Category Archives: blog

As A Matter Of Fact…Reality Check: Income Taxes Don’t Impede Economic Growth

by Jon Whiten | Published in NJPP Blog: As a Matter of Fact …

As Gov. Chris Christie prepares to unveil the specifics of his proposed 10-percent income tax cut at next week’s budget address, he’s working under a key tenet of conservative economics: that high tax rates harm economic growth.

There’s just one problem, according to a new national report by the Institute on Taxation and Economic Policy (ITEP): that tenet doesn’t match up with reality.

These claims are based largely on misleading analyses generated by Arthur Laffer, long-time spokesman of a supply-side economic theory that President George H. W. Bush once called “voodoo economics” because of its bizarre insistence that tax cuts very often lead to higher revenues. Recently, Laffer’s consulting firm has been very successful (with the help of the American Legislative Exchange Council, Americans for Prosperity, and the Wall Street Journal’s editorial page) in spreading the talking point that the nine states without personal income taxes have economies that far outperform those in the nine states with the highest top tax rates.

In reality, however, residents of “high rate” income tax states are actually experiencing economic conditions at least as good, if not better, than those living in states lacking a personal income tax.

The report pits the nine “high rate” states identified by Laffer (a list that includes New Jersey) against the nine states that don’t have a broad-based personal income tax in three categories: growth per capita, median family income and unemployment rate.

From 2001 to 2010, the “high rate” states have seen stronger growth per capita and less erosion of median family income, while the average unemployment rate has been the same as the un-taxed states.

The bottom line, according to ITEP?

“There is no reason for states to expect that reducing or repealing their income taxes will improve the performance of their economies.”

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Filed under As a Matter of Fact, blog, Gov. Chris Christie, income taxes, Institute on Taxation and Economic Policy (ITEP), New Jersey Policy Perspective

As A Matter Of Fact…Business Leaders Agree: Raising the Minimum Wage Makes Sense

by Jon Whiten
Published in NJPP Blog: As a Matter of Fact …

While legislative leaders’ efforts to raise New Jersey’s minimum wage to $8.50 an hour have taken a backseat in recent weeks to the governor’s proposed income tax cut, similar legislation in New York is gaining the backing of some high-profile business advocates.

First up was a Daily News op-ed co-authored by New York City’s billionaire mayor Michael Bloomberg that used free-market ideology to argue for bolstering the minimum wage.

“[The minimum wage] helps taxpayers by reducing the number of people who might otherwise have to rely on public assistance to survive,” Bloomberg and state Assembly Speaker Sheldon Silver wrote. “Taxpayers benefit when government dependency is low – and so does the economy.”

The Daily News piece was followed a few days later by an editorial in business bible Crain’s that called for the minimum wage to be raised to $8.50 an hour and tied to inflation going forward. Crain’s said opponents’ arguments that a wage increase will destroy low-paid jobs just aren’t true; it pointed to New York’s 2004 raising of the wage as an example.

“If the change had a cataclysmic effect on businesses that depend heavily on minimum-wage workers, we certainly missed it,” the paper wrote. “Neither, quite obviously, did it shower undeserved riches on the bottom rung of workers.”

If and when the minimum wage bill here in New Jersey starts to pick up steam again, we can only hope some of the state’s leading voices for business will, like Bloomberg and Crain’s, avoid a knee-jerk dismissal of the proposal, and look instead at how it will help our entire economy to flourish.

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Filed under As a Matter of Fact, blog, Michael Bloomberg, minimum wage, New Jersey, New Jersey Policy Perspective, NY Daily News, taxpayers

As A Matter Of Fact ….What Do Taxes Pay For? A Better Quality of Life for Our Children

January 25th, 2012, by Jon Whiten Published in NJPP Blog: As a Matter of Fact …


While it’s a well-worn cliché that “nobody likes to pay taxes,” one question isn’t asked often enough: what do those taxes pay for?

According to a new national study, they pay for a higher quality of life for our children.

Investing in Public Programs Matters: How State Policies Impact Children’s Lives, released last week by the Foundation for Child Development (FCD), finds “a strong relationship” between state tax rates and the overall quality of life for children.

The report’s key findings are that “higher state taxes are better for children,” and that “greater investments in government programs are strongly related to better quality-of-life for children in a state.”

The report, along with the annual KIDS COUNT data book that ranks New Jersey fifth — comes as states around the country, including New Jersey, are reacting to fiscal crises with austere, cuts-only spending plan, and it shows the folly of such an approach.

“Although states are currently revenue-starved, this is exactly the wrong time to reduce taxes,” says FCD president Rudy Takanishi. “The revenues generated by taxes should be used to invest more in the education and health of our children. Policymakers must recognize that the cost of shortchanging children today is too high a price to pay in the future.”

There’s good news here for New Jersey: the Garden State ranked first in the nation on the Child Well-Being Index, barely edging out Massachusetts. This finding, based on 2007 data, reaffirms the need to resist further cuts to education and other crucial public programs.

The stakes — our children’s well-being, and our state’s future prosperity – couldn’t be higher.

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Filed under As a Matter of Fact, blog, Child Well-Being Index, education cuts, Foundation for Child Development (FCD), Kids Count, New Jersey Policy Perspective, quality of life, tax cuts, Taxes

Quote Of The Day #2: “You can say it’s political…”

Our second quote of the day comes from newly reappointed Middletown Mayor Tony Fiore, from statements made to reporter Kevin Penton in todays Asbury Park Press concerning the appointments of members to (or lack thereof) the Middletown Human Rights Commission and its former Chairperson Carolyn Scwhebel.

“You can say it’s political, you can say it’s personal choice,” Fiore said. “She doesn’t work well with the town.”

Mrs. Scwhebel recently sent a letter to the editor, Middletown Human Rights Commission Being Abolished by Attrition, to local publication (this blog included) that expressed her concerns at not being reappointed to the commission.

And when you consider what went on during the last Township Committee meeting of 2011 back on Dec.19th, Fiore’s comments only reinforce what I wrote about in the post Political Affiliations Over Participation Matter More When It Comes To Board Appointments, when discussing an appointment to the Middletown Library Board (listen to the audio).

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Filed under Asbury Park Press, blog, Board of Trustees, Carolyn Schwebel, kevin penton, Middletown Human Rights Commission, Middletown Library, Quote of the day, Tony Fiore

Vote On Delaware River Basin Fracking Ban Postponed

Readers of this blog know my stance on the hydraulic fracturing(fracking) shale in order to release natural gas deposits that were unattainable before the process was developed, I have posted about its potential harm to our enviroment and drinking water supplies numerous times in the past which you can read HereHere and Here .

Until it can be proven beyond a reasonable doubt that the process is not harmful to the environment or to our drinking water supplies the practice of fracking should be haulted. Fresh clean, drinkable water is becoming scarce and harder to find, thus it is becoming a precious commodity that shouldn’t be messed with.

So the vote yesterday morning to postponing the upcoming Monday mornings vote to approve the process in and along the Delaware River Basin (a key fresh water source for residents of New Jersey, Pennsylvania, New York and Delaware) is welcomed news.

Accoding to the Star-Ledger environmental groups are pleased with this postponment:

Environmentalists greeted the vote postponement as a major victory, and for grassroots activism. Maya van Rossum, the Delaware Riverkeeper, said the anti-fracking contingent would still be demonstrating in Trenton on Monday morning as previously planned, despite the cancellation.

“There’s still going to be a showing — to send a message, largely,” she said.

“As long as there is a delay, we can continue working toward getting a permanent ban on fracking in the Delaware basin,” added Jeff Tittel, executive director of the Sierra Club’s New Jersey chapter. “We need to keep the pressure up on Governor Christie and the Obama administration to stop these weak rules from moving forward.”

You can read the more about the postponement …. Here

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Filed under blog, Delaware River Basin Commission, Delaware Riverkeeper, Fracking, hydrofracking, Jeff Tittle, Sierra club

As A Matter Of Fact…New Jersey Offers Goya $80 Million to Create Nine New Jobs




October 24th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Imagine you are a New Jersey job seeker (one of 418,000 unemployed in the state as of September, 2011, according to the state Department of Labor and Workforce Development) and you read in the news that a firm will be getting a state subsidy to hire 175 new workers. You would be thrilled to see those new job opportunities in the state, right?

But, in the case of Goya Foods, Inc., only nine truly new jobs are being created.

Nine.

Of the other 166 “new” workers, 66 would be moved from Goya’s location in Bethpage, New York and 100 already work for Goya as contractors based in Secaucus, according to documents from the state Economic Development Authority (EDA). So these “new” workers are actually existing employees.

Those 100 current contractors may be counted as new workers because they will be converted to direct payroll employees or become part of a professional employer organization (PEO). The National Association of Professional Employer Organizations describes PEOs as enabling “clients to cost-effectively outsource the management of human resources, employment benefits, payroll and workers’ compensation.” Counting current workers as new workers might be technically correct under the subsidy law — but it just doesn’t make sense.

The state’s tax subsidy for these nine new workers is being offered under the newly revised Urban Transit Hub Tax Credit (UTHTC) statute. It is intended to provide an incentive to a firm by lowering its state corporate business tax obligation so that a company will make capital investments in buildings in urban areas near transit and create jobs.

Earlier this month, the EDA approved the $80 million-plus UTHTC for Goya Foods. The company would get that tax credit for building a new 600,000 square foot headquarters/distribution center in Jersey City, a half-mile from the Jersey City PATH station. Aside from the 175 “new” workers, 316 current Goya workers would move to the new facility from Secaucus. Goya’s current headquarters in Secaucus would be converted to a manufacturing facility and 53 jobs would be moved there from elsewhere in Secaucus, but would not be part of the $80 million subsidy.

Further, Goya is to benefit from the expansion of one of the state’s Urban Enterprise Zones to include the part of Jersey City where Goya plans to relocate, according to the Jersey Journal. Urban Enterprise Zones offer companies a host of tax benefits. The company is also seeking a 20-year property tax abatement for its new headquarters/distribution facility in Jersey City, which would lower the firm’s property tax bills; the Jersey City Council will vote to introduce the measure this week, with final approval to possibly come in the second week of November.

But that all may not be enough to keep Goya in New Jersey, according to EDA documents.

New Jersey is competing with New York state, because Goya is also considering moving North Jersey workers to an 892,943 square foot site in Suffern, New York, in Rockland County. No public information was provided by the EDA about the subsidies that may have been offered by the state of New York to woo Goya.

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Filed under As a Matter of Fact, blog, Economic Development Authority, Goya Foods, Jersey City NJ, New Jersey Department of Labor and Workforce Development, New Jersey Policy Perspective, tax abatements

As A Matter Of Fact…The importance of Social Security


September 22nd, 2011 | Published in NJPP Blog: As a Matter of Fact

By Mary Forsberg

Social Security is an American mainstay, as much a part of our culture as baseball, hot dogs and apple pie. Established in 1935, it now provides benefits to over 50 million people, about one in every six U. S. citizens. While three-quarters of those receiving benefits are retirees or elderly widow(er)s, 19 percent receive disability insurance payments and 4 percent receive benefits as minor children of parents who have died.

Social Security provides a guaranteed, progressive benefit that keeps with increases in the cost of living. By dollars paid, the U. S. Social Security program is said to be the largest government program in the world. It provides a foundation of retirement protection for nearly every American and its benefits are not means-tested. The near universal participation and the absence of means-testing make Social Security much less expensive (its administrative costs amount to just 0.9 percent of annual benefits) to administer than private retirement annuities.

Debate in Washington about how to reduce the growing federal deficit often turns to reducing social security eligibility and /or benefits. A recent report from Social Security Works and the Strengthen Social Security campaign supports the importance of Social Security to families, communities and state and local economies.

Did you know in New Jersey:

• Social Security provides benefits to more than 1.4 million people.
• Residents receive Social Security benefits totaling nearly $20 million a year
• The median benefit received by a retired worker is about $15,500 a year.
• Social Security is the most important source of income for the 171,400 children living in “grandfamilies,” households headed by a grandparent or other relative.
• Social Security provides valuable disability and life insurance protection for most workers. Nationwide, an estimated 3 of 10 working-aged men and 1 of 4 working-aged women will become severely disabled before reaching retirement age.
• A 30-year-old-worker who earns about $30,000 a year and has a spouse and two young children, receives Social Security insurance protection equal to private disability and life insurance policies worth $465,000 and $476,000 respectively.

Social security has been one of the most important public programs for working family in America since the great depression and clearly provides a measure of security for the elderly, the orphaned and the disabled.

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Filed under As a Matter of Fact, blog, New Jersey Policy Perspective, Social Security

As A Matter Of Fact…Budget vetoes: The scorpion and the frog

July 6th, 2011 | Published in NJPP Blog: As a Matter of Fact …

By Mary E. Forsberg, Research Director

A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, “How do I know you won’t sting me?” The scorpion says, “Because if I do, I will die too.”

The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp “Why?”

Replies the scorpion: “It’s my nature…”

This parable has many variations: the scorpion and turtle; the snake and dog; the viper and farmer. What each variation has in common is a bad actor, a character who can’t play fair, even if it means he might perish.

Those who are reading the press these days may recognize certain similarities with the current state of politics in New Jersey. And the Democratic leadership surely is croaking now.

It wasn’t a surprise that the governor wielded his ax against the Millionaires’ tax and women’s health programs. He did it before. He said he would do it again and he did it.

What was surprising, though, were the other cuts that had nothing to do with policy and everything to do with the very nature of his leadership. The cuts are unprecedented and go beyond any reasonable policy and fiscal considerations.

The Legislature

The budgets of the Executive office, the Legislature and the Judiciary have always been sacrosanct; a “gentleman’s agreement” has traditionally given each responsibility for its own budget and spending.

No governor before has chopped 41 percent from the Legislature’s staff salary accounts, but that’s exactly what the governor did. And he did it with a dose of venom, saying:

“The budget as adopted by the Legislature relied upon exaggerated revenue estimates, flawed assumptions concerning fund balances and ignored the harsh reality of its spending decisions. This reduction, among many others enumerated herein necessitated reductions of known surpluses, imprudent spending and other excesses.”

People who have noticed this salary cut haven’t made much of it. But the fact is, it has the potential to shift the balance of power in the legislative branch. Here’s how that works.

The salary accounts that the governor cut will not affect the salaries of legislators or those of their district office staff. The ones cut supported the Democratic and Republican legislative committee aides and the people who run the partisan staff offices in Trenton. Money for those salaries is appropriated to the Senate and Assembly in a lump sum and is divided based on which party is in the majority – the majority party (currently the Democrats) gets more of the money, has a bigger staff and has the larger suite of offices.

Unless the Legislature overrides this veto with a 2/3 vote (which would require the support of both parties), the staff of those offices will be significantly reduced. How these cuts are shared will be up to the majority Democrats in the Senate and Assembly. And as Assembly Speaker Oliver, a Democrat, was quoted as saying, “I’m certainly not going to shoot myself in the foot.”

Whether the governor understands this or not, a greatly reduced Republican partisan staff in Trenton is certainly a possible outcome of this line item veto.

Higher Education

Students and institutions of higher education felt the sting of the governor’s veto, which cut full-time and part-time Tuition Aid Grants (TAG) below even his own budget recommendation in March. He reduced the Democrats’ appropriation by $48.5 million, even though the amount in the Democrat’s budget was only $21.3 million more than his budget recommended.

In another unusual veto, the governor reduced the number of state-funded positions at each college by nearly 1,200 positions overall. This veto is an easy one to overlook and understanding it isn’t straightforward. What it means, however, is that the governor is reducing the state’s obligation to pay fringe benefits costs for these positions and is transferring those costs to the colleges – all without prior consultation and at the last minute. It is a backhanded way of again reducing the state’s responsibility for its higher education system. For Rutgers University and the Agricultural Experiment Station, this represents a 6 percent loss; for the other colleges, a 5 percent loss.

The veto message was again venomous. He blames the Legislature for this cost shift, saying:

“The Legislature’s failure to appropriately fund health benefit costs for all state employees necessitated a reduction in the state’s support of employee fringe benefits at all public institutions of higher education.”

Legal Services to the Poor

If you are poor in New Jersey and have a legal problem, save it until next year – maybe. Like the TAG scholarship, legal services will be significantly less than even what the governor proposed in his March budget.

His veto eliminated all state funding ($600,000) for the legal clinics at Seton Hall University Law School, Rutgers Newark Law School and Rutgers Camden Law School. In March he budgeted each of them for $200,000 apiece.

He also apparently took umbrage at the additional $5 million included by the Democrats in their budget for Legal Services of New Jersey, which provides legal services to poor people in civil matters. He cut that budget by $10 million – leaving Legal Services of New Jersey with a smaller budget than he recommended in March.

Cleaning up New Jersey

The Governor’s veto cut $18.8 million or 16 percent of the amount he recommended in March for Department of Environmental Protection programs that safeguard and preserve the state’s environment – for remediation of hazardous waste, underground storage tanks, monitoring water, and dealing with diesel pollution. Funding for these programs comes from a 4 percent constitutional dedication of corporate business tax (CBT) revenues. The effort by the governor and some in the Legislature to ensure that New Jersey is “open for business” by doing away with regulations and reducing corporate taxes means less money is available to protect New Jersey’s environment.

The moral of the budget

No one expected the governor to move away from his ideological position on funding health care for women or to abdicate his protection of the wealthiest in the state from the Millionaire’s tax, which would have added an additional 1.78 percent to their income tax bills this year.

But the veto message this year went beyond negotiation and fair play. There are consequences to every action. The scorpion’s sting meant death to both the scorpion and the frog. The consequences of this veto message are a less prosperous state and an increase in the chasm that separates the state’s wealthy from everyone else.

For a complete list of the governor’s line item vetoes, see the chart


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Filed under As a Matter of Fact, blog, Democrats, Gov. Chris Christie, line item veto, Millionaire'sTax, New Jersey Policy Perspective, NJ State Budget, veto override, women's health issues, working poor

>A Comment Worthy Enough For Front Page Posting

>I received the following blog comment from reader Judy Repic, who was responding to my March 11th post Doesn’t Anyone Remember Christine Whitman? . I thought that it was a worthwhile comment that should be shared with everyone, so I’ve posted it below:

My question in all of this pension discussion is did either Florio or Whitman take just the portion that the state provided,or did they include the payments made by employees also? Governor Christie was a member of Morris County freeholders when this happened. His comment about “getting in the delorean and going back in time” is pretty cavalier when he was an elected official at the time.

Also, why should any man or woman who have to wear a protective vest have to conceed to giving up anything? Every day active members of PFRS kiss their spouse and family members good by, and that family member has to wonder for 8 hours if they will be welcoming them home or planning a funeral. These State Employees should never have to conceed to anything.

But,hisotically, politicians know how to push the buttons of the general public by accusing state workers of being overpaid for underperformance. The politicians can rile up the hard working general public into a frenzy by saying their world would be better if “x” changes are made. Attacking state workers pay is normally the “x” they use. However, the civil service test is open to everyone, it does not discrimate on any level, so in reality, every citizen in the state of New Jersey has the potential to become a state employee based on a test score.

How about the Governor, Assembly, and Senate start cutting some of their aids, secretaries, close down redundant posititions in Trenton. How about they post the pay of career Trenton employees with that of Police,Fire, Rescue and Corrections Officers who when 911 is dialed show up to aid you.

I am sick of all state employees being considered as lazy and over paid.

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Filed under blog, Gov. Christie Whitman, Middletown Mike, New Jersey, public unions, reader comments, state employees, worker benefits

>Tony Fiore Respondes to Latest Robo-Call

>Over on his “new” blog provided by Middletown-Patch, Middletown’s acting mayor Tony Fiore, has addressed the latest robo-call that was sent out by the group Concerned Citizens Of Middletown, that talked about the amount of debt the Township is carrying. If you ask me, Fiore’s response just lends credence to the message that went out last Friday.

His answer is the same stock answer that has been given many times before but only this time he providers a true debt number of $72million that so many before him have been reluctant to confirm!


And how is it that Mr. Fiore is so sure who is responsible for these robo-calls when so many (myself included) do not? He blames the Middletown Democrats for placing them, which if that was the case, I think I would know about it. It seems to me that these robo-calls have struck a nerve and seem to be factual based by his response to them.

Also I believe, the point of how much debt the town can borrow itself into, is a silly one; who cares what a towns’ or persons’ credit card limit is when it is already difficult to meet the minimum payments on the balance!

Middletown hasn’t had it debt rating updated in several years, It has been shown recently that credit rating agencies like Moody’s and Standard & Poor aren’t worth much. After the financial meltdown of the past few years, many of the investments that caused the near collapse of the economy were rated A, AA, or AAA from both of these institutions. Knowing that why would anyone want to tout how special they are? They’re not.

On the final point about the blocking of a return phone number, I don’t know what Fiore is talking about, unless he wants to incite others into believing that these messages have no integrity, which I’m sure is his intent, he is living up to him nick-name of the “Fibber”. Every call that I have received by Concerned Citizens of Middletown, including Friday’s, had a return number left on my caller-id.
True it wasn’t a Middletown phone number or one from the immediate area (I think it was Dunellen), but there was in fact a phone number associated with the call.
On a side note – I don’t know how Fiore’s blog on Middletown-Patch works, but this posting was dated Tuesday May 24 at 12:58 PM, right in the middle of a busy work day. Doesn’t Tony have a job that he needs to attend to at 1pm in the afternoon? True, he may have been on his lunch hour but I think not. Working on Township business (which this clearly is), on company time is a No-No as everyone knows.
I wonder what his employer would think????

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Filed under blog, bonding debt, Concerned Citizens of Middletown, debt service, Middletown NJ, Middletown Patch, Moody's, Robo-calls, Standard and Poors, Tony Fiore