NJ Fiscal Folly

Flatliners

2006-07-15T14:05:00.000-04:00

Like Corzine's credibility, my PC is currently flatlined.

I hope to resume posting next week.

Why Americans Ignore Soccer

2006-07-10T10:57:00.000-04:00

(1) Low scoring = boring

(2) The officiating sucks. There aren't enough officials on the field, so they don't control the game. Players get away with too many cheap shots and flops. Bad calls also have a greater impact in low scoring sports than high scoring sports.

(3) The player substitution rules are too inflexible.

(4) Nobody wants a game to be decided by penalty kicks. Greater substitution flexibility would allow sudden death overtimes.

We now return to our regular programming.

Democrats Piss On Taxpayers

2006-07-08T10:28:00.000-04:00

It wasn't enough to raise taxes yet again.

It wasn't enough to refuse essential reforms in state spending.

Now the Democrats have decided to add $270 million in additional pork to Corzine's already bloated budget. It only took two days to confirm my prediction that commingled tax revenues from the sales tax increase will be diverted from property tax relief to other programs.

During the last week, we got a lot of bluster from Corzine about his willingness to use the line item veto. Let's see how long it takes him to weasel out of that pledge too.

Update: The final figure was $250 million. The Democrats actually added $300 million, but Corzine made token cuts of $50 million. Thus, Corzine and the spendthrift Democratic legislators have already hijacked 23% of the sales tax increase for political pork.

Another Year Of "Tax And Spend"

2006-07-06T18:54:00.000-04:00

Gov Corzine and the Assembly Democrats have apparently reached a budget deal. Here's all you need to know.

Once again, the Democrats increase NJ taxes. The sales tax will go from 6% to 7%. One of the highest tax states in the country will become even more onerous.

Once again, the Democrats continue to waste taxpayer money. There will be no headcount reductions or spending cuts in our bloated state government. The Democrats ignored all spending cut proposals, and made no progress in reducing or eliminating runaway state spending. Another tax increase is now certain for next year.

Once again, the Democrats lie about property tax relief. Any talk about setting aside a portion of the tax increase is simply blather, nothing more than lipstick on the pig. The commingled tax revenues will soon be diverted to other programs.

Once again, the Democrats fleece NJ taxpayers.

Emperor Corzine?

2006-07-05T09:15:00.000-04:00

Has anybody else noticed that every time Corzine shows up to address the legislature he brings along an imperial bodyguard of state troopers?

What's that all about, and why do the legislators let him get away with it?

We're All Gonna Die!

2006-07-05T08:26:00.000-04:00

No casinos. No lottery. No DMV.

Will this pain and suffering never end?

The Farce Continues

2006-07-03T11:15:00.000-04:00

How is it possible that Gov Corzine is unable to find any significant headcount reductions in a state workforce of 84,400 employees (see pages 3 and 55), including at least 43,500 "non-essentials"?

As far as I'm concerned, the state government can remain shut down for a month. We'll barely notice the difference. NJ taxpayers will find out how much of their money is wasted on a bloated state payroll.

This Is An Alternative?

2006-06-28T10:18:00.000-04:00

NJ Assembly Democrats plan to push an alternative budget to Gov Corzine's "tax and spend" turkey.

Here's a link to a news story that briefly summarizes their proposals.

One of the Democrats' primary goals is to avoid a sales tax increase this year, possibly because they want to save this tactic for future use.

When you review the currently available details of their plan, one feature stands out. Like Corzine's budget, there are almost no spending cuts in the so-called alternative. Other than a lower pension system contribution, the Democrats' proposals are basically a collection of new tax increases on businesses, employees, vehicles, etc.

The only real benefit of this alternative budget is that it provides a rallying point for Corzine's opponents. Otherwise, it's simply another version of business as usual in Trenton.

Republican Budget Cut Proposals

2006-06-23T14:44:00.000-04:00

The NJ Assembly Republicans have prepared a list of more than $2.2 billion in possible spending cuts for next year's budget.

Here's the press release and here's the list of proposed cuts. Additional information can also be found at this link.

The list is somewhat long, and includes both major and minor cuts. The list includes the following large items:

-- $420 million from a 10% reduction in Abbott district spending

-- $102 million from restructuring the Urban Enterprise Zone Program

-- $78 million from eliminating Special Municipal Aid, which is basically political pork

-- $116 million from eliminating cost-of-living increases for higher paid state employees

-- $200 million from pension reforms

-- $300 million from eliminating legislative pork

-- $71 million from reducing the number of political appointees

-- $150 million in savings from improving state government procurement practices

Obviously, there's a certain amount of political theater involved here. The scope, size, and timing of potential cost savings are overstated. On the other hand, many of the proposals are quite feasible, and a 50% success rate still yields $1 billion in savings.

In the next 7-10 days, NJ taxpayers will hear a lot of blather about the necessity of further tax increases. Don't buy it. The only thing needed in Trenton is backbone, not money.

Empty Threat

2006-06-23T10:22:00.000-04:00

Gov Corzine is threatening to shut down state government unless the legislature goes along with his proposed budget, particularly an increase in the NJ sales tax from 6% to 7%.

Shutting down the government is supposed to be a tactic to get state employees and taxpayers to apply pressure to the legislature to pass a budget. In this situation, however, it's an empty threat.

If I'm a legislator (in either party), and someone complains about my budget position, I have an easy defense:

"Gov Corzine wants to raise NJ taxes. I don't. The only reason for a government shutdown is Corzine's stubbornness. If you have a complaint, contact Corzine."

I know this answer is glib, but it's still effective. Why does Corzine think he's going to win this exchange?

NJ Sales Tax Reform

2006-06-21T21:09:00.000-04:00

New Jersey Policy Perspective, the liberal policy group, has just issued another interesting paper, "Making The State Sales Tax Pull Its Weight".

The paper provides a broad overview and comparisons of various states' sales taxes. After briefly summarizing NJ's sales tax history, the report then analyzes NJ sales tax features and shortcomings.

The paper basically concludes with a single recommendation: NJ should retain the current 6% sales tax rate, but should try to eliminate most of the sales tax exemptions that currently exist, particularly the many categories of services that are now untaxed. The paper points out that services now account for 58% of Americans' consumer spending.

As you may recall, Gov Corzine's budget proposal currently includes a similar expansion of taxable activities, which is projected to yield $330 million in additional yearly revenues.

The NJPP report claims that elimination of all exemptions could produce $5.6 billion per year in additional sales tax revenues. However, this figure includes the following categories and estimated sales taxes:

(1) Gasoline and other motor fuels ($928 million)

(2) Food products ($922 million)

(3) Clothing ($680 million)

(4) Consulting and lobbying services ($462 million)

(5) Legal services ($449 million)

(6) Computer systems design ($381 million)

(7) Architectural, engineering and related services ($379 million)

(8) Accounting, tax preparation, etc ($297 million)

The paper includes a table in the appendix which shows how many states currently tax various categories of services. For the most part, taxation of services is fairly widespread, except for professional services, which are rarely taxed.

If you can concede for a moment that spending cuts alone will not balance next year's budget, then NJPP's recommendation (and Corzine's budget proposal) makes sense. Sales tax reform would also help reduce NJ's dependence on income taxes and property taxes. The paper is probably too optimistic about the potential expansion of taxable goods and services, but the general idea seems correct. It's also nice to see that NJPP's proposal falls outside the usual liberal "tax the rich" rhetoric.

NJ Government Employee Data

2006-06-20T10:07:00.000-04:00

I've just discovered two excellent sources of information on NJ government employees.

The first source is the NJ State Government Workforce Profile, which is updated annually. This report includes extensive data on headcounts, salaries, educational levels, job categories, union representation, etc. I'm still working my way through the 2006 report, which is 70 pages long.

The second source is the NJ Department of Labor wage survey of public and private employees, which is also updated regularly. Most teachers fall under industry code 61. Most other government employees can be found under industry code 92.

Although both sources provide wage and salary data, neither seems to include benefit costs, such as medical care or retirement benefits. Given the magnitude of these liabilities, that's a real shortcoming. However, there's still a lot of good information in these reports.

Worth Reading

2006-06-19T08:36:00.000-04:00

David Rebovich had a pretty good column yesterday, "Democrats' Budget Crisis Has Deep Roots".

It's basically a summary of the current situation, but worth a few minutes of your time.

"The most basic reason the Democrats have a crisis about the next budget is that they have for too long told their constituents that extensive government spending is possible because someone else, eg, the rich, the business community, people in the next town, will pick up the tab. If not, the bill can simply be covered by some painless budget maneuver. Well, those days are gone, and Democrats are bickering over what to do about it."

Dual Office Holding In NJ

2006-06-16T08:43:00.000-04:00

New Jersey Policy Perspective, a liberal policy group, has just issued an interesting paper, "One to a Customer: The Democratic Downsides of Dual Office Holding".

Quoting the report:

"According to the Center for Public Integrity, 33 percent of New Jersey legislators received income from a government agency other than the Legislature and at least 20 held more than one elected office. Dual office holding also is common at the county and local level.

There are many reasons for concern. Holding two elective offices in New Jersey:

• Insulates office holders from political accountability

• Frustrates the system of checks and balances among levels of government

• Is a form of political double-dipping

• Amplifies pork-barrel spending

• Blocks the political ladder to emerging aspirants

• Reinforces the state’s predilection for localism, parochialism and fragmentation

• Creates “low-show” jobs that divide the time and attention of elected officials

• Puts officials in a built-in conflict situation"

While I generally agree with the need to eliminate dual office holding, I might make an exception for those people who hold unpaid offices at the local level, such as $1 per year mayors.

NJ's Shadow Government

2006-06-14T11:15:00.000-04:00

I've recently discovered a small group called the Union County Watchdog Association, that also has a blog, The County Watchers. As you might surmise, their primary focus is Union County: political activity, financial issues, freeholder shenanigans, etc.

This is a good idea that needs to be duplicated elsewhere in the state. NJ county government is neither transparent nor accountable, and this situation provides ample opportunities for corruption and waste. NJ county government also tends to operate in the shadows, dominated by county party organizations and outside the spotlight usually focused on state or local government activities. For example, what do you really know about the background, powers, and activities of your own county executive or freeholders?

Thanks to the internet, watchdog groups and blogs now have much better tools to monitor county government, accumulate relevant data in easily accessible formats, and communicate their findings to taxpayers, voters, and other interested parties. The internet also makes it possible for an individual or small group to have a large impact.

Whenever I read about proposals for municipal consolidation or regionalization, I shudder to think that my own town or our schools might fall under the control of Bergen County politicians and bureaucrats. If more NJ counties had groups like the UCWA, we would increase the visibility and accountability of such people, and greatly reduce the corruption and waste that constantly plagues our state.

America's Next Civil War?

2006-06-08T08:18:00.000-04:00

I've just run across an interesting article, "America's Second Civil War: The Public Employment Complex vs Taxpayers", from the Yankee Institute in Connecticut.

At the state and local level, the "public employment complex" (PEC) includes all persons or groups that earn a living, either directly or indirectly, from government programs. PEC includes government employees, public unions, community organizations, advocacy groups, lobbyists, lawyers, consultants, etc. As we've already seen in NJ, the steady escalation in government spending and PEC costs has created numerous financial crises across the country. The resulting tax burdens can no longer be sustained or ignored. Thus, many politicians now face an unavoidable choice: either cut back government spending, or watch their taxpayers migrate to lower-cost communities.

The article forecasts a dramatic increase in labor militancy, bitter political conflicts, and harsh attacks on those persons or groups that want to reduce PEC costs. The author believes that taxpayers will eventually win, due to a numerical majority and the fact that constantly growing PEC costs can't be sustained or justified. However, the other consequences of this imminent "civil war" may be harmful to everyone.

More Of The Same

2006-06-06T16:37:00.000-04:00

I find it difficult to take too seriously today's Codey-Roberts proposal for the NJ legislature to spend the summer working on property tax reform. There's no way to cut the Gordian knot unless Abbott district spending is significantly reduced. Any other version of property tax "reform" is simply an exercise in shifting the tax burden from one group to another. Any verbiage about revising school funding formulas is simply hot air unless non-Abbott districts get a larger share of taxpayer-funded school aid.

Municipal/school district consolidation/shared services is a worthy topic, but the potential savings are insignificant compared to Abbott districts, which are currently budgeted to receive 37% of all funds available for NJ property tax relief.

Pension reform is also a worthy topic, but it's really separate from property tax, and the issues are much broader than just curbing the obvious abuses. I don't know why the NJ legislature needs to look at this area yet again. There are already numerous specific proposals on the table.

I remain a skeptic regarding any NJ constitutional convention, for at least two reasons. First, the politicians and interest groups are continually trying to limit the scope of such a convention to state taxes, but to exclude any consideration of state spending. Second, I see a great potential for mischief in the whole amendment process.

MSM Is Late To The Party

2006-05-31T09:31:00.000-04:00

The MSM is finally reporting that Gov Corzine's budget proposal to expand NJ FamilyCare severely underestimates the cost of providing health insurance.

I had previously posted on this topic May 3 and March 24.

The Cost Of Amnesty For Illegals

2006-05-30T09:56:00.000-04:00

The Heritage Foundation has published a disturbing paper with the lengthy title "Amnesty and Continued Low-Skill Immigration Will Substantially Raise Welfare Costs and Poverty".

The paper's main points include the following:

(1) The net additional cost of amnesty for the 10-12 million illegal aliens already in the US would be approximately $16 billion per year.

Most of the current illegals have low education levels and low skill levels, which are highly correlated with high welfare utilization, high rates of out-of-wedlock childbearing, high rates of child poverty, high crime rates, future shortfalls in educational attainment, and future welfare dependence, including successive generations.

(2) Once the illegals receive permanent residence, and later citizenship, they are allowed to bring spouses, children, and parents to the US. The estimated cost of "family chain migration" would be an additional $30 billion per year. (Many of these immigrants would be net consumers of government and social services rather than potential taxpayers.)

(3) Amnesty, citizenship, and welfare benefits, combined with a lack of border security and other forms of enforcement, would serve as a magnet to accelerate the flow of low-skill illegals into the US, and would further increase the costs to US taxpayers, as well as other social problems.

As the study notes, current amnesty proposals would be the largest expansion of the welfare state in 35 years. If the illegal immigrant population becomes entitled to citizenship benefits, while simultaneously growing due to "family chain migration" and the "magnet effect", the costs to US taxpayers would be truly staggering.

I would add two other points to the paper.

First, even though immigration policy is determined at the Federal level, many of the costs associated with amnesty would be incurred at the state and local level, without benefit of offsetting Federal funds. For example, NJ hospitals currently spend $250-300 million per year providing Federally mandated medical care to illegal immigrants. There is no Federal compensation for this care, and these costs are eventually passed on to NJ residents, through higher medical fees, higher medical insurance rates, or higher taxes. NJ government is already broke, and can't possibly afford any expansion of such uncompensated services.

Second, the issue of immigration policy is intimately tied to the concepts of national sovereignty and national identity. Many amnesty supporters believe that "progressive, transnational values" trump any national policies that might preserve US sovereignty or national identity. These supporters do not concede (a) that immigration is a privilege, not a right; (b) that the US has a right to regulate the rate of immigration; or (c) that English should remain the primary language of the US. The rest of us believe otherwise.

I'm not against immigration, but amnesty plus open borders is a formula for disaster.

Update: Back in April, the Federation For American Immigration Reform estimated that NJ currently spends about $1.7 billion per year for just three categories of illegal immigrant costs: emergency room medical services, education, and incarceration. This figure seems pretty high to me, but I could easily believe at least $1 billion per year after you add in other social services plus increased state and local government costs. In general, illegal immigrant costs will greatly exceed any taxes paid by low skill workers.

The Good News Never Ends

2006-05-24T17:33:00.000-04:00

One of my favorite topics is NJ's liability for post-retirement health care benefits for public employees (sometimes designated PRM, for post-retirement medical). This liability is a form of debt, a future obligation to be paid by NJ taxpayers. Unlike pension obligations, there are no assets set aside and invested to pay for these future expenses.

It should also be noted that NJ public employees have generous health care benefits, especially PRM, that most private sector employees can only dream about.

Back in December, the Benefits Review Task Force Report made a rough estimate that NJ's PRM obligation was at least $20 billion. I expressed skepticism about that figure in a prior post, and suggested that a more realistic number might be as high as $40 billion.

Today, I came across an interesting tidbit buried in an OLS analysis of the proposed budget for "Interdepartmental Accounts", a cost center which contains state funded employee benefits. The OLS analysis includes a background paper on "Other Post Employment Benefits" (OPEB, essentially the same as PRM).

Here's the good news hidden away in the OLS paper (see page 40):

"Notwithstanding the unofficial estimate of $20 billion for New Jersey's OPEB liability, Mercer Consulting, a global corporate consultant firm, estimates that OPEB liability will be 40-60 times an entity's annual medical expenditures. This suggests that New Jersey's OPEB liability is in the $40 billion to $60 billion range."

NJ currently spends about $1 billion per year for retiree health care benefits. This expense category is projected to grow by more than 22% per year over the next four years.

Furthermore, due to new government accounting regulations, NJ will have to start reporting the OPEB liability on a yearly basis. The bond rating agencies will begin to include this data in their evaluations of the state's finances, which will affect future borrowing costs. I wouldn't bank on any credit rating upgrades, particularly when the OPEB liability is combined with current state debt ($33 billion and growing), unfunded pension liabilities (at least $18 billion), and endless Abbott spending requirements.

Like so many other components of the state's finances, PRM costs are out of control. However, it's a pretty good bet that feckless politicians and public employee unions will do nothing to change course as our car accelerates straight over the cliff.

NJ Economic Development

2006-05-23T09:30:00.000-04:00

Although NJ desperately needs to reform fiscal management and state government, we have no future without economic growth. You only have to take a look at a high cost, declining, Rust Belt state like Michigan to see one possible future if NJ can't stimulate growth and diversify the economy.

The National Governors Association Center For Best Practices recently released a study which reviews economic development initiatives in various states over the last year.

Quoting the study's Executive Summary:

"Most of the states’ major new economic development initiatives focused on enhancing state and regional "clusters of innovation" -- fast-growing groups of businesses that share markets, labor, new ideas, and products. To enhance these clusters and exploit the unique advantages of the region’s labor pool, educational resources, and research capacity, most development initiatives emphasized one or more of the following strategies:

-- Promoting research and development by leveraging public funds and encouraging partnerships

-- Building a skilled workforce by providing training and education to meet industry needs

-- Supporting entrepreneurs by providing seed funding and incentives for job creation

-- Developing rural areas by supporting innovations in agriculture and supporting business development

-- Supporting tourism through state funding, campaigns, and training programs

-- Improving business attraction through revitalization activities and quality of life initiatives

-- Marketing the state’s businesses through outreach campaigns and international missions and offices."

Although NJ is not mentioned in the study, we seem to be following much of the standard game plan above.

It should be noted that many other states are also targeting three industries identified in NJ's "High-Tech Recovery Plan": life sciences and biotechnology, nanotechnology, and renewable energy. Economic development is not a zero sum game, but it is competitive, and some states (and countries) will do better than others. For example, NJ's traditional strength in pharmaceuticals has been eroding over the last few years as other locations have gotten stronger.

However, economic development is not an excuse to squander money. The full speed charge into NJ's new stem cell research program already looks like a replay of the political buffoonery and plunder that characterized the spendthrift Schools Construction Corp. Is it really necessary to commit $250 million to three new research facilities at this point? Why not start with one facility in New Brunswick, the logical location, and see how that goes?

NJ is a rich state, with many talented people and other resources critical for growth. However, economic development is not a quick fix, and it is not a substitute for improving NJ fiscal management or reforming state government.

State Revenue Updates

2006-05-22T17:28:00.000-04:00

State Treasurer Bradley Abelow and the NJ OLS today released revised revenue projections for FY 2006 and FY 2007. The two sets of numbers have not been totally reconciled, but these types of revisions are normal for any large, complex budget.

The most important revelation is that Abelow now expects FY 2007 revenues to be $441 million lower than previously forecast. The primary reason for this shortfall is a lower growth rate in gross income taxes (GIT), which are substantially affected by a small number of taxpayers with less predictable incomes (eg, capital gains). The revenue shortfall also results from lower corporate business taxes (CBT) than previously forecast.

Abelow's FY 2007 figures still include the sales tax increase, and apparently still include the controversial hospital bed tax ($215 million for the state).

New Jersey Has No Power

2006-05-17T09:06:00.000-04:00

As I've noted previously, NJ ranks 50th (ie, worst) in a state-by-state comparison of Federal taxes paid versus Federal spending received. For every $1 in Federal taxes paid, NJ receives $0.55 in Federal spending. This is partly due to NJ's ineffective Congressmen.

Today, I discovered a web site that ranks Congressional power, by Congressman and by state. As you might expect, NJ ranks 49th in terms of Congressional power. Sen Lautenberg ranks 97th in the Senate (Sen Menendez was not ranked). In general, NJ Republican Representatives ranked higher than NJ Democratic Representatives.

No wonder New Jersey never gets a fair share of Federal funds.

Roberto at DynamoBuzz also has a similar post on this topic today.

NJ State Debt Disclosure

2006-05-10T08:48:00.000-04:00

One of the many reasons NJ financial management is so poor is because NJ financial disclosure is so poor. Like the managers of a badly run company, NJ politicians and bureaucrats like to avoid any form of reporting that might be used to hold them accountable.

There was a story in yesterday's news that NJ's total state debt has now increased to $33 billion, up 11.5% from last year. However, we get this information from Moody's Investors Service, not the NJ State Treasurer. In all likelihood, the Treasury Department provided the data to Moody's, but not to any NJ taxpayers.

The Public Finance Division of the Treasury Department has a web site which contains two reports related to state debt. However, the reports are incomplete and way out of date. There are no schedules in the Corzine budget proposal with more current information.

I have two recommendations.

First, the State Treasurer should be required to maintain current information on total NJ state debt on the Public Finance web site. The format of the schedule labeled "State of New Jersey Debt Analysis" is particularly useful. The web site should also include current bond ratings for benchmark state bonds from all major ratings agencies. Any links to rating agency reports would be valuable too.

Second, there should be a requirement that all budget proposals and approved budgets include detailed information and summaries of total NJ state debt (including debt service requirements for the next 3-5 years). The best figures would be outstanding debt as of the December 31 immediately preceding the next budget year (eg, 12/31/05 data for the FY 2006-07 budget year). This kind of information is standard in any large private sector budget.

Current information on total NJ state debt is easily available. There's no reason that Moody's should receive this data but not NJ taxpayers.

Pension Deficits Are Local Too

2006-05-05T10:56:00.000-04:00

Yesterday, State Treasurer Bradley Abelow indicated that a new estimate shows that the state's public employee pension system has a deficit of $18 billion. Altough I think this figure is still too low, it's certainly more realistic than the prior estimate of $12 billion, which was a total fiction based on wildly optimistic assumptions, such as inflated investment returns.

The state's pension system consolidates the pension obligations of both state government and local governments. Based on the last available details (as of 6/30/04), the local government component of the total pension deficit is roughly 30%, or $5.4 billion.

The two main pieces of the local government pension deficit are police and firemen (PFRS; 80%) and other employees (PERS; 20%). Teachers are considered a state obligation, not a local one.

As the NJ League of Municipalities has pointed out, "the cost to local government for one PFRS member is approximately three times more than the cost of a local government PERS member". Local government pension liabilities for police and firemen are driven by higher salaries, generous pension benefits (ie, income replacement ratios), and early retirement options.

The cost of local government pension liabilities is ultimately paid by local property taxes. Thus, while it's currently convenient (and mostly appropriate) to focus on the state's overall financial problems, and the shortcomings of Gov Corzine's proposed budget, taxpayers should also remember that there are major liabilities and cost drivers a lot closer to home.

Confirmation And A Warning

2006-05-03T09:08:00.000-04:00

In a prior post below, I noted that Gov Corzine's budget to add 50,000 children to the NJ FamilyCare program seriously underestimated the costs. The Office of Legislative Services (OLS) now agrees with me.

The OLS analysis of the proposed budget for the Department of Health and Senior Services includes a section on the proposed NJ FamilyCare expansion (see pages 44-45). The OLS focuses on the first year of the expansion, where enrollment increases month by month, rather than the full year costs once all 50,000 additions are in place (my earlier post).

The OLS calculates that the incremental first year cost of the expansion would be approximately $40-45 million, not $14 million as Corzine claims. Under the best case scenario, NJ's share of this total would be at least $14-16 million, not the $5 million figure included in the FY 2007 budget.

But here's the kicker (quoting the OLS):

"Federal funding is available for NJ FamilyCare (Children) at a 65% matching rate, but federal funds are capped and do not increase with enrollment or expenditures. The State's annual federal allotment is approximately $90 million. However, in past years, the federal government has reallocated unexpended federal funds from other states to support the State's program. The amount of federal funds that have been reallocated from other states to New Jersey has decreased in recent years as other states programs are now expending more of the federal funds that have been allocated for their programs."

"The FY 2006 recommended budget already assumes that over $140 million in unexpended federal funds from other states will be reallocated to New Jersey to support the current program without any increase in the number of children who are enrolled in the program. Thus, if an additional 50,000 children enrolled in the program, the entire cost may have to be paid with State funds if the federal government does not reallocate sufficient unexpended balances from other states to New Jersey."

In other words, due to lack of federal funds, Corzine's program expansion might end up costing New Jersey $40-45 million next year, not $5 million (and at least $67 million per year thereafter). Furthermore, a large portion of federal funding for the current program may also be at risk. NJ taxpayers would then have to absorb a greater share of current program costs as well.

As I said previously, Corzine's idea may be laudable. But let's start with a realistic estimate of program costs and funding sources, and let's identify the spending cuts elsewhere that would make this program affordable on a continuing basis. Otherwise, good intentions and bad math will be a ruinous combination.

All Vision, No Execution

2006-04-27T16:55:00.000-04:00

The latest creature to emerge from Dr Corzine's laboratory is the NJ Commission on Government Efficiency and Reform. As the Gov describes its mission, "I look forward to reviewing the commission’s proposals to re-engineer state government and maximize the quality of services New Jersey citizens are receiving."

Give me a f*****g break.

The last thing we need is more task force proposals.

Prior to his inauguration, Corzine set up 19 policy groups. Since the inauguration, he has created at least 2 more (including the one above). Corzine has already received a multitude of specific recommendations across the board. A small forest has been cut down to compile all the ideas. We don't need any more proposals at this point. We need to see some action. Corzine needs to quit stalling. He's supposed to be the head of the executive branch, not the think tank branch.

I'm not asking for miracles. There's plenty to choose from. Corzine has had five months to identify high priority initiatives. Pick a few and get going. It's time to start executing.

When Down Is Really Up

2006-04-27T10:17:00.000-04:00

Ken Adams has a good post about how Gov Corzine's alleged state government headcount reductions are in fact just another budget gimmick. As Ken points out, Corzine claims a reduction of 1000+ staff positions, but total headcount will actually increase by more than 1300.

Read Ken's entire analysis.

Campaign Contributions Disclosure

2006-04-26T14:13:00.000-04:00

Today I discovered a pretty good web site that tracks federal campaign contributions data for US congressmen (and candidates). The site provides useful summaries rather than raw data, and includes interesting information on Sen Lautenberg, Sen Menendez, and all NJ representatives.

Since I was on a roll, I then looked for similar information for NJ legislators. The NJ Election Law Enforcement Commission is supposed to collect this data and provide it to the public. The NJELEC web site appears to be pretty well organized but it's a little tricky to use.

First of all, you have to download some specialized software in order to view certain documents. Most of the information is presented as raw data scattered over multiple reports rather than summarized in any kind of useful format. There's no way to tell if the data is reasonable or complete. The NJELEC should follow the example of the federal data web site above to make the NJ information more accessible. In general, the site is OK but could be better.

The Mighty Carnack Returns

2006-04-25T15:20:00.000-04:00

I periodically skim Gov Corzine's press releases, and recently came across this one, "Corzine Announces Panel on Human Services Reform".

Take a look at the members of the new council ("round up the usual suspects"). Notice the absence of any beady eyed financial types to inject the occasional dose of reality.

Now here's Carnack's prediction. After months of intensive study, the council will recommend that NJ should increase spending on "human services", including almost every interest group represented on the council.

Who said vaudeville was dead?

Democrats' Dilemma?

2006-04-24T10:35:00.000-04:00

David Rebovich has a new post that's worth a visit. In general, I think he's too easy on the Democrats' responsibility for our current mess, and too optimistic about Corzine, but judge for yourself.

"In the face of a big budget deficit, Governor Corzine has decided to deemphasize his party's historic commitment to an activist government and to the notion of entitlement and instead focus on fiscal integrity and the state's long-term economic well-being. To achieve both of these goals, several key elements in the Democratic Party coalition are being asked to sacrifice..."

Your Tax Dollars At Work

2006-04-23T12:18:00.000-04:00

The NJ Assembly Republicans have put together a list of some of the many ways NJ taxes are wasted. Check it out.

Legislators' Financial Disclosure

2006-04-21T12:13:00.000-04:00

The Center For Public Integrity, a journalism organization based in Washington, DC, has just released state rankings for financial disclosure by state legislators. New Jersey received a grade of C, but ranked 10th out of 47 states that require legislators to provide such disclosure.

As described in the CPI press release, "a 43-question survey measured public access to information essential to monitoring whether legislators stand to gain financially from actions they take in office. It graded states on how much they disclose about legislators' employment, personal business activities, clients, investments, real property holdings and leadership positions in organizations. It also studied disclosure statements' accessibility, disclosure law enforcement and rules defining who must file disclosure forms and how often. Survey answers were assigned a numerical value adding up to a possible 100 points; high scores acknowledged high levels of disclosure, public access and accountability."

New Jersey scored 76 points out of 100. The highest ranked state, Washington, scored 93.5 points. According to CPI, NJ did fairly well in some categories, but lost 20 points for insufficient details in the legislators' filings.

If anything, the CPI rating seems generous. If you go to the actual NJ legislator filings, you'll see that the financial data and other details provided are pretty sparse. For example, look at the filings by Wayne Bryant or Sharpe James. Furthermore, the information is not very current.

Nevertheless, the CPI rating is useful. Like the state tax rankings by The Tax Foundation, the CPI financial disclosure rankings provide an outside assessment of a NJ weakness that's hard to discredit or ignore.

Yet Another Dumb Idea

2006-04-19T13:54:00.000-04:00

Two NJ Democratic legislators will try to determine whether some version of the new Massachusetts "universal health insurance plan" could work in New Jersey.

Here's the short answer. No.

The plan won't even work in Massachusetts.

Arnold Kling wrote a scathing critique of the new Massachusetts law, including the following comments:

"The elected leaders of Massachusetts have come up with a novel solution for the vexing problem of having to pay for health care: abolish the laws of arithmetic. Their new plan is a perfect illustration of what happens when politicians approach a problem unconstrained by reality......"

"The plan includes tax incentives and penalties for employers and individuals to get everyone covered by a health-care policy. It also promises affordable health insurance for people with modest incomes, under a program yet to be negotiated between the state and private insurance companies......"

"The question is this: What insurance company will provide coverage with $0 deductible, at an annual premium of $295, for someone whose health care costs average $6,000 a year? The numbers imply losses of over $5,700, not counting administrative costs. To subsidize zero-deductible health insurance, state taxpayers might have to pay out about $6,000 per recipient......"

"Only when the size of the necessary tax increase becomes clear will Massachusetts's leaders learn the laws of arithmetic."

In general, if the insurance premiums are very low relative to potential benefits, enrollment will explode. If the deductibles and co-pays are very low or zero, usage will explode. Both the average yearly cost and the annual state subsidy will increase. If enrollment and usage both increase simultaneously, you'll create a financial disaster.

NJ has roughly 1.3 million people without health insurance. Let's be conservative and assume 25% participation by these potential "customers", at an average annual state subsidy of $3,000 apiece. The total estimated cost for NJ taxpayers would be at least $975 million per year. 50% participation with a $6,000 subsidy would cost $3.9 billion per year.

There's no way in hell that NJ can afford such a program.

NJ Budget Cut Suggestions

2006-04-18T16:53:00.000-04:00

You can go to this NJ Assembly site to see some of the many budget cut suggestions already submitted by NJ taxpayers.

You can go to this site to submit additional budget recommendations.

Gov Corzine also has a budget suggestion site too.

Just A Thought

2006-04-14T12:39:00.000-04:00

It's no great secret that the NJ budget is stuffed with all kinds of special interest grants, such as $100,000 for the Inner City Coordinating Council of the Gay and Lesbian Construction Organizers' BLT Educational Alliance (just kidding).

NJ could save hundreds of millions of dollars if we stop this nonsense, but the legislators are afraid to cut off their supporters. However, suppose we did in fact eliminate these payoffs across the board. Everyone gets cut off at the same time.

What are the odds that the current recipients would actually switch parties? Will the Democrats' traditional voting blocs start supporting the Republicans? Will any Republican recipients suddenly decide that Democratic policies are now more attractive?

I think both parties are afraid of a threat that doesn't exist. We should call the bluff.

Long Overdue

2006-04-13T09:00:00.000-04:00

Reported in today's Record:

"Governor Corzine will hire outside auditors to investigate waste and fraud in four city school districts, including Paterson, state officials confirmed Wednesday. These cities are already under state supervision, but administration sources say the current auditors -- hired by the local school districts -- have not done a sufficient job in maintaining control and scrutiny of finances. These so-called Abbott districts receive extra state funding through a state Supreme Court order.

Teams of private sector "forensic" accountants will descend on three cities that are under direct state control: Paterson, Newark, and Jersey City. They will also examine the books of Camden."

These four cities are budgeted to receive $1.75 billion in school aid in FY 2007. Apparently it never occurred to anyone previously that professional management, financial integrity, and independent audits might be relevant prerequisites.

A Legitimate Issue Regarding Abbott

2006-04-12T14:27:00.000-04:00

The largest recipients of Abbott district school aid include Newark, Jersey City, Paterson, Elizabeth, Camden, Trenton, East Orange, Passaic, Union City, and Irvington.

Meanwhile, the NJ Department of Health and Senior Services reports the following birth statistics for 2003 (the latest available data; see pages 16-31):

Percent of Mothers Who Were Unmarried
=============================

Newark (68%)
Jersey City (43%)
Paterson (61%)
Elizabeth (53%)
Camden (80%)
Trenton (72%)
East Orange (68%)
Passaic (55%)
Union City (51%)
Irvington (63%)

Now it seems pretty obvious that the absence of a father or an unstable family life could affect a child's performance in school. As a parent and a taxpayer, I am willing to provide finite, targeted assistance to address this situation.

However, Abbott spending has become an unlimited, general subsidy for irresponsible behavior (and a bonanza for too many indirect beneficiaries). School is not a substitute for stable families or positive role models, and limitless school aid won't change this fact (no matter how many liberal judges wish upon a star).

Why should the rest of the state go bankrupt from Abbott spending when these communities are never held accountable for this conduct? Aren't we entitled to some glimmer of responsibility before we supply financial assistance?

NJ Public Sector Unions

2006-04-12T09:23:00.000-04:00

I recently came across some relevant information.

Total employment in NJ is nearly 3.9 million (2005). Public sector employment accounts for almost 638,000 jobs, or 16% of the total.

68.2% of public sector employees are covered by union contracts (64.1% are actually union members). NJ has the second highest "percent covered" ranking in the US, after NY (72.0%). The national average for public sector employees is 40.5%.

Corzine And The Court

2006-04-11T09:37:00.000-04:00

Paul Mulshine has a good column today about Corzine's Abbott court filing, which I discussed below.

Mulshine provides a key quotation from a WSJ opinion piece by David Schoenbrod, a NY law professor:

"When courts claim that they have power to make legislatures spend more to vindicate a constitutional right to basic education, they tamper with a basic tenet of our democracy -- no taxation without representation.........Voters are entitled to hold political officials accountable for the taxes they levy, the money they spend, and the education they produce."

Budget Bleg

2006-04-10T11:09:00.000-04:00

I am not familiar with most NJ legislators outside my own district. When it comes to the budget, taxes, and related issues, who are some of the key players in the NJ Legislature?

Which members of the Senate and the Assembly are providing constructive ideas and adult leadership? Which members are simply blowhards and clowns? Are the budget committee leaders heavyweights or hacks?

The floor is open for nominations.

Corzine's Court Ploy?

2006-04-09T14:10:00.000-04:00

As reported in Saturday's Star Ledger, "Gov Jon Corzine yesterday said his administration would seek approval from the state Supreme Court to freeze overall funding to the 31 Abbott districts."

If I was an optimist, I might say that this is a good step, albeit a very small one, in the right direction.

If I was a cynic, I might offer the following observations.

First of all, a freeze isn't a reduction. Even if Corzine succeeds, the Abbott districts will still receive $4.25 billion, or 37% of all funds available for NJ property tax relief.

Second, consider an alternative scenario. Corzine's people deliberately submit a weak argument for a spending freeze, and the court rejects it. Corzine then declares that his hands are tied by the court (and, inevitably, taxes must be raised). He claims credit for making the effort, but never actually jeopardizes his supporters.

Good thing I'm not a cynic.

How To Cripple A Thriving State

2006-04-09T13:15:00.000-04:00

Roberto, at DynamoBuzz, found a great article in The City Journal, "The Mob That Whacked Jersey".

The Practical Versus The Perfect

2006-04-07T16:00:00.000-04:00

When you step back and take an overview of NJ's budget, it's obvious that many of the necessary structural changes will not occur quickly (if ever). This raises the question of what is actually practical in the short term.

Over at New Jersey For Change, Chanice raises the perennial topic of public employees who "bank" unused vacations and sick days, for eventual payoff upon retirement. It seems to me that this issue falls into a category of "corrupt and corrosive practices" that could in fact be fixed this year.

Such practices not necessarily the most costly activities, but they are highly visible, and demonstrate contempt for all NJ taxpayers. The continual disclosure of these activities is a constant reminder of how too many NJ politicians and public employees place self-interest above public responsibilities. These practices undermine government legitimacy and divert attention and resources from more critical issues.

Accordingly, here is my short list of "corrupt and corrosive practices" that should be ended, and can be ended, in 2006:

(1) The practice of "banking" unused vacations and sick days should be legally terminated for all state and local government jobs. Failing that, the payouts should be capped at some minimal level (eg, not more than 10 days equivalent).

(2) The practice of holding multiple, paying state and local government jobs should be legally terminated or severely limited. (If the practice is allowed to continue, financial disclosure requirements should be widespread, detailed, timely, and consolidated into a single, statewide database.) Aside from potential conflicts of interest, these multiple job arrangements simply confirm the image of political gluttony and privilege that NJ taxpayers find so offensive.

(3) Criminal penalties for corruption and fraud need to be toughened up and enforced. To be blunt, we need to send more white collar criminals to jail. At present, prosecution is infrequent, convictions are few, and penalties are light or nonexistent. The rewards for corruption and fraud currently exceed the risks. White collar crime will only decrease if prison is a credible threat.

(4) Certain pension system abuses should be eliminated, such as using multiple jobs to boost pension benefits, giving pension credits for minimal payment jobs, including professional service contractors and vendors in the system, and continuing pension eligibility for convicted officials.

This is a short list, and I welcome any additions. My criteria were fairly simple. First, whenever I read about one of these activities I get pissed. Not the mature approach, I know, but an honest reaction, probably shared by many other NJ residents. Second, these practices can be fixed this year. These are not multi-year projects. The problems are well defined and the solutions are straightforward.

If Gov Corzine and the NJ Legislature want to increase their credibility on the topics of financial management and integrity, how about starting here. There is a symbolic value in resolving these issues that far exceeds the financial dimension.

Hidden Tax Increases

2006-04-05T13:28:00.000-04:00

Politicians love to raise taxes without leaving any fingerprints at the scene of the crime.

Gov Corzine's budget for FY 2007 includes $1.8 billion of "revenue solutions", mostly explicit tax increases (see page 55). However, this list does not include any reference to his $430 million hospital tax.

The hospital tax proposal has the apparent benefit of attracting $215 million in new Federal funds for NJ. However, Corzine also claims that since NJ hospitals will both pay and receive $430 million, there's no net cost. This may be true in the aggregate, but it omits the fact that his proposal will result in a net transfer of hospital tax revenues from suburban to urban hospitals. Based on available information, it's hard to quantify the net transfer, but my rough estimate is at least $200-250 million.

In total, NJ hospitals only make about $150 million per year, a 1% operating margin. There is no way the suburban hospitals can absorb the new tax. Therefore, a large portion of the hospital tax will ultimately shift to NJ taxpayers and NJ businesses, through higher fees and higher health insurance premiums. The tax increase is hidden but real. Corzine evades responsibility.

Update: My estimate was high. According to the NJ Hospital Association, 49 "losing" hospitals would transfer $116 million to 25 "winning" hospitals. My basic point remains unchanged.

The Trenton Trickster

2006-04-04T10:56:00.000-04:00

Gov Corzine's budget proposal for FY 2007 also forecasts a $1.5 billion deficit for FY 2008 (see page 77). Let's assume for a minute that his revenue and expense projections for these two years are not unduly optimistic (stop laughing).

Can anyone show me any substantive structural reforms in this year's budget that will make a dent in the constant growth of state spending? Public employee pension reform? Public employee medical benefits? Abbott district spending? Medicaid and NJ FamilyCare? Greater transparency for politicians' pet projects? Greater accountability for financial integrity?

If not, can anyone doubt that this year's proposed state tax increases must be followed by another round of state tax increases next year? $1.8 billion of "revenue solutions" in FY 2007 will be followed by another $1.5 billion in FY 2008. Moreover, the continuing diversion of income taxes must surely lead to further local tax increases.

Corzine's budget is like a magic show, a flurry of artful gestures to hide the fakery of the performance.

State Of Disunion

2006-03-30T10:01:00.000-05:00

Apparently NJ is under attack. Our #46 ranking in individual income taxes and our #50 ranking in business taxes are not secure. Otherwise, how else to explain a new proposal by the New Jersey Education Association (NJEA) and the Communications Workers of America (CWA), two powerful NJ unions, for a $462 million increase in individual income taxes, and a $300 million increase in business taxes.

Maybe they figure the best defense is a good offense. After all, it's the gluttony of unions like the NJEA, the CWA, and others that is one of the major factors in NJ's current distress. God forbid that they should ever be held accountable for their role in this fiasco. Better to create a diversion and deflect attention elsewhere.

NJ is one of the most heavily unionized states in the country, which is one reason we keep electing zombie Democrats for state and national offices. Lockstep adherence to ever-increasing taxes and profligate spending is destroying the state, and driving both people and businesses away.

When your political philosophy is based on grievances and entitlements, you need a steady supply of "oppressors" and suckers. One day, the NJ unions will wake up and find themselves all alone. Who will they blame then? Who will be left to pay their bills?

Criticizing The Courts

2006-03-28T10:53:00.000-05:00

Fairleigh Dickinson University conducted a brief poll of NJ voters in late February and early March. The basic topic was courts that "legislate from the bench", that is exceed judicial authority and take on a legislative role. A good example in NJ would be the benchmarks, scope, and expense of Abbott district remedies mandated by the NJ Supreme Court.

One of the questions in the FDU poll asked "In your opinion, how serious a problem is it that New Jersey courts legislate from the bench?"

The answers were as follows:

All Responses
==========
Very Serious (33%); Somewhat Serious (33%)

Republicans
=========
Very Serious (49%); Somewhat Serious (26%)

Democrats
========
Very Serious (22%); Somewhat Serious (36%)

I don't find these results as suprising as the answers to another question "In your opinion, how serious a problem is it that New Jersey courts rule on the basis of what their political party wants?"

All Responses
==========
Very Serious (59%); Somewhat Serious (21%)

Republicans
=========
Very Serious (64%); Somewhat Serious (20%)

Democrats
========
Very Serious (55%); Somewhat Serious (23%)

In other words, even NJ Democrats, who benefit from politically-motivated judicial activism, recognize the corrosive effects of such a philosophy, effects which diminish judicial credibility for everyone.

You're Going To Love This

2006-03-24T12:07:00.000-05:00

How Liberals Go Broke (Part 2)

Is Corzine sleazy, or just incompetent?

In July 2005, Gov Codey signed a bill that expanded the NJ FamilyCare program (S2236 / A3724). When I researched this bill, I came across some very interesting information.

The Office of Legislative Services (OLS), which provides professional, nonpartisan staff support services to the NJ Legislature, analyzed various costs related to the NJ FamilyCare program (go to page 6 of this June 2005 Senate Budget Committee report). The OLS found that the state spends $113 per month for each child in the program. For every additional 10,000 children, the gross annual cost (paid with both state and Federal funds) would be $13.6 million. Thus, the cost of an additional 50,000 children would be $68 million per year, not $14.3 million as Corzine claims in his proposed budget.

Let's see, off by over $50 million. So much for the Wall Street wizard. So much for Corzine's credibility.

How Liberals Go Broke

2006-03-23T10:30:00.000-05:00

Gov Corzine wants to add 50,000 children to NJ FamilyCare, a health insurance program. This may in fact be a laudable idea.

However, he tells us it will only cost $14.3 million (including $9.3 million in Federal funding). This is laughable, not laudable.

As I noted in a prior post, the NJ Hospital Association estimates that NJ hospitals spend $250-300 million per year providing medical care to illegal immigrants. Since there are approximately 350,000 illegal immigrants in NJ, this works out to about $785 per person per year.

Let's be conservative, and assume $500 per child per year. Multiply $500 by 50,000 and you get $25 million per year.

Now the difference may not seem like very much, but the program's financial requirements will only grow in the future. Medical costs are difficult to control (would $500 cover your child?). Politicians and interest groups will constantly push to expand enrollment. Unless Corzine can guarantee that Federal funding will continue to cover 65% of program costs forever (anybody want to make that bet?), NJ is once again increasing the fixed cost base.

Good intentions and bad math are a ruinous combination.

As I said, Corzine's idea may be laudable. But let's start with a realistic estimate of program costs, and let's identify the spending cuts elsewhere that will make this program affordable on a continuing basis.

Footnote: Some participants in NJ FamilyCare pay small monthly premiums. Corzine's budget commentary does not indicate that this would be true for his new initiative.

Up In Smoke

2006-03-22T17:08:00.000-05:00

According to pages 47 and 55 of the Corzine budget, raising the cigarette tax to $2.75 per pack will generate an additional $80 million in revenues.

According to the revenue schedule on page 104, total cigarette taxes will decrease from $640 million in FY 2006 to $491 million in FY 2007.

Maybe they should lower the tax instead.

Update: Great minds think alike. Enlighten New Jersey has a similar post on this topic.

Update: An explanation has emerged. Back in FY 2005, the state sold $2.5 billion in bonds to "balance" the budget. The bonds were backed in part by future cigarette taxes. The FY 2007 budget includes the first bond payments of $211 million, which reduce total cigarette tax revenues.

NJ Debt Update

2006-03-22T10:33:00.000-05:00

In a prior post below, I estimated that long-term debt already incurred by the state and various funding agencies was at least $20-25 billion. Well, the "at least" part was correct.

Page 4 of the Corzine budget reveals that NJ bonded debt reached $30 billion in FY 2006. This figure does not include further borrowings for new transportation projects (at least $6 billion) or incremental Abbott district school construction (at least $10 billion).

The comparable figure in June 2003 was $18.6 Billion. LT debt has increased 61% in three years!

Corzine Budget And Abbott Districts

2006-03-22T09:06:00.000-05:00

Continuing my rant from yesterday, Gov Corzine forecasts $11.62 Billion from individual income taxes in FY 2007. However, page 26 indicates that total state aid to the Abbott districts (including preschool) will reach $4.25 billion.

In other words, 37% of potential property tax relief has been confiscated from the majority of NJ communities to benefit a select few.

Update: FY 2007 state aid figures by county and by school district are now available at this site. It's not clear to me whether or not these numbers include $243 million identified for Abbott preschool programs, but I think not.

The Black Holes Of NJ

2006-03-21T13:32:00.000-05:00

Black holes swallow light and matter. Abbott school districts swallow NJ taxes.

According to the NJ State Constitution (Article VIII, Sec I, Par 7), individual income taxes can only be used to reduce or offset property taxes. The money is usually returned to taxpayers through school aid, municipal aid, or property tax rebates. In FY 2006, these three categories will total roughly $11.5 billion.

Unfortunately, the constitution allows wide discretion in establishing formulas for the distribution of such funds. As a result, there is nothing to prevent a massive redistribution of money from some communities to others. Abbott district spending is the inevitable result.

The largest component of school aid is direct payments to school districts. In FY 2006, these payments should total $6.9 billion.

According to the NJ Department of Education, the 31 Abbott districts will receive around $2 billion in FY 2006 for "parity aid", "supplemental aid" and preschool programs. Until recently, given the size of the number, I assumed that this figure pretty much covered everything for these districts, except for construction costs, which are handled separately.

However, acting on a hunch, I went back and added up all of the direct school aid payments to these 31 districts . It turns out that the Abbott districts will receive over $3.8 billion in FY 2006, 55% of all direct payments and 33% of total school aid, municipal aid, and property tax rebates. The largest recipients include Newark ($687 million), Jersey City ($420 million), Paterson ($362 million), Elizabeth ($246 million), and Camden ($244 million).

Gov Corzine is starting to beat the drum for consolidation and/or regionalization of municipalities and school districts. His basic argument is the need for consolidation cost savings to offset property tax increases. This may be a valid reason, but it's also somewhat misleading. The massive redistribution of funds from many NJ communities to the Abbott districts is a major contributor to financial pressures at the local level. Consolidation cost savings won't make a dent in property tax burdens unless Abbott district spending is also brought under control.

Update: The FY 2007 Corzine budget proposal that was released this afternoon contains revised estimates for FY 2006. The figures above were based on previously available information. The new estimates are generally similar to the prior ones, and do not change my basic thesis.

Pension Plan Update

2006-03-20T09:46:00.000-05:00

In a prior post below, I commented on NJ's unfunded pension liability. In a subsequent update, I calculated that the "official" figure of $12.1 billion should be at least $5 billion higher. It turns out I was an optimist.

An article in yesterday's NY Times included a brief section on how NJ's pension situation affected the upcoming budget. In the article, Orin Kramer, the chairman of the council which oversees the pension funds, provided some additional infomation:

"Mr Kramer declined to put a number on the deficit in an interview last week. But recently, using more conservative assumptions about the return on investments than the governor's panel did, he estimated the deficit at more than $30 billion."

That's "Good News #1".

Here's "Good News #2".

The estimation of future pension payments is fairly straightforward compared to the estimation of future post-retirement health care benefits. The current "official" estimate of NJ's unfunded health care liabilities is at least $20 billion. Given the uncertainty of the unfunded pension liability, who wants to place a bet on the real number for health care? $40 billion anyone?

Haste Makes Waste

2006-03-17T08:50:00.000-05:00

Gov Corzine set up a committee to review the NJ School Construction Corp, our latest state fiasco. They have just released their first report, which includes this summary:

"The speed with which a [school facilities] project could be constructed became the primary driver for the Corporation’s activities. Management, accountability, reporting, cost control and transparency all took a secondary priority, if recognized at all, to speed. The result is also well known."

Criminal stupidity. Our new state motto.

Quinnipiac Poll Results

2006-03-16T14:59:00.000-05:00

FYI, Quinnipiac University has just released the results of a recent NJ poll. Since I'm not a poll pundit, I'll just point you to the appropriate link.

Federal Taxes And Federal Spending

2006-03-16T10:50:00.000-05:00

The Tax Foundation has published an update to their annual state-by-state comparison of Federal taxes paid versus Federal spending received. I had previously posted about this topic below.

For the fourth consecutive year, NJ ranked #50 (ie, worst). For every $1 in Federal taxes paid, NJ received $0.55 in Federal spending. For FY 2004, NJ's "balance of payments" deficit was $34.6 billion, a big deal given our current financial situation.

As the report notes, "Thanks to a steeply progressive federal income tax, states with higher incomes pay vastly higher federal taxes, payments that are unlikely ever to be matched by federal spending directed to those states. Ironically, most of these high-paying states are the so-called blue states that have generally elected politicians who support a more steeply progressive tax system even though their own constituents bear a greater share of the burden as the code gets more progressive." To be blunt, Democratic grandstanding on income taxes ("tax the rich") ultimately hurts NJ residents.

There's another reason NJ residents get hurt. States like NJ, NY, and Massachusetts suffer from an excess of politicians with national ambitions. As a result, they spend too much time campaigning for higher office and too little time representing their states. They never stay in place long enough to acquire sufficient seniority or expertise to increase Federal funding for their states. They seek out TV exposure rather than more mundane responsibilities with greater practical impact. They do a poor job of organizing effective coalitions with other politicians from similar states. Corzine is a perfect example. The irony now is that Governor Corzine must deal with the consequences of Senator Corzine's shortcomings.

(Lautenberg's problem isn't national ambition. He's just ineffective.)

Update: The next worst state on the list was Connecticut, which received $0.66 in Federal spending for every $1 in Federal taxes paid. If NJ only reached that level, we would receive over $8 billion in additional Federal funds every year.

Lautenberg's Good Idea

2006-03-14T08:34:00.000-05:00

One of Washington's regular food fights involves increasing the national debt limit. The dispute is largely pointless, but provides ample opportunity for partisan grandstanding.

Amidst the usual bickering, NJ's Senator Lautenberg (D) actually came up with a good idea: federal debt would have to be disclosed on federal tax forms.

I propose the same idea for NJ. All NJ tax forms would have to prominently disclose the amount of outstanding state debt, unfunded pension and health care liabilities, future obligations for Abbott district construction and transportation projects, etc.

I'll bet that $70+ billion in liabilities on our tax forms would get some attention!

NJ Democrats should follow the lead of their colleague in Washington.

We Want Your Input

2006-03-13T17:20:00.000-05:00

Both Gov Corzine and the NJ Legislature provide online forms for NJ residents to comment on the budget, taxes, or other topics. This is a good idea.

So why are the input boxes for comments roughly the size of postage stamps?

Could it be that they really don't give a damn what you think, and the online forms are just a cynical PR stunt?

Personally, I could never believe such a thing.

Prof Sabrin's Recommendations

2006-03-13T10:24:00.000-05:00

Murray Sabrin, a business professor at Ramapo College, publishes his recommendations for NJ's finances.

I don't think all of them are practical, but many of the ideas are good.

I am somewhat ambivalent about amending the NJ Constitution. On the one hand, it seems to be the only way to rein in Abbott district spending. On the other hand, I am not confident that the amendment process, once started, has enough built-in safeguards to protect NJ residents from irresponsible politicians and interest groups. I see a great potential to make our financial situation much worse, and little reason to trust any of the likely participants.

One Dimensional Thinking

2006-03-10T13:57:00.000-05:00

As you know, Gov Corzine has been leading a series of budget meetings throughout the state this week. One of his staff members, State Treasurer Bradley Abelow, has prepared a presentation to summarize the current situation.

It's not a bad presentation, but as I went through it I realized that it's a very misleading document. In essence, the document tells us that current state programs and projected expense growth exceed the funding base of recurring revenues necessary to support this spending.

This is common knowledge, so what's my objection?

First of all, believe it or not, the presentation actually sugarcoats the problem. There are no figures to indicate the true magnitude of NJ's outstanding debt, unfunded liabilities, and Abbott construction obligations.

Based on available information and my best estimates, NJ is currently obligated to pay at least $65-70 billion for just the following items: (a) long-term debt already incurred by the state and various funding agencies (at least $20-25 billion), (b) unfunded pension liabilities (at least $15 billion), (c) unfunded post-retirement health care benefits (at least $20 billion), (d) incremental Abbott district school construction (at least $10 billion). Even though these costs will be spread out over many years, this is a major problem for a state with only 8.7 million residents.

Furthermore, as the latest transportation financing scheme illustrates, politicians will always take the easy way out. "Pay as you go" will never beat "borrow more money and dump the problem on somebody else in the future".

To use an analogy, NJ has $50,000 in yearly income and a $1 million mortgage. Our monthly payments don't even cover the interest, and the debt is growing continuously. There's no happy ending for a situation like this, and refusing to acknowledge the problem doesn't solve it.

Which brings me to my second point. Abelow's presentation basically takes current programs and expense growth as a given and leaves us to draw the inevitable conclusion: the only solution is higher taxes. Ironically, given the title "Restructuring New Jersey's Future", there is very little in the document about actually restructuring the most significant programs and factors that drive state spending, like the items above.

Now I understand that this week's budget meetings are only the first round in the budget process. Furthermore, Corzine and the legislators are jointly responsible for addressing and negotiating these issues. However, unless Corzine and Abelow show true commitment to major structural change it's never going to happen, and NJ's fate will be more pain but no gain.

Update: A recent Star-Ledger article reports that (e) incremental borrowings for transportation projects will further increase state debt by at least $6 billion, plus billions more in additional interest expense.

The Circus Comes To Town

2006-03-02T11:40:00.000-05:00

Gov Corzine will host three regional forums on March 7-9, to discuss budget issues with NJ residents.

These types of meetings are usually PR stunts, but may be worth attending anyway, as long as you understand the ground rules. I would go if I didn't already have a prior commitment.

It's Not Just Property Taxes

2006-03-01T10:36:00.000-05:00

The Tax Foundation has just released the latest version of the State Business Tax Climate Index.

New Jersey ranked #49 overall (down from #47 previously). Only New York was worse.

The State Business Tax Climate Index is based on five components:

(1) a Business Tax Index
(2) an Individual Income Tax Index
(3) a Sales and Gross Receipts Tax Index
(4) an Unemployment Tax Index
(5) a Wealth Tax Index

The Business Tax Index is based on business tax rates and the business tax base (including the definition of taxable income). NJ ranked #50 on this index (down from #47 previously).

For the Individual Income Tax Index, NJ ranked #46 (down from #37 previously).

For the Sales and Gross Receipts Tax Index, NJ ranked #27 (down from #23 previously). However, Gov Corzine is apparently considering a gross receipts tax, so our ranking here will probably deteriorate more in the future.

For the Unemployment Tax Index, NJ ranked #27 (down from #26 previously). However, the state's Unemployment Insurance Trust Fund is nearly insolvent, due to constant diversions to fund other state programs. An unemployment insurance tax increase is unavoidable. Hence, NJ's future ranking will deteriorate here as well.

The Wealth Tax Index includes a variety of items, such as property taxes, capital stock taxes on corporations, asset transfer taxes, etc. NJ ranked #46 on this index (a slight improvement from #48 previously).

New Jersey is a state with many resources and talented people, but these are serious numbers. Who will remain to pay the bills when there are so many better alternatives elsewhere?

Fool's Paradise

2006-02-28T11:41:00.000-05:00

Testifying yesterday in Trenton, Acting Transportation Commissioner Kris Kolluri made the following statement about Corzine's stopgap transportation proposal, which includes new borrowing:

"What this five-year plan does, it doesn't take away the ability of the Legislature and the governor to meet to decide what the long-term fix is. What that revenue fix is, folks like you will have to decide."

First of all, the ability to fix a problem isn't helped by deliberately and rashly making the problem worse. When you find yourself in a hole, stop digging. When you find yourself insolvent, stop creating new liabilities.

Second, Kolluri basically takes the position that transportation spending and funding is totally isolated from any other decisions about NJ spending and funding. This is a world without resource constraints, priorities, or tradeoffs, a politician's paradise. Unfortunately for Corzine and Kolluri, NJ residents are smart enough to know that "revenue fix" is not the road to paradise.

Pension Plan Pretend

2006-02-24T14:19:00.000-05:00

According to the NJ Benefits Review Task Force (December 2005), NJ's public pension plans (for both state and local employees) have an unfunded liability of $12.1 billion.

True or false?

Almost certainly false. The real number is bigger, maybe much bigger.

First of all, the liability figure was calculated as of June 30, 2004. The chance that this number has decreased since then is lower than your chance of winning the lottery.

Second, and here's my real point, the calculation of the unfunded liability involves a major dubious assumption: the future investment return on pension plan assets.

If an actuary assumes that future investment returns on current plan assets will be high, then future pension plan contributions may be reduced. Of course there's a day of reckoning if investment returns fall below your assumption, and pension plan contributions have to be boosted to make up for a shortfall in plan assets.

NJ's public pension plans currently assume a future investment return of 8.75% per year. This rate was mandated by the State Treasurer in 1992. However, back in the real world, investment performance has been quite a bit lower. Over the last seven years (FY 1999 through FY 2005), the actual cumulative return has been around 4.46% per year (4.29% per year lower than assumed). If the total market value of plan assets is now roughly $75 billion, a similar shortfall in future investment performance would add billions per year to the unfunded liability, unless offset by dramatically increased pension plan contributions.

Pension plan valuation and accounting is a complex area. Small changes in key assumptions have a dramatic financial impact. Actuaries and accountants use various smoothing techniques to handle fluctuations in investment return and plan assets. And, as you've also heard, "past (bad) performance is no guarantee of future (bad) performance". Nevertheless, an investment return assumption of 8.75% per year would be considered aggressive (to put it kindly) anywhere in the private sector. Given NJ's dismal record in all things financial, it's little short of delusional.

The unfunded pension liability of $12.1 billion is way too optimistic. A more realistic investment return assumption would increase the number, maybe by a lot.

Update: Based on a rough calculation, an investment return assumption of 8.00% per year would increase the unfunded pension liability by more than $5 billion.

And Your Point Was?

2006-02-22T17:16:00.000-05:00

A few comments to elaborate on my post immediately below.

As my growing list of links should indicate, there is a tremendous amount of data available regarding NJ state and local finances. In fact, the volume is overwhelming, primarily because too many details are presented as little more than a massive data dump accompanied by standard bureaucratic commentary that explains very little. As a result, trying to locate and isolate key financial indicators is a major undertaking. Although I have private sector experience with complex budget analyses, I doubt that many other NJ residents would be able to figure this stuff out.

On the other hand, I don't think you have to be a rocket scientist to identify 20 - 30 key variables that would give NJ residents a very good overview of the state's financial situation, including trends over the last few years. The two variables I selected below, total state debt and total unfunded pension and healthcare liabilities, are pretty basic. The failure to make this kind of data easily available is one way politicians and bureaucrats avoid accountability.

Another problem is the lack of appropriate summary reports. The NJ state government is a complex organization, but that's no excuse for failing to aggregate financial data into more comprehensible units. If you review the currently available reports, most of the top level summaries still include long lists of detailed items, and intermediate level summaries frequently don't exist. There's no way you can analyze and manage the state's financial situation if all the data is presented simultaneously, and you constantly have to flip back and forth between various reports and schedules to try to assemble the relevant pieces in your own mind.

My final point for today is the need for more timely financial information. If you look at some of the dates in my link list you can see that the most recent figures for many kinds of data are 2 - 3 years old. Now I understand some of the reasons for delays in the accumulation of data and publication of financial reports. But I also understand that failure to produce timely reports is another way to evade accountability. This is true in both the public and private sectors. There's no reason to trust our state government if they're unable to provide an accurate description of our current situation.

First Suggestion

2006-02-22T16:22:00.000-05:00

As I noted back on February 9, the NJ Legislature is soliciting suggestions re NJ spending and (my interpretation) related matters. I sent the following ideas this morning.

"NJ residents can't assess whether or not budgets are reasonable without more "transparency" and "timeliness" in the state's financial reporting.

Too much key financial data is scattered across numerous state departments and reports, or buried under a mountain of extraneous details. There should be a single web site that is easily accessible to all NJ residents that summarizes key financial indicators, or provides links to appropriate summary reports.

For openers, I would like to see the following items included at such a site:

(1) An up-to-date presentation of the consolidated outstanding debt of the state and all other debt-issuing enitities such as the Economic Development Authority, the NJ Schools Construction Corp, the Transportation Trust Fund Authority, the Educational Facilities Authority, the Higher Education Student Assistance Authority, etc. The presentation could look like the following out-of-date report: link 1.

(2) An up-to-date presentation of the consolidated, actuarial, unfunded pension and healthcare liabilities for all past and current public employees covered by the state, including PERS, TPAF, PFRS, SPRS, SHBP, etc. The currently available data is out of date and scattered across multiple reports: link 2.

The site should also include time series data (eg, last three years) to show the relevant trends for all key financial indicators."

We're All Doomed, Doomed I Tell You!

2006-02-17T16:22:00.000-05:00

The NJ Department of Education has just released the FY 2005 Annual Report on the School Facilities Construction Program. It's a pretty long report, and I'm still working my way through it. However, I already know the punchline.

According to the DOE, it will take a minimum of $12.8 billion in additional spending, over and above the $6 billion already committed, to complete Abbott District school construction. Furthermore, Abbott Districts currently receive $2 billion per year in state aid for operating expenses.

Pretty soon the State of New Jersey will be renamed Abbott Take All.

Trenton Twaddle

2006-02-15T08:22:00.000-05:00

The Corzine transition team report on property tax reform is a cynical piece of work. The basic thrust of the document is how to steer "reform" past the legislature, a state constitutional convention, and the voters. There's also an element of "bait and switch" involved: the enticement of slightly larger rebates is used to divert attention from the notable absence of specific reform proposals. "Pay no attention to the politicians behind the curtain!"

However, the most outrageous feature is the attempt to preclude any discussion of state spending simultaneously with tax changes. The document alleges that all state spending is already adequately covered by annual budget reviews, and therefore further discussion is unnecessary. This is simply not true.

For example, "Abbott school spending", which currently exceeds $3 billion per year, is based on a NJ Supreme Court interpretation of the "thorough and efficient" education clause in the NJ Constitution. Abbott spending is not subject to review or control by annual budgets. The only way to balance Abbott requirements against the state's financial resources is through a constitutional amendment.

Since funding and spending are intimately related, and since property tax reform would require a state constitutional convention anyway, why is it so illogical to consider spending issues like Abbott at the same time? Says the transition team, "combining the spending side with fundamental tax reform will doom the effort".

Maybe so, but let's get real. First of all, despite soothing phrases like "revenue neutral", "tax reform" is a code name for "tax increase", maybe not today but certainly tomorrow. The preferred method is usually some form of built-in escalator that lacks any trace of legislators' fingerprints.

More to the point, you don't cure a drug addict by giving him better funding. With an addict, lack of self-control destroys conduct and credibility. With NJ politicians, a history of disastrous financial practices nullifies any right to limit debate or obtain unconditional tax revenues.

NJ Healthcare and Unfunded Mandates

2006-02-13T12:59:00.000-05:00

Unfunded mandates occur when the Federal government imposes certain statutory or regulatory requirements on a state or local government without providing any funding for the related costs. Since this happens so frequently, the term "unfunded mandate" usually only refers to those situations where the unfunded costs are particularly large.

Most of the time, state or local governments incur the costs directly (eg, by hiring new employees to comply with new requirements). However, state residents can also absorb the costs of unfunded mandates.

One relevant example in NJ is the provision of healthcare to illegal immigrants.

Federal law requires hospitals to treat anyone who enters an emergency room, regardless of the ability to pay. There is no requirement to verify whether or not the patient is a citizen or legal resident. Furthermore, many immigrants use hospital emergency rooms as primary care providers.

In theory, the Federal government enforces immigration law, to minimize the number of illegals. In fact, the Federal government does almost nothing to enforce the existing law these days.

The most reasonable estimates of the number of illegal immigrants in NJ are somewhere around 300,000-400,000 individuals, roughly 4% of the state's population. NJ hospitals spend a minimum of $200 million per year to treat this group (and the true figure could be much larger). The Federal government only provides around $6 million in yearly funding.

So who pays the rest? NJ residents ...... either directly through higher medical fees or indirectly through higher medical insurance premiums.

The only good news is that NJ hospitals are in somewhat better shape than hospitals along the US/Mexican border. Many of them are nearly bankrupt.

The US is a land of immigrants, but uncontrolled immigration imposes tremendous costs. If the Federal government won't enforce immigration law, it should at least provide adequate funding to deal with the consequences.

For further details, go to this link.

Update: The NJ Hospital Association estimates that NJ hospitals spend $250-300 million per year providing medical care to illegal immigrants.

Jon Corzine and Florio's Legacy

2006-02-11T13:59:00.000-05:00

David Rebovich has an interesting post today, "Jon Corzine And The Legacy Of Jim Florio".

While he makes the case that tax increases are probably inevitable, he omits one critical reason for NJ residents' antipathy to any "logical solution" to our state's financial mess: a well-founded skepticism that any additional funds raised won't be pissed away yet again.

I once read that the keystone to our "voluntary" tax system is the citizens' belief that taxes are fairly collected and wisely spent. Few people in NJ believe the latter.

NJ Subsidizes Arizona and Virginia

2006-02-10T09:56:00.000-05:00

In 2003 (the latest available figures), NJ paid nearly $20 billion more in Federal taxes than it received in Federal spending, and ranked #50 among all states. In fact, since 1981, NJ has consistently ranked #49 or #50 in this category.

By contrast, Arizona received $10 billion more in Federal spending than Federal taxes paid, and Virginia received $35 billion more in the same year.

Some of the differences in state performance can be explained by factors such as the presence or absence of large retiree populations (think Social Security and Medicare payments), large numbers of Federal employees, or large numbers of military personnel or defense installations.

However, the fact remains that the State of NJ and NJ's Congressmen have done a lousy job in obtaining Federal funds for the state. This "balance of payments deficit" is a tremendous financial drain on the state.

There is also another responsible party, NJ voters who consistently vote Democratic.

Consider the situation from a Washington perspective. If you're a Washington Democrat, there's no reason to help NJ, because you know you'll always get the votes regardless. If you're a Washington Republican, there's no reason to help NJ, because you know you'll never get the votes, so why bother.

New Jersey's interests would be better served if NJ voters were less predictable and both parties actually had to compete for votes.

Help Cut NJ Spending

2006-02-09T12:31:00.000-05:00

The NJ Legislature has set up a web site where residents can send suggestions on how to cut NJ spending. The pessimists among you will probably assume this is political grandstanding. However, I' m going to take an optimistic viewpoint and send in a few ideas (to be outlined in a future posting).

In addition to direct spending by the state, it might also be useful to suggest changes to state laws and practices that drive up local spending. In my community, for example, one of the fastest growing categories of school spending is "special education". I have no problem with legitimate special ed spending, but my sense is that excessive state regulations and overly broad screening criteria are inflating the costs.

(This topic was also noted by DynamoBuzz and Enlighten New Jersey.)

(b) We're Number 42

2006-02-08T13:47:00.000-05:00

In November 2004, the Pacific Research Institute published another comparison of states, the US Economic Freedom Index 2004 . The report focused on state and local government actions as they relate to "the right of individuals to pursue their interests through voluntary exchange of private property under a rule of law".

In this study, New Jersey ranked #42 overall.

Similar to the BHI analysis below, PRI used 143 variables grouped into five sectors:

-- fiscal (eg, taxes, state/local government expenditures)
-- regulatory (eg, labor laws, environmental laws)
-- judicial (eg, tort reform indicators, elected or appointed judges)
-- government size (eg, number of government employees)
-- welfare spending (eg, amounts redistributed through direct transfers)

Within each sector, states were sorted into groups of ten. The highest rank group received 5 stars; the next group, 4 stars; and so on.

NJ's sector scores were as follows: fiscal (1 star), regulatory (2 stars), judicial (3 stars), government size (4 stars), and welfare spending (3 stars).

(a) We're Number 37

2006-02-08T08:09:00.000-05:00

Back in December, the Beacon Hill Institute in Boston released a study called the State Competitiveness Report 2005. As described in the press release, BHI defines competitiveness as "the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth".

New Jersey ranked #37 overall.

The report assigned 42 variables to eight categories:

-- government and fiscal policy
-- security (eg, crime rates)
-- infrastructure (eg, high-speed lines, housing costs)
-- human resources
-- technology (eg, R&D, scientific/engineering labor force)
-- business incubation (eg, available funding, new firm formations)
-- openness (eg, foreign direct investment, residents born abroad)
-- environmental policy

Although some of the variables seemed a little quirky (air passengers per capita?), most were reasonably conventional. The eight categories were then combined into a single "competitiveness index".

NJ's category rankings were as follows:

-- government and fiscal policy: #43
-- security: #7
-- infrastructure: #49
-- human resources: #15
-- technology: #24
-- business incubation: #13
-- openness: #12
-- environmental policy: #50

In addition to poor rankings for state & local taxes (#37) and the state budget deficit relative to GSP (#35), NJ also ranked poorly for housing costs (#49), travel time to work (#48), the percentage of the labor force represented by unions (#46), "toxic release inventory" (#42), and carbon emissions (#50).

Update: Due to a data input error, BHI revised the rankings in Feb 06. New Jersey's overall ranking improved slightly, from #37 to #34.

NJ Tax and Spending Data

2006-02-07T12:03:00.000-05:00

As you can see to the right, I've been able to accumulate a fair number of links regarding NJ tax and spending data, as well as relevant comparisons to other states.

In many cases, the only available figures are a few years old, due to lags in data accumulation by NJ and the federal government. However, these figures still provide a pretty good sense of how the state revenues and expenses fit together (or not), and the general magnitude of the sums involved. The greatest deficiency is the lack of timely and comprehensive data regarding the state's overall debt position as well as unfunded pension and healthcare liabilities.

The relative state rankings are probably pretty stable over the last few years, since the underlying economies, tax policies, laws, etc don't change as quickly as other factors. It's also necessary to remember that there may be significant differences in the relative funding mix of local property taxes, local sales taxes, state sales taxes, and state income taxes. Although NJ's property taxes are higher than most other states, sales tax per capita is lower than many.

Spacing Problem Solved

2006-02-06T16:18:00.000-05:00

I figured out how to handle the horizontal spacing problem. I'm almost done with the initial phase of getting this blog up and running. Now it's time to start focusing on more substantive issues.

Struggling With Blogger

2006-02-06T08:56:00.000-05:00

I am a total blog novice. For the most part, I'm happy to use Blogger's standard features because I simply don't have the time to learn and construct anything more elaborate. However, I would like to know how to fix a horizontal spacing problem.

I thought the blog's layout was basically OK, until I compared the blog's appearance on my desktop to my wife's laptop. We both use basically the same version of IE. On the laptop, the green vertical borders on the far left and far right are much wider than on my desktop. As a result, the main text section and the sidebar are crunched together on the laptop, and the sidebar links look crappy.

I went to the Settings/Template section, but was not able to figure out what to change. I can sort of figure out the HTML, but I couldn't identify how to shrink the width of the green vertical borders. Can this problem be fixed fairly easily, or am I screwed because I'm using a standard Blogger template style ("Son Of Moto")?

Any help would be appreciated.

Making Some Progress

2006-02-03T16:17:00.000-05:00

The link list is growing. So far, I have not been able to find a good breakdown of membership figures for each of the various public sector unions. I know that total union membership for the state (for both public and private sectors) is around 800,000.

I'm also looking for a reasonably succinct explanation of the multiple methodologies used to allocate property tax funds back to the local school districts. I found a budget document from the NJ Department of Education that shows the various allocation categories (eg, Special Education), but not the underlying formulas. Any help here would be appreciated.

Looking For Links

2006-02-02T09:28:00.000-05:00

Although most blogs put the initial focus on commentary, I have decided to first concentrate on building up a "database" of relevant links. I am therefore looking for suggestions.

I am most interested in links related to the following kinds of topics:

-- NJ finances,
-- NJ taxes,
-- NJ debt ratings,
-- "mandatory" versus "discretionary" spending,
-- hidden NJ financial liabilities,
-- the local financial impact of new state regulations,
-- the allocation methods for property tax relief funds,
-- accurate and timely disclosure of NJ financial data,
-- NJ public employee compensation data (salaries/benefits/pensions),
-- NJ economic strength,
-- relevant comparisons of NJ to other states,
-- "regionalization" of municipal services,
-- relevant public policy organizations and papers,
-- independent analyses of NJ's financial situation,
-- "key players" to fix the problems,
-- etc.

Since many NJ bloggers already do a good job of commenting on day-to-day events, I am more interested in links related to longer-term trends and proposed solutions.

I also want to add bloggers (or other commentators) in NJ or elsewhere who focus on these issues.

Please feel free to contact me with any other comments or suggestions.

Let's See What Happens

2006-02-01T12:10:00.000-05:00

This blog is an experiment, by a long-time Bergen County resident.

The original idea was to provide a focal point for "organized resistance" to the individuals and organizations responsible for NJ's deteriorating financial position. However, it quickly became apparent that the task was too ambitious for a single blogger.

Therefore, my current plan is to begin to accumulate relevant links and commentary on this topic, and then see what happens.