Monthly Archives: June 2010

You Can Fool Some Of The People Some of The Time, But…

Two more local media members have chimed in on the the smoke and mirror attempt by the Middletown Republicans lead by Gerry Scharfenberger, his fellow GOP members on the Township Committee and new CFO Nick Trasente, to whitewash, sugarcoat and flat out mislead the public with Monday night’s budget introduction.

As I said earlier, Trasente did a great job at towing the proverbial company line,making it seem the local tax burden was only going increase by 2.8% when in actuality the municipal tax rate will skyrocket by more than 13% once this budget is adopted.

The reporters for both the Independent and RedBankGreen.com, Andrew Davidson and Dustin Racioppi with their articles Township proposes tax increase of 13 percent and BUDGET INCREASES, BUT BY HOW MUCH? did a great job at seeing through the rouse and I recommend that both articles be read.

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Filed under budget introduction, Gerry Scharfenberger, Middletown GOP, Middletown Township, Nick Trasente, RedBankGreen.com, tax increase, the Independent

Middletown’s Budget Introduction Was A Farce And Blatant Attempt to Mislead The Public

Last nights special meeting to introduce the FY 2010 municipal budget was, to put it mildly, a farce and a blatant attempt to mislead residents and those in attendance into believing that all was well.
Middletown’s CFO Nick Trasente, presented a powerpoint slide show that did more to highlight how great Middletown’s FY 2011 budget would be as apposed to how dire a situation the Township was in this year. The spin attempt was mind-boggling and for anyone that had actually read or saw the proposed budget it was mind-blowing!
Trasente tried hard to spin the numbers in a positive way, he presented slides that tried to explain what the budget wold do, what were the cost drivers behind it and items that would not be in the 2011 budget, but he neglected to add that many of these items were not going to be one shot budget increases like he was inferring. Somethings like the retro active pay increase of $1.4M for the police and the $1.8M payment to fulfill the town’s pension obligations would be ongoing.
The biggest snow-job of the whole presentation was when Trasente presented the slide that introduced the proposed tax increase.
The Middletown tax rate will rise from 35 cent per $100 of assessed value to 39.85 cents, for an increase of 4.85 cents. This increase will mean that the average township home that is assessed at $437K will have their property tax increase by $211 a year. In order to make this increase seem palatable to residents, Trasente stated that the percentage increase in the overall tax bill for 2010 would only be 2.8%. It wasn’t until Committeeman Sean Byrnes questioned Trasente that the true tax numbers came to light.
Byrnes asked for clarification on the 2.8% budget increase and whether or not this increase was reflective of only the municipal tax rate or did it include the County and school taxes as well, at which point Trasente sheepishly admitted that the rate included all three.
Byrnes then went on to state that the true municipal tax increase to residents was closer to 13% and pointed out that there was no reason to believe, despite Trasente’s rosie picture of next years budget, that it would be any better.
Nick Trasente did mention however that as of this point the budget was not finalized, there still could be changes to seeing that the budget will not be officially adopted until mid July giving Committee members plenty of time to solicit ideas from the public and make further cuts like the elimination of Middletown day as an example.
If you want to read a different take on last nights meeting then you can read about it HERE. Kevin Penton of the Asbury Park Press was the first to have an article posted on he subject and while it lacks a few details about what went on, I have to give him kudos for seeing through the attempt at sugarcoating the budget presentation while attempting to present the facts.

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Filed under Asbury Park Press, budget introduction, Middletown Township, municipal tax rates, Nick Trasente, Sean F. Byrnes, tax increase

NJPP Monday Minute 6/21/10: Budget Sacrifices


WHAT IS SACRIFICED?

The Legislature will soon act on the emaciated $28.3 billion FY2011 budget proposal submitted in March by Gov. Christie, who told lawmakers in his budget address that the state’s dire economic situation necessitated deep cuts to every corner of state government and demanded shared sacrifice by all New Jerseyans.

Clearly, the recession is taking a tremendous toll on state and local finances. In New Jersey, where the constitution requires a balanced budget by July 1, the state has lost $6 billion in revenue from income, sales, corporate and other taxes the past two years, according to the nonpartisan Office of Legislative Services. In each of the past three fiscal years, the state budget has declined in its actual dollar amount, from $33.5 billion to $32.9 billion in 2009; to $29.8 billion in 2010; to the proposed $28.3 billion in 2011. Treasury Department records show that a decline in state spending from one year to the next is unprecedented in the modern history of New Jersey, let alone three smaller budgets in succession.

There are “winners” in this budget: corporations and the wealthiest individuals whose tax obligations will be lower this year. Those who stand to lose the most are disproportionately poorer, older and at greater risk of economic catastrophe than the rest of New Jersey. The sacrifice that the governor demanded in his budget address appears to fall almost entirely on middle and working class families, the disabled and seniors.

As part of the Better Choices for New Jersey coalition, NJPP has identified $1.6 billion in additional revenue and savings that would allow the state to avoid the worst of these cuts:

  • Restoring the marginal tax rate increase on those making over $400,000 a year would generate about $1 billion in revenue.
  • Increasing the motor vehicle registration fees on gas guzzlers could bring in $140 million.
  • Retaining the surcharge on corporate business tax liabilities and increasing it to eight percent instead of four percent would provide $160 million in revenue.
  • Closing corporate loopholes and instituting a system of combined reporting for businesses could save New Jersey taxpayers close to $250 million.
Democrats proposed restoring the marginal tax rate increase on those making $1 million or more, to 10.75 percent from 8.97 percent, for one year in order to restore about $600 million in property tax rebates to senior citizens and the disabled, but the governor vetoed the legislation. Democratic leaders are now lobbying to find the handful of Republican votes necessary to override the governor’s veto.

Without any additional revenue or savings, the FY2011 budget will be a blow to middle- and lower-income taxpayers and will devastate the programs that have for so long served as a safety net for the state’s most vulnerable residents. In addition, the reduction of $1.3 billion in state aid to public schools and municipalities means that local governments will have to lay off teachers, police and firefighters – something that affects us all.

Following is a look at some, but not all, of what is being sacrificed in the governor’s proposal.

Pubic Education

A cut of $832 million in state aid to public schools proposed for the FY2011 budget is in addition to nearly $400 million in cuts ordered in the last half of FY2010. The reductions have resulted in widespread layoffs of teachers and staff, as well as inevitable increases in property tax levies, largely because the $1.2 billion in cuts represents 10 percent of the $12.5 billion total statewide property tax collections levy in New Jersey.

But cuts to public schools go deeper, hitting working families who depend on state assistance for after school care and children from low-income families who often rely on meals at school for life sustaining nourishment. Among the proposals:

Eliminating all $3 million in state funding for the school breakfast program and cutting $2.4 million in state funding for the school lunch program. The U.S. Department of Agriculture (USDA) reimbursements will continue, but cutting the state subsidy for meals provided by school districts will likely raise the meal prices charged to kids, reduce the quality of meals served or create a deficit in the food service program. If food services are provided by a private company and the costs of meals are fixed by contract, fewer children will probably be fed.

Eliminating all $10.5 million in state funding for NJ After 3, a successful public/private partnership that works with local non-profit agencies who collectively operate 115 programs – in local Ys, Boys and Girls Clubs, Jewish Family Services, and other organizations – to provide safe, high-quality affordable after school programs in 29 towns for approximately 12,000 students.

Since its inception in 2004, this program has raised approximately $45 million in private financial support. With no state funding, it will fall on these investors to make up the state’s share.

Higher Education

Public colleges and universities would lose $173 million in state aid in FY2011, causing tuition to rise and driving the best and brightest students out of state after high school. The budget continues a downward spiral. State support as a share of college budgets has declined precipitously – from an average across all of the colleges and universities of 48 percent in 1990 to less than 14 percent in the FY2011 budget proposal.

Direct state aid is only part of the story, however. The Office of Legislative Services’ Higher Educational Services report estimates that available resources will be nearly 14 percent less than current year spending for college students and universities. Of the more than 30 detailed changes included in the OLS analysis, only one was an increased appropriation.

That increase was a $1.5 million bump to $20.1 million to continue the state’s obligation to fund the ongoing New Jersey Student Tuition Assistance Reward Scholarship (NJSTARS) until it is phased out with the high school class that graduates in 2011. The program covers tuition and fees at the state’s 19 community colleges for any student who graduates in the top 15 percent of their high school class. The current budget is expected to support 2,100 students in college now, but incoming freshman students to county colleges, who do not already have a scholarship lined up, are out of luck.

The state’s other major financial aid program, Tuition Aid Grants (TAG), would see a cut of $10.9 million in FY 2011. Currently, one in three full-time New Jersey college students receives a TAG grant. The budget estimates that TAG appropriations will support 63,735 students in academic year 2010-2011, 924 more than in 2009-2010. It will support more students, in part, because awards to students at private colleges would be much smaller due to a reduction in the maximum size of these awards.

Transportation

In a state where one in ten commuters uses public transit to get to and from work, the administration cut $300 million in funding to NJTransit. In response, the agency was forced to cut service on some lines and to raise fares by an average of 22 percent – the second highest fare increase in history. A daily roundtrip between New Brunswick and Trenton will increase to $17 from the current fare of $11.75. As a result, NJTransit expects to lose five percent of its ridership, many of whom will choose to drive instead. The increases hit especially hard for low-income families who have no other transportation alternatives.

New Jersey’s failing transportation infrastructure will continue to crumble, too, because the administration is cutting $56.3 million from the Department of Transportation, one of the largest cuts in the agency’s history.

At the same time, Gov. Christie has steadfastly refused to consider a gas tax increase to pay for transit and transportation needs, saying it will harm the economy. Gas prices in New Jersey are low relative to most places in the country, largely because New Jersey has the nation’s third lowest gas tax.

Earned Income Tax Credit

Nearly half a million low-income households face what amounts to a tax increase as a result of Gov. Christie’s plan to reduce by 20 percent the state Earned Income Tax Credit.

The EITC is a federal and state program that helps low-wage working families make ends meet by rewarding work over welfare. State EITCs are calculated as a percent of the federal credit and are deducted from taxes owed. In New Jersey, 485,000 working families with children receive this credit. A parent raising two children and working in a full-time, minimum wage job ($15,000 a year) would see a reduction in the family’s state tax credit by about $300. The total loss to struggling households from this policy recommendation is a staggering $45 million.

The proposal may be penny wise and pound foolish, too, because of the impact of those cuts on the amount of federal funds New Jersey receives to support low-wage workers.

The U.S. House of Representatives has passed legislation that includes the extension of TANF Emergency Contingency funds. If this legislation becomes law, New Jersey could receive up to $120 million in new federal funds in FY 2011. But if the state EITC appropriation is cut in this year’s budget, the state could lose money because the amount the federal government gives the state is based on how much the state has increased funding for benefits to low-income families since 2007.

Federal and matching programs

Outside the $28.3 billion budget proposal, the state likely will have about $12.5 billion available in federal funds for state programs in FY2011. The state has also budgeted for $1 billion in supplementary funds from the American Recovery and Reinvestment Act (about half the amount the state received last year).

Many believe the federal government determines how federal funds are spent. The reality is that the state often has considerable discretion in the amount of federal funds received by the state, as well as how those funds are used. In many case, the state’s proposed cuts to state funding of federal-state programs are magnified two, three or even nine times by the loss of federal funds.

  • More than 40,000 women in New Jersey will lose critical health services and education because state funding for family planning is eliminated in this budget. That $7 million loss is multiplied by the federal government’s 9-to-1 match, leaving low-income women without a dependable source for the basic health care they received through Planned Parenthood. The money is used to provide annual check-ups and other health care for women, but not abortions because federal law prohibits federal funds from being used for abortions.
  • The governor proposes to save $27 million by eliminating the monthly cash assistance of $140 to about 35,000 unemployed individuals, even though the federal government is making $90 million available in new federal funds to reduce the state cost for medical assistance to individuals . Instead of supporting some of the neediest residents of the state, the governor proposes to redirect those funds to balance the budget.
  • A $13.5 million cut to the state Rental Assistance Program means low-income tenants will lose access to vouchers that help them pay for food, rent and clothing.
  • A $39.6 million cut in cash grants through the Work First New Jersey General Assistance Program are likely to increase homelessness and hunger in the state.
  • Eliminating a program that provides orthodontic services to the poorest children in the state will save $4 million but costs the state $8 million because of a 1-to-1 match in federal funding.
  • People with disabilities and seniors will lose care that keeps them out of state institutions because of a proposed cut of $14 million in state funding of the Personal Care Assistance Program. Because the program receives $22 million in federal matching funds, the total reductions amount to $36 million less to pay for personal assistance to seniors and people with developmental disabilities.
  • Spouses of people with disabilities will lose $200 monthly payments that paid for care of their loved ones because the state proposes cutting the SSI caregiver supplement by $6.7 million.
  • A proposed $9.7 million cut to Legal Services of New Jersey means 11,000 New Jerseyans will lose access to legal services that assist with foreclosure, eviction, or situations of domestic violence.

FamilyCare

Perhaps the most stunning example of the administration’s disregard for the value-added in federal funding of social programs is its handling of New Jersey’s successful FamilyCare program- a state-federal program that provides access to health insurance for low-paid working families that don’t have coverage through their jobs and can’t afford the cost of private insurance.

The state proposes to save $24.6 million in state funds by closing enrollment in the program to parents in those families with incomes of more than $23,352 a year (133 percent of the federal poverty level), even though doing so will also cost the state $48 million in federal funds. Some 39,000 parents will be denied coverage. The total loss amounts to more than $70 million. .

The cut comes on the heels of an Executive Order by Gov. Christie that denied FamilyCare coverage to 11,700 legal immigrants who have been in the U.S. less than five years. The proposed budget also ends all state funding for FamilyCare outreach, making it impossible for the state to meet its goal of insuring all children by 2013. It will also result in the further loss of federal funds.

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Filed under better choices, budget sacrifices, Gov. Chris Christie, Monday Minute, New Jersey Policy Perspective

Sewer Authority Slush Fund ??


One of the more interesting line items that I found in the proposed Middletown Municipal budget that will be introduced at tonight’s special budget meeting is the $365K transfer of surplus funds from the Middletown Sewer Authority to the Township.

Under the heading of General Revenues on sheet 10 of the budget, the line item titled Miscellaneous Revenues shows a contribution of Sewer Authority Surplus of $356K to the municipal budget.
So the questions are, if the Sewer Authority has this much money sitting around to give to the Township, are they charging us too much for their services? And, if this $365k is over their surplus allotment what were they planning to do with this money if they did not “give” it to the Township?
Its been a well known fact that the Middletown GOP uses the Sewer Authority as a dumping ground for party loyalist and cronies, each commissioner of the authority is entitled to a yearly stipend, township health benefits and pension credits. Obviously, the Sewerage Authority is like a slush fund where favored professionals get paid, people get jobs, no one watches what’s going on and is a nice way for the majority party to reward those who tow the line.

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Filed under budget deficit, budget surplus, Middletown GOP, Middletown Sewerage Authority, Middletown Township Committee, slush fund

Hold Onto Your Wallets, Middletown To Introduce Budget That Includes a 12.2% Tax Increase


Hold onto your purse strings and wallets ladies and gentleman, I got my hands on the proposed 2010 Middletown Municipal Budget before its introduction and as we have been saying for a long time now, it isn’t pretty!

The budget that will be introduced during the Special Budget Introduction Meeting tonight at 7pm will total nearly $65M and will reflect a spending increase over last years budget of 4.9%, it calls for a 12.2% tax increase that will raise $5.55M to fund it!

As I said it isn’t pretty, I spent a few hours reviewing it after I requested a copy of it from Committeeman Sean Byrnes, who was nice enough to forward it to me in advance of the budget meeting. In the email that accompanied the budget Byrnes wrote:
“…much of this was foreseeable, pension increase $1.8M, payback $800k from 2009, salary increases $1.5M, health care increase $1.6M, these total over $6.0M. No surprise. We knew this in 2009 and yet they refused all my recommendations including fixed fee legal retainer, bidding out engineering work, cutting Middletown matters, cutting Middletown day, contracting out leaf and brush, consolidating maintenance and refusing finance cmte. Even now we should be assuming the governors tool chest will pass and we should be planning accordingly…”

Why the big increase, what are the driving forces behind the budget? In addition to what Sean Byrnes stated, nearly every appropriation line item in the budget saw an increase of some kind even though most revenues streams dried up.
Not surprisingly, after the mayor took such a public stance against the MTEA after April’s defeat of the school budget, taking his lead from Governor Christie and insisting that the teachers accept a wage freeze and contribute to their health benefits, the largest overall increase in the budget after the increase to the health and pension funds were Salaries and Wages paid out to employees who will enjoy an 8.9% increase over last year!
If you doubt what I say, you can print out a copy for yourself >>> Here and see for yourself.
If you plan on attending the budget introduction meeting bring a copy of the budget with you, along with your questions in order to ask the mayor why he and others on the Township Committee have done such a poor job in preparing for and planning this budget. If they would have heeded Sean Byrnes and former Committeeman Patrick Short’s advice over the past year and leading up to the introduction of this budget, the situation we find ourselves in today may not have been so costly to residents.

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Filed under budget deficit, Budget Shortfall, Middletown Township, Patrick Short, Sean F. Byrnes, special budget meeting, tax increase, tax revenues

Saturday Morning Cartoons: Father’s Day Off

Sit up in that easy chair and breakout the Wheaties, its’ toon time again !

Happy Father’s Day !

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Filed under Father's day, Goofy, Saturday morning cartoons, Walt Disney

president Obama’s Weekly Address: 6/19/10 Republicans Blocking Progress

The President calls on Republicans in Congress to put scoring political points aside, and instead to focus on solving the problems facing the nation. At the time of this address, the Republican leadership is blocking progress on a bill to boost the economy, retain jobs for teachers and cops, and help people buy their first home; another bill which would hold oil companies accountable for any disasters they cause by removing the current $75 million liability cap; and 136 highly qualified men and women who have been nominated to government positions.

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Filed under Congress, oil companies, President Obama, Republicans, Teachers, weekly address