1/10th of 1% higher than the national average; under Governor Florio, however, we were significantly more taxed than the rest of the country, to the tune of nearly 3/4%. The "Whitman tax cuts" our liberal friends like to rail about were really just a return to the mainstream of America from Florio's confiscatory scheme.

Governor Corzine, by proposing to increase our sales tax 16.7%, seeks to return to the Florio model of taxing us to death. The real solution is to cut total spending, not increase it by $2 billion and demand more tax money to cover a manufactured "deficit."


Tags: New Jersey, Taxes

Who Knew? School Administrators Come Out Against Cuts

Corzine Watch reports that, surprisingly, school administrators don't want their budgets cut. In fact, the administrators of our institutions of higher education feel so strongly about it, they've almost taken to threatening the legislature in testimony:

The administrators also argued that the financial hardships would be far worse than the $169 million in cuts, because the state has asked schools to take on an additional $121.8 million in new costs. The heavy financial burden the state is putting on the schools could have a long-term effect. Less students would be able to afford state schooling, which could force students out of state.

The state of New Jersey spends boatloads of money on its colleges. Take Rutgers, for example. In 2006, net subsidies through the Department of State budget totaled almost $331 million; 2007 net subsidies will be just short of $275 million (click to enlarge):

What's staggering to me is the gross amount of state support to Rutgers through Grants-in-Aid -- nearly $1.6 billion. The cut in state aid, shown in this budget line, is less than $31 million, or 1.9% of the total grant. This will hardly bankrupt an institution that has been in existence since 1766.

You'll notice from the table that one other line is significantly different between 2006 and 2007: Receipts from Tuition Increase. In 2005 and 2006, Rutgers had extra income of $26 and $28 million, respectively, from higher tuition rates.

The table below, again taken from the Department of State budget, shows the cost of attendance at Rutgers increased by 3.6% in 2005, and by 5.5% in 2006. In each of those years, tuition for both in-state and out-of-state undergrads increased by 8% (click to enlarge).


This year's budget only anticipates $860,000 from higher tuitions, and this is a proper position for the governor to take. Like the state, Rutgers (and the other institutions of higher education) must learn to manage expenditures within expected revenues. The model of the past, in which revenues are managed to cover desired expenses, has got to go. Students, as the administrators have correctly recognized, can no longer afford annual 8% increases in tuition. Neither can the state.

Tags: New Jersey, Taxes, Budget, Education

Blogs on a Plane

The Fifth Column presents Carnival of the New Jersey Bloggers #51: Blogs on a Plane, and does a damn fine job of it. A very nice flying experience...

Budget Nitpick

One thing that really bothers me about this budget -- I find that I can't trust any of the numbers found therein. Let me share one example:

The compensation of members of the Legislature is $49,000 per year (C52:10A--1). The President of the Senate and the Speaker of the General Assembly, by virtue of their offices, receive an additional allowance equal to one--third of their compensation.

This should be a pretty straightforward piece of the budget, as the law spells out exactly what the budget should be. If you do the quick math, you find that 40 and one third times $49,000 is $1,976,333.33. The budget plans to spend $1,990,000 (see page D-3), or nearly $14,000 more than the law allows.

Fourteen thousand dollars may not sound like a lot, but lets take a hypothetical extension of this budgeting and see where it leads. $13,667 (the actual overrun) out of $1.99 million is 0.69%. The total spending plan for the entire state is $30.9 billion. If 0.69% of the $30.9 billion total is in excess of the requirements (like the Senators' salary budget), than that would work out to $211.75 million dollars of, as Bob calls it, slippage.

Can we afford to lose more than $211 million in slippage?

Tags: Jersey, Taxes

Carnival of the New Jersey Bloggers, Number Fifty

Folks, I wanted this to be an extra-special fiftieth anniversary edition of the Carnival of the New Jersey Bloggers. I had all kinds of great plans for a themed carnival, featuring a song parody with links to all the submitted posts.

Two problems arose. One, my song parody just never came together. As a matter of fact, it sucked. Here's a sample, judge for yourselves:

Fifty Ways to Blog New Jersey¹

The problem is all inside your head, she said to me
The answer is easy if you take it logically
I'd like to help you in your struggle to be free
There must be fifty ways to blog New Jersey

She said it's really not my habit to intrude
Furthermore I hope my meaning won't be lost or misconstrued
So I repeat myself, at the risk of being crude
There must be fifty ways to blog New Jersey
Fifty ways to blog New Jersey

Refrain:
Just leave her for him, Jim, get a new job, Bob
Don't try a new con, Jon, just listen to me
Trip on the rug, Doug, don't need to discuss much
Pump your own gas, lass, and get yourself free

The second problem is one every blog carnival host should face -- a whole mess of links. Getting them all to fit inside the confines of a single song would have been completely impossible, so I'll just do this the old-fashioned way. We've got a nice mix this week of regular contributors, old friends who've been away, and even friends we hadn't met yet. Let's start with them, after a nice glass of wine while we all get acquainted.

The New Folks

Several blogs were brought to my attention for the first time this week. As far as I can tell, these are their first visits to the Carnival. Please welcome them warmly and with many future links. First up is The Jersey Todd Show, a podcast blog covering the music scene. In Todd's own words from Episode 29, he's got "bands you've heard of, bands that you haven't heard of, bands you're absolutely going to fall in love with."
Corzine Watch take's the governor at his word ("Hold me accountable"), tracking his promises vs. performance. Just yesterday, they covered gas station attendants, speed limits, approval ratings, and college tuition rates. It's amazing what the governor has influence over.
Disconnect the Dots presents "OCD-enhanced analysis of the major flaws that surround us every day," and his submission this week explores the flaws inherent in today's internet.
Finally, Schadenfreude of The Fifth Column ("Bloggas with Attitude") chimes in with A Fistful of Pennies, in which money becomes an issue for some people.

The Prodigal Sons

A few folks who've visited, and even hosted in the past dropped by after long absences. Mr. Bingley of the Coalition of the Swilling starts us off by sharing his life experience with extreme punctuality. Two hours early for a first date?
Dan Riehl, in the meantime, stops blogging national events and news long enough to notice New Jersey's Attorney General. I guess asking her to enforce the law is a bit of a stretch, isn't it?
Next up is Steve Schippert, formerly of The Word Unheard. Steve has a successful new gig at Threatswatch.org, where their motto is "Supporting Security by Enhancing Awareness." Steve sends us a story about Stolen Honor Reclaimed, which is really a story about how milblogs are changing the landscape.

The Usual Suspects™²

Many of our regular contributors have stopped in this week talking about tolerance (The Opinion Mill), loss (Shamrocketship), theft (The Nightfly), shopping (The Art of Getting By), and finance ("D"igital Breakfast). Mike Hill gives us a chapter from his novel (Sluggo Needs a Nap), while Jim expounds on the glut of holidays (Parkway Rest Stop). Kate of Katespot had quite a scare this week, but fortunately Moira's fine.

Dmitri from Cobweb Studios shares another beautiful photographs, while Princess Tata gives us some disturbing images.

Gasoline prices are an understandably hot topic this week, given the near-three-dollar price for regular. Joe's Journal the Center of New Jersey Life, and The Contrarian weigh in.

Joe also highlights the ACE Project, promoting alcohol awareness at Monmouth University. Joe's brothers in the fraternity are taking up a heavy burden trying to prevent acute alcohol poisoning, and should have gotten some recognition for their efforts. Joe's blog was the only media covering their kickoff event -- nicely done, Joe!

Music makes an appearance at The 15.24 Meter Blog, with memories of Kung Fu Fighting and other great songs from 1974. The Rix Mix also talks a bit about Neil Young, folk music, and calendars.

Gil's got literature, travel, and shaving covered at Virtual Memories, and celebrates an important anniversary with some thoughtful introspection. Also in a literary state of mind, Maureen of Jersey Writers passes on a little advice via Dorothy Parker's resume.

Chanice covers New Jersey politics, especially in the big cities. Today's target: Newark and the Housing Authority.

Karl in Atlantic City agrees with President Bush (and Fausta) about the national anthem -- sing it in English! Speaking of Fausta, she doesn't like Airbus' idea of standing up in an airplane for multi-hour flights. I can't say I blame her, those "seats" look more like vertical coffins with windows.

Surprisingly, Sharon and Enlighten don't agree on an issue of taxation. There's more to it than just taxation, but you need to read both posts to really understand the differences.

In items about the news business, Danny Klein notes The Jersey Journal's appearance on the Sopranos, while Jay Lassiter was an officially credentialed blogger for today's protest rally in NYC.

Government intrusion into our daily lives? Bob's got that covered.

On the international front, Jane keeps up her relentless blogging for freedom in Yemen. If half of us worked this hard at our blogging, the newspapers would just fold up and go away.

I've got two final thoughts to leave you with. First, please read my post about the state's "hiring freeze." The numbers will send a chill up (and down) your spine. Then, stop by to see Mel for a good chuckle, and have a great New Jersey week!

Next week's Carnival of the New Jersey Bloggers will be hosted by The Fifth Column. As always, submit your links to NJCarnival@gmail.com.

---

¹ With apologies to Paul Simon (who was born in Jersey)
² With apologies to Jim


Tags: Carnival of the New Jersey Bloggers

Carnival 50, not ready for prime time

Watch the space above this post. I'll git-r-done, but not until late today. Sorry, but Real Life™ is getting in the way.

If you had a link you wanted to get in and thought it was too late, well, it isn't.
Feel free to submit it to NJCarnival@gmail.com.

See you later today!

Tags: Carnival of the New Jersey Bloggers

State Personnel Hiring Freeze

Claim: The State of New Jersey is operating under a freeze on hiring, and is reducing state personnel to save money.
Source, Budget in Brief, p. 1

Reduction of more than 1,000 staff positions with accompanying savings of $54 million through a rigorous hiring freeze, administrative efficiencies and responsible reorganization of select government functions. Limiting the filling of attrited vacancies will yield opportunities to not only control government growth
but also to do more with less by enhancing management efficiencies and streamlining services

Fact:
Under Corzine's budget, the total number of people to be employed by the state in 2007 will be 1.5% higher than in 2006.

Source: Departmental budget details.

Supporting Data:
According to the budget documents submitted by the departments, state employment for 2006 stands at 84,886. 71% are paid through direct state taxes, 16% using federal funds, and 13% using "other" funds. The budget documents explain that "Other includes positions supported by fees or other dedicated resources previously reported as State Supported." [This sounds like doublespeak for a shell game, doesn't it?]
In 2007, the "state supported" headcount will drop by 1.0% (612 personnel). Those paid by federal funds will increase 4.9%, or 661 people, while the "other" category will increase by 8.5% -- 933. The net increase in state employment (and future pension liabilities, no doubt) is 1,331 more people.



Nearly every department increases its total headcount. Only three see decreases: Corrections, Personnel, and the Chief Executive. Those reductions total 164 personnel. The Public Advocate, State, and Community Affairs, on the other hand, each achieve double digit growth in their number of employees. Between them, those three departments add 220 people, more than eliminating the token reductions of other departments.



Proposal:
A true reduction of 1,000 staff positions would mean a state workforce reduction of approximately 1.14%. I would propose that this reduction rate be applied to every department of the government.



My (admittedly broad-brush) plan would actually reduce the number of people the state has on payroll by 1,230 people, and is more than 2,500 fewer than the governor's plan. I don't believe that this is anywhere near enough to restore fiscal sanity to our state, but it is a step in the correct direction.

I don't like to hurl accusations of lying, but the governor's statement above reeks of untruth. This budget contains massive spending increases, unsupportable personnel increases, and blatant lies about the nature of the changes. As has been said before, a reduction in the desired rate of growth does not constitute a spending cut, and a plan which ADDS 1,331 people to the payroll cannot be reconciled with a claim of a "reduction of more than 1,000 staff positions."

It was a grave mistake for the people of New Jersey to place Jon Corzine in Drumthwacket.

Tags: New Jersey, Taxes, Budget

I have the honor of hosting the Carnival of the NJ Bloggers this week.

Are you interested in submitting a post to be included in this week's Carnival? All you have to do is to send an email to njcarnival@gmail.com containing a link to one of your posts that you would like included in the Carnival. Or not, but maybe I might pick one of yours anyway. It's really much easier for me if you send me something, and your life should be centered around making my life easier.

Since this is Carnival # 50, I'd like to include at least 50 posts. If you've run across a new blogger from Jersey, please suggest to them that they submit a link.

If I do not hear from you by noon on Saturday, I will assume that you do not wish to be included this week. Don't do like I did last week and wait until 3 minutes before the deadline to submit a link. [Sorry, Anonymous B., but those darn Incas attacked my Greeks in Civ III and I just had to finish exterminating the filthy swine.]

Tags: New Jersey, Carnival of the New Jersey Bloggers

Tough Choices?

As I mentioned in earlier posts, I've been going through the detailed department budgets posted on the New Jersey Office of Management and Budget website. The exercise has been a real eye-opener.

In his address to the legislature, Governor Corzine presented his budget as a series of tough choices.

The task ahead is daunting and not particularly attractive politically, for anyone. That said, the task must go forward -- no matter how tough the choices -- with a readiness to share the sacrifices.

I agree with the governor. Tough choices need to be made, but this budget does not make them. With a few notable exceptions like university funding, the governor has chosen to support the status quo of unrestrained growth. Take a look at the budgets requested by each of the departments (dollars in thousands):



Departments with increases will see an additional $3.1 billion in funding; cuts to individual departments total $493 million. A six-and-a-quarter to one ratio between increases and decreases doesn't seem much of a tough choice to me.

Maybe the tough choices become apparent when you look at what the departments requested vs. what the governor recommended to the legislature. Let's see:



Nope, no touch choices here. Twenty of twenty-two departments got exactly the tax dollars they demanded of the governor. Only Treasury (1.8%) and State (20.1%) saw reductions between their requested and recommended funding levels. Reducing the desired $4.8 billion dollars of growth by less than $350 million is more like tokenism than real fiscal management.

One last thought about the governor's "tough choices." According to the US Bureau of Economic Analysis, New Jersey Gross State Product grew 3.4% in 2004, and averaged 2.7% annually from 1997-2003. A budget which made tough choices would reduce growth in spending in at least one category, if not all of them, below the rate of economic growth. That doesn't happen here:



In this budget, overall spending grows at nearly three times the growth in our economy. It is irresponsible for the governor to make claims of fiscal responsibility when he proposes a budget that so far exceeds our means.

Tough choices, indeed.

Tags: New Jersey, Taxes, Budget, Corzine

Carnival of New Jersey Bloggers #49

No/w/here hosts a festive and friendly potluck Carnival of New Jersey Bloggers #49. Lots of links, good food, and friendly conversation, even between the lefties and righties...

Tags: New Jersey, Carnival of the New Jersey Bloggers

Details, Details II

I've been going through the details of the state budget, and found this interesting little tidbit of information. In the Budget in Brief (page 80), the governor took credit for a $28,000,000 reduction in one-time funding for UMDNJ. The detailed budget information for the Department of State (pp. D-348-51), however, shows that there's more to the story.
UMDNJ is a huge business, with 2006 operating income projected at $1,166,984,000. In executing its operations, it expects to spend $1,402,723,000 this year, with a net cost to taxpayers of $235,739,000. The university proposed to increase its operating income (from fees, tuition, etc.) by 2.8%, and increase its general operating costs by only 0.3%, saving the taxpayers about $28 million. This seems like a very reasonable business case, and is the way a state enterprise should manage itself. Two-point-five percent productivity improvement is a pretty easy putt for an organization with over a billion dollars of income. When I worked for GE, the business expected each manufacturing plant to generate 4-5% every year.
But the university, being a state institution, cannot run itself like a business. Included in its budget request was a separate line item, titled "Appropriation Funding Difference," calling for an additional $28 million in Grants-in-Aid. It appears that this is the $28 million in one-time expenditure reduction for which the governor took credit.
Of course, UMDNJ didn't stop there. They also included separate line items for Increased Utilities Costs ($10 million), Capital Renewal / Replacement ($15.2 million), and Research Faculty Development ($5 million). Somewhere, either at State or in the governor's office, these additional funds were zeroed out. In addition, this year's general operating budget is being reduced to $1,386,375,000 (1.2%) for 2007.
The net impact of these changes is significant - $79 million less than the school requested. Without those expenditures, the net cost to the taxpayer for each graduate of the university decreases by $47,000. Now if we can get rid of the remaining $151,266 per graduate, we'll be in really good shape.

Tags: New Jersey, Taxes, Budget, UMDNJ

Details, Details

One area of the New Jersey budget where Governor Corzine has proposed significant growth is the Department of Children and Families (DCF). The summary of major increases and decreases from the Budget in Brief (page B-65) shows that the governor proposed to spend $50,364,000 more in 2006-07 than projected for current year state operations, plus $64,611,000 more in Grants-in-Aid for "Child Welfare Reform."

I was curious about the nature of the child welfare reform and its costs, so I did a little digging around, and found the DCF budget recommendations.

The Fiscal 2007 Budget for the Department of Children and Families (DCF) totals $974.8 million, an increase of $235.6 million in State funds over the fiscal 2006 adjusted appropriation of $739.3 million for the Department of Human Services’ (DHS) Office of Children Services.

This increase of $235,600,000 is broken down into 3 buckets -- $93,165,000 for direct state services, $132,397,000 for Grants-in-Aid, and $10,000,000 for Capital Construction. Within these three categories, expenditures are identified by program, as shown below.

Direct State Services
Child Protective and Permancy Services
Prevention and Community Partnership Services
Education Services
Child Welfare Training Academy Services and Operations
Safety and Security Services
Administration and Support Services

Grants-in-Aid
Child Protective and Permanency Services
Child Behavioral Health Services
Prevention and Community Partnership Services

Capital Construction
Administration and Support Services

Summing up the totals and looking at how the growth is distributed, it becomes clear that no "tough choices" were made to develop the DCF budget. Across the board, huge increases in spending are planned (click the table below to see).



The topline DCF budget is most disturbing, but not nearly as disturbing as this next little bit.
In Child Protective and Permanency Services, the active caseload expected for 2007 is 58,100 children (page D-35), costing $9,565 for each child. In 2006, the caseload is 59,200 children, driving a cost per child of $7,211. Reaching back into 2005, the caseload was 64,300 children, and the actual spending was $7,453 per child. State spending for Child Protective and Permanency Services, on a per-child basis, has increased over 28% in the last two years, but goes up by nearly 33% this year.

Why the increased cost? Simply put, the program has added a significant number of staffers. In 2004, 3,450 people were employed by the CPPS program. That grew to 4,154 in 2005, and 5,059 in 2006. 2007 headcount isn't available in the budget, but DCF planned for nearly 10% growth in total filled positions, from 6,178 to 6,620. The department budget detail states (page D-36) "The Budget Estimate for fiscal 2007 reflects the number of positions funded and will be allocated by program class upon approval of a revised Child Welfare Reform Plan."

The story this document tells is staggering. The Department of Children and Families obviously does not intend to follow the governor's stated intention (BIB, page B-3) for

Reduction of more than 1,000 staff positions with accompanying savings of $54 million through a rigorous hiring freeze, administrative efficiencies and responsible reorganization of select government functions.

As evidenced by the budgeted personnel comment above, there is no plan (yet) to create a more efficient system of providing protective services for children. This is simply a plan to spend more of our tax dollars as quickly as possible.

Tags: Jersey, Taxes, Budget

NJ Budget - A Libertarian Point of View

I just ran across this post by Dr. Murray Sabrin, in which he presents the text of his testimony on the budget before the state Senate Budget and Appropriations Committee. He's got some interesting ideas about how to fix the state's budget problems.

On education funding:

• Amend the Constitution to abolish the “thorough and efficient” education clause, giving the Legislature control over school spending
• Amend the Constitution preventing the Supreme Court from ordering the Legislature or the executive branch to spend money for any purpose

About the only way to get the Supreme Court out of the school funding business is to explicitly invalidate Abbott and prevent it from coming back.

• Equalize state education aid. Every school district would get the same state aid per student as every other school district

This one I really like. The only truly fair way for the state to fund education is by linking the money to the students, rather than the schools or districts. Of course, it introduces other problems like inflation of attendance records.

• Implement education tax credits for individuals, families and businesses

Tie this to the previous item. Give the individual student or his parents gets a voucher that can be spent at any school in the state. [My, I'm starting to sound like a Libertarian, aren't I?]

On financial management:

• The state should implement forensic accountants Rosenfarb Winters recommendations regarding the Abbott Districts, which would save at least $282 million

Kinda cryptic reference, but I like the idea of saving 9-figure numbers.

• Institute zero based budgeting—all state agencies must justify every dollar it spends

We do this today, except the justification is usually "That's what we spent last year, you got a problem with that?"

On specific taxes:

• Reduce the sales tax by one cent every year for three years

Like it, but I'd go for six rather than three years.

• Reduce the personal income tax and the Corporate Business Tax

This is good, as long as we reduce the marginal rates to stimulate growth, rather than creating some phony scheme that eliminates taxpayers from the rolls. Unfortunately, the Governor has proposed option B.

• Eliminate the income tax on pensions

I don't know that this is such a good thing (see above re: eliminating taxpayers from the rolls)

• Raise the gas tax 20 cents per gallon only for road and bridge projects

More than doubling the gas tax (or any other tax) is a Bad Idea™.

On redistribution schemes:

• Eliminate property tax rebates, saving $1.5 billion per year

Great idea, as long as it's enacted along with the linkage of funds to students.

• Eliminate all state grants to nonprofits

Makes sense to me. I don't want my money funding West Jepepian Cultural Studies or other such nonsense. Many nonprofits do good work, but they all employ professional fundraisers and should not be reliant on state grants. Fee for service paid to nonprofits, however, would probably be a more efficient use of state tax dollars.

• End municipal grants

I don't think that I would completely eliminate them, but I would like to see tighter controls and elimination of favoritism toward committee chair pet projects. Transparency would be nice here.

On specific spending items:

• Begin the transition making the state colleges, Rutgers University, and the University of Medical and Dentistry of New Jersey financially independent

Considering the facts that Rutgers charges $237 per undergraduate credit hour in state ($484 out of state), has 28,000 students enrolled, and requires 120 credit-hours of course work to graduate, one would think they could generate a viable business model without state funding. By my back-of-the-envelope calculations, they take in somewhere around $200 million annually from tuition alone, assuming an 80/20 split between in-state and out and 4-5 years to graduate.

• Kill the Transportation Fund bond issue

All for this one, as well. The debt liabilities in the TTF need to be taken out of hide, like they should have been when they were incurred.

On fixing the business climate:

• End state government grants, loans, subsidies for businesses
• Abolish unnecessary business regulations

Absolutely. The state has no business in business. Set a low tax rate, keep it stable, get out of the way and watch things take off.

On general government reforms:

• Eliminate dual office holding

How the heck did we end up with this albatross, anyway?

• Eliminate pensions for part-time government employees

I spend at least an hour a year on paperwork for the benefit of the state, and in return I get a check. Is that enough to qualify me as a state employee for pension purposes?

• Eliminate pensions of legislators

I'm absolutely in favor of doing away with the permanent politician. Killing these pensions would remove a significant incentive for those in office to stay in office.

It's not surprising that Sabrin's ideas haven't gotten more attention, given that he was 51st on a list of 74 people testifying April 3rd, and has been a less-than-successful candidate for multiple statewide offices (Governor 97, Senate 00). I'll leave you with Sabrin's thoughts on the true source of our problem, with which I wholeheartedly agree.

The culture of entitlement and redistribution of income is so ingrained in the collective psyche of policymakers and many segments of the public, that few individuals can conceive of a society based on low taxes, less spending, less regulation, and limited government. Instead, too many of our citizens believe government’s prime responsibility is to be the social worker, the healthcare provider and the source of income for many of our families.
Policymakers must embrace economist Ludwig von Mises’s insight: “The government and its chiefs do not have the powers of the mythical Santa Claus. They cannot spend except by taking out of the pockets of some people for the benefit of others.”

Tags: New Jersey, Taxes, Budget

The Latest on New Jersey's Budget

Tags: Jersey, Taxes

More on the New Jersey Budget

Enlighten New Jersey spends a little blog real estate to remind us that "There Are No Cuts In Governor Corzine's Budget."

Governor Jon Corzine and his supporters claim his proposed $30.9 state budget for 2007 is a fair and reasonable plan while acknowledging spending will climb 9.2% over last year’s budget of $28.3 billion. No matter how you try to spin it, Corzine’s budget will increase state spending by $2.6 billion.

Corzine has explained $1.63 billion of the increase with his proposed $1.1 billion payment to the state worker pension fund and his request for a $530 million increase in property tax rebates. So where is the remaining billion dollars in additional spending going? It’s being spent on the Governor’s priorities.

Conveniently, the Governor's Budget in Brief provides a detailed list of different budget line items that have either increased or decreased. Enlighten pointed out a few highlights, but some summary data would also be useful to emphasize the magnitude of the problem.

State Operations - $268,887,000 increase

• 16 line items increased, totaling $690,608,000
• 39 line items decreased, totaling $421,731,000

Two of the decreases, totalling $125 million, allegedly shift costs to the federal government. Given that New Jersey typically gets back 57 cents on every dollar sent to the feds, I am highly skeptical about the opportunity here.
Eighteen, for $108 million, come from "efficiencies" in each of the departments. There is no detail, as far as I can tell, about how the governor plans to make the bureaucracy more efficient. To gain efficiency in a business sense (our governor is a businessman, after all), we either have to produce more government services for the same cost, or produce the same government services for a lower cost. Enlighten points out that the state employs 154,700 people. 80,900 are full-time employees, which means that each full-time employee must produce an extra $1,340 worth of services to achieve $108 million in "efficiencies." At $40 / hour, that's 33.5 hours of extra work for each employee, or the equivalent of of 1,355 man-years of work. Think the unions will stand for that?
Four items worth $95 million aren't really spending decreases, because they reduce fund balances (Prescription Fund, Division of Pensions/Pension Fund, Governor's Contingency Funds, and Contingency Funds). This exactly the kind of budget trick the governor told us he wouldn't use.
Four line items, totalling $28 million, appear to be related to staffing reductions, including the governor's salary. It was so kind of him to sacrifice his $250,000 salary in the face of a $4,500,000,000 hole -- we're 0.0055% of the way there now!
Finally, there's a one-time savings similar to the campaign funding Enlighten pointed out -- we are "saving" $600,000 by not funding the Governor's transition as we did last year.

Grants-in-Aid - $885,514,000 increase

• 36 items increased, totaling $1,708,960,000
• 76 items decreased, totaling $823,446,000

The governor finds more creative ways to give away our money. I suppose I should be encouraged by the $250,000 reduction to Weehawken Arts. The largest Grants-in Aid "reduction" is $215,000,000 attributed to the Hospital Provider Assessment. This is really a half of a new, $430,000,000 tax (Budget in Brief, page 6). Calling it a cost reduction is nothing more than a big fat lie.

State Aid - $1,007,679,000 increase

• 15 items increased, totaling $1,165,754,000
  
• 19 items decreased, totaling $158,075,000

The big increase, $744,117,000 to the Teacher's Pension and Annuity Fund, dwarfs all of the savings combined. Even excluding this pension funding, the increases are still more than 2.5 times the decreases. This is a "hard choices" budget? Hardly.

The bottom line, again from Enlighten New Jersey's post:

So it goes throughout Corzine's budget – a small cut here and a large increase somewhere else in his budget plan In the end, Governor Corzine has funded his priorities and his priorities are costing the state’s taxpayers an additional $2.6 billion.

Tags: Jersey, Taxes, Budget