>WASHINGTON – Speaking to the American people from Carnegie Mellon University in Pittsburgh, Pennsylvania, President Obama discussed the vital role advanced manufacturing will have in strengthening our economy and creating good, middle-class jobs. The President believes that realizing our nation’s potential requires more than simply cutting spending; we have to foster development at home, so that the United States will continue to grow and attract the world’s best talent, ideas and job-creating technologies. This week, the President announced the Advanced Manufacturing Partnership, which will link the federal government with our nation’s finest minds to insure that our best ideas quickly become our best technologies. By providing American innovators with the resources they need to make their ideas a reality, our nation’s strong legacy of manufacturing, development and middle-class opportunity will continue to grow.
Category Archives: budget deficit
>NJ.com yesterday had an interesting editorial that I think a lot of people should be reading.
In the face of an $11 billion dollar budget defect, NY Gov. Andrew Cuomo balanced NY’s budget by cutting spending and entitlement without raising taxes just as our governor did last year (although that is somewhat debatable). Cuomo achieved this by reaching out to legislator and including them in the process. Gov. Christie on the other hand, has created divisiveness between the governor’s office and those in the legislature with his take it or leave it approach and sledgehammer style.
Interestingly Cuomo was able to balance his State’s budget without demonizing any one group (public employees) or had to hold nonstop “Town Hall” meetings to convince people that there is a problem and his way of solving it, is the only way that it can be done.
Gov. Andrew Cuomo just won agreement on a budget for New York state that cuts overall spending and contains no new taxes. He even blocked an attempt by fellow Democrats to extend a surtax on millionaires.
If this sounds familiar, it’s because New Jersey did all that last year. Perhaps Cuomo looked across the Hudson and liked what he saw.
Now maybe Gov. Chris Christie can return the compliment. Because Cuomo has something to teach him as well.
Note the lack of personal attacks in Albany. Cuomo was tough, but he wasn’t abusive. He didn’t call his Assembly speaker a liar, for example, or clear his schedule for a nonstop tour on the unlimited greed of teachers and cops.
And he negotiated. Especially relevant to New Jersey was Cuomo’s approach to Medicaid.
Like most states, New York and New Jersey are facing daunting increases in health care costs. Cuomo’s approach was collaborative.
He invited key stakeholders, including hospitals and unions, to sit together and hammer out an agreement on cuts. If they couldn’t come up with an answer, he said, then he would do it for them.
After two months, Cuomo’s committee pulled it off, agreeing to 79 cost-cutting measures, from lowering reimbursements to shifting patients to managed care plans.
Christie wants to cut $540 million in Medicaid spending next year, a huge sum that both sides expect to be a main point of contention. But he’s drawn up his plan in secret, and even now is keeping the Legislature out of the loop. People such as Sen. Joseph Vitale (D-Middlesex), a key architect of the current system, are still looking for basic answers.
“They are crafting their own proposal in a vacuum,” Vitale says. “They would be wise to include legislators.”
Cuomo’s collaboration ensured that his plan had broad political support, and would pass. Christie’s approach risks just the opposite.
>In The Face Of Tax Increases And Layoffs Middletown’s Mayor Fiore Justifies $20K In Bonuses to Tax Assessors
What should have been reported as news by these three is the fact that in the face of a tax increase, employee layoffs and other potential service cuts, Tax Assessor Charles Heck and his assistant will be receiving bonuses worth $20,000 ($15K for Heck, $5K for his assistant).
It’s a great read and analogy of what transpired in the early 1990’s when young Republican Governors were swept into office and faced huge budget deficits after Bill Clinton became President and what is happening today.
“A young Democrat is elected President on a theme of hope and change, does some of the things he was elected to do, Republicans howl and win control of Congress in a landslide mid-term election, and the media becomes infatuated with a new crop of Republican governors who are trying to dramatically reconfigure state budgets.
“That’s a reasonable summary of the current state of affairs, but it also describes the first few years of Bill Clinton’s presidency. But it isn’t the similarity that’s striking: After all, there’s a reason the phrase “history has a way of repeating itself” exists. Or, perhaps more appropriately: “Those who fail to learn from history are doomed to repeat it.” See, what’s really striking about the current situation is how few reporters seem to remember what happened in the 1990s.
Most notably, the past few weeks have seen massive media attention paid to state budget deficits, and attempts by Republican governors like Chris Christie to blame out-of-control pension obligations for those deficits (even as they pursue deficit-increasing tax cuts…”
Foser goes on to talk about how NJ Governor Christie Whitman cut taxes and raided the state pension fund in order to close New Jersey’s budget gap even though many critics warned that the State Pension system would see significant shortfall 15-20 years down the road, which of course is what is happening to be now!
“Whitman was one of those star Republican governors of the early 1990s. Like so many other Republican governors who win media attention for innovative approaches, she made her name through the not-so-innovative strategy of cutting taxes. Since she had to offset those tax cuts in order to balance New Jersey’s budget, she reduced payments into the state’s pension system. And that, as the New York Times noted last August, “contributed to the growth of the unfunded liability” that is now widely blamed for New Jersey’s budget shortfall.”
“The first thing Christine Todd Whitman did upon taking office as governor of New Jersey in January was to cut the state’s income tax. Then in July, as she signed into law her first state budget, the Republican cut taxes again while simultaneously closing the huge deficit left by her predecessor.
This is what her supporters call the Whitman miracle, the fiscal accomplishment that has sent her stock soaring among New Jersey’s voters and transformed her on the national scene from a political unknown into one of the Republican Party’s newest stars.
…But the key to the Whitman miracle lies neither in her political philosophy nor in her spending cuts, but rather in the fine print of her budget. Contained there is a series of arcane fiscal changes that some experts say amount to this: Christine Todd Whitman has balanced New Jersey’s books and paid for her tax cut by quietly diverting more than $1 billion from the state’s pension fund.
Whitman calls what she did a “reform” of the pension system that puts it on a more “sound actuarial footing.” Others are less charitable. The one thing that even the actuarial consultants hired by the Whitman administration agree on, however, is that the chief effect of the changes will be to shift billions of dollars in pension obligations onto New Jersey taxpayers 15 to 20 years from now.”“At best, this represents a gamble that the state’s economy in the early part of the next century will be stronger than it is today and better able to shoulder pension responsibilities. At worst, according to fiscal experts, Whitman’s move represents politics at its most cynical.
In recent years financially strapped governments around the country — including Washington, D.C., and New York state — have raided their pension funds for cash, gambling that when the bills come due their local economies will be in a better position to pay them.
“The New Jersey pension system was highly rated in terms of its fiscal integrity,” said [Henry] Raimondo of the Eagleton Institute. “Now that’s compromised. She has effectively slowed down” the amount of “money going into the system, and in around 2010 the liability to New Jersey taxpayers is going to grow dramatically.”
“Let’s review: A Republican governor of New Jersey reduced payments to the state pension system so she could cut taxes. Critics warned doing so would cause significant budget shortfalls in 2010. 2010 rolled around, and — surprise! — so did budget shortfalls. And now those shortfalls are used by New Jersey’s current Republican governor (along with many in the media) to justify cutting pensions (while again cutting taxes.)
Basically, conservatives have staged an end-run around having a public debate over cutting pensions in order to pay for tax cuts. Rather than making the argument that tax cuts are more important than pensions, they just went ahead and cut taxes, raiding the pension system in the process, then waited 15 years for predictable — and predicted — deficits, which they now point to as evidence that the pension system is unsustainably generous. And they’ve done it with the help of countless news organizations that fall for this shell game.”
>Instead of the over inflated request of $1.2 million that the Middletown Township Committee wants to steal from the Middletown Library, local officials have now made a new and improved request to the library for only $500,000 of its reserved funds according to an article online this morning over at the Asbury Park Press.
The other quote that sticks out is from Township Administrator Tony Mercantante, “Both sides could sue each other, and we’d end up in court for three years, but no one wants that.”
This to me seems like an ill disguised vile threat if you ask me, especially if you add it to other inflammatory remarks already made by those who represent the township that threatened to change the composition of the Library’s Board of Trustees by not reappointing current trustees and by adding more trustees that would be more sympathetic to the Township’s wishes, along with handing the Middletown Library over to the County to run.
The article also reiterates what I have been reminding people of since the February 16th Library Board meeting, which is that this request will not save the jobs of the 26 employees already scheduled to be laid off:
Township officials have said they need the money to avoid laying off more than the 26 positions that are already part of a plan it submitted to the state Civil Service Commission last month. Included in the layoff plan are 10 township police department and 13 parks and recreation department positions.
>N.J. municipalities scramble to notify voters on property tax referendum; I wonder if Middletown has plans to hedge it’s bet
>According to the Star-Ledger, today is the last day that municipalities around the State have to notifiy their votes of the potential to hold a property tax referendum that would enable a municipality to exceed Governor Christie’s 2% cap on budgets.
I posted Saturday about how Middletown’s Administrator Tony Mercantante and others have stated that they had no intention to exceed the 2% cap and that there would be no referendum needed, especially since Mercantante had no idea how a referendum would work. He stated at the February 16th Library Board meeting that the State Legislature(code word for Democrats) in its bill, provided no guidance or allocated any type of funds to municipalities for the purpose of such an event. So Middletown wasn’t going to even consider such a possibility.
Instead of planning for the possiblility of a referendum, Middletown’s Mayor Tony Fiore, and others that control the town planned to follow Governor Christie’s lead and stay with in a 2% budget increase.
That sounds great in theory but wouldn’t be a good idea to hedge your bets and announce a referendum just in case they can’t stay with in the cap?
Is the Township Committee really prepared to lay off 10 or more police officers and the whole department of Parks & Recreation if they can not get union consessions during contract talks or if they Library Board refuses to hand over any more reserved funds then they are legally responsible to do, which at this point is in the neighborhood of $250,000?
I guess these questions will be answered at tonight’s Township workshop meeting.
TRENTON — New Jersey enters a new era today as voters get to find out if they may be asked next month to raise their property taxes beyond the Christie administration’s new 2 percent limit.
Under the law signed by Gov. Chris Christie last summer, residents will decide if their town or school budget can exceed the 2 percent cap through a referendum on April 27, the same day as school board elections.
Towns and schools were scrambling last week to meet today’s deadline to publish a newspaper ad notifying voters a referendum may be held. As of Sunday, five towns — Plumsted, Mount Holly, Riverdale, North Arlington and Chesilhurst — had placed ads and at least five more towns and two schools planned to, according to groups representing towns and schools….Read more >>> Here
>It’s been almost week now since the last Middletown Township Committee meeting took place and the controversy over reserved library funds have not died down, if anything as the calendar gets closer to March 15th and the Middletown Township Committee needs to produce a proposed budget to the State, the rhetoric could heat up even more than it already has.
As I stated in an earlier post, during public comments at last weeks Township Committee meeting, Library Director Susan O’Neal, spoke about the virtues of the library and attempted to talk about the perceived surplus funds that the Township insists are available for it’s taking, but when she was badgered and talked down to rather arrogantly by appointed mayor Tony Fiore, she ended the discussion and sat down.
Fiore was waving in the air a piece of paper that he claimed was a 2008 MTPL Foundation IRS 990 form that showed the Library held in excess of $350,000 (but he didn’t present it to O’Neal), he wanted to know how much was currently in this account. O’Neal stated that she thought there was $35,000 available as per the 2010 IRS 990 form. Fiore then wanted to know what happened to the surplus funds, what were they used for?
Ms. O’Neal said that NO portion of municipal funds are included in the Library’s surplus, at which point Township Attorney Brain Nelson, attempting to interject himself into the conversation, rose from his chair next to the Mayor waved his finger at O’Neal and said that her statement was false.
It was at this point that Director O’Neal ended her discussion, probably feeling somewhat frustrated and intimidated by the aggression shown to her by both Tony Fiore and his “goon” Attorney Brian Nelson.
The below 10 minute audio clip is from Tuesday night’s meeting and captures Susan O’Neal’s entire 10 minute address in front of Township Committee. To hear the exchange between Tony Fiore, Susan O’Neal and Nelson as described above, you will need to advance the audio to about the 7:50 mark.
It doesn’t shed a very good light on Fiore or Nelson,it just adds to the perspective that Township Committee and it’s attorney are arrogant and don’t care to hear about the truth or worry about how they chose to intimidate others when they have their minds made up.
>Middletown Library Director Susan O’Neal, earlier today posted the following update on the issue of Library Reserve funds on the main page of the Middletown Township Library’s website:
The Library “giveback” issue is now so full of rumors that it is difficult to know where to begin. One of the troubling issues is that some are casting the library as uncooperative. Not true.
So, I’ll start with last year, when members of the Township Committee, Pam Brightbill and Sean Byrnes came to library board meetings and asked the Trustees to consider giving some of its reserves to the town. The Trustees listened, and made a quick response to sponsor one of the summer concerts of the Parks & Recreation Department. We followed up with a letter to the Mayor [dated June 10,2010] indicating the Board’s willingness to provide some assistance, and asked four questions which were germane to the Board’s deliberations. There was no response to the letter [which we will post on this website] These questions were not answered by August, when Mayor Scharfenberger attended the library board meeting, and he was asked again for a response. None followed, and the library pressed on in memos and finally, in November, a meeting was held with Library Trustees, Mr. Mercantante and Mr. Trascente. But questions of the Board were not completely answered. In fact, the inability of the library to get any reconciliation of the small budget surplus of 2008 and 2009 kept our 2010 budget in flux for the entire year. And, without the information it asked for, the Trustees could not make an informed decision about making a contribution to help the Township.
So now we get to late 2010, and the law on libraries returning some surpluses changes from libraries “may” return surpluses to “must” return surpluses that are not restricted for capital projects, or are from per capita state aid funds. Immediately, the request turned into a demand, and for much much more than the law would allow. By the library’s calculations of the official “Proposed Transfer Form” of monies, the Middletown Library has $262,453 in funds which must be returned.
The Trustees of the Library are negotiating in good faith with the Township on this matter and will do what they are able to do legally.
Susan O’Neal, Director
p.s. By the way, the NJ State Library has informed us that ALL of the dozen or so libraries that have given back funds to their municipalities have followed the procedures outlined in the law. The MTPL will do the same.
>With the controversy surrounding the Middletown Township Committee and it’s attempted extortion to grab hold of perceived surplus funds from the Middletown Library, tonight’s meeting of the Township Committee should be a good one. A house full of library supporters are expected to back the court room tonight to further voice their concerns over the money grab by the Township Committee.
>by guest blogger Sean F. Byrnes, former Middletown Township Committeeman
Last week we saw the Township of Middletown enveloped in a dispute over the Township’s effort to convince the Board of Trustees for the Library to turn over a significant share of its surplus to the Township Committee for budget relief purposes. Unfortunately, the manner in which the township chose to solicit these funds lacked tact. Although the township had previously made less threatening overtures to the Library in an effort to win the Board of Trustees’ support for a funds transfer, when that effort failed, the Township pursued an aggressive campaign to convince the public that a transfer would be in their best interest. Spearheaded by new Committeeman Kevin Settembrino, this effort, whether intended or not, seemed rooted in tactics of intimidation and threats to de-municipalize the library and combine it with the County Library system. This effort also suggested that a failure of the Board of Trustees to abide by the wishes of the Township Committee would result in the loss of ten police officers, the layoff of a significant number of Township employees and, if you heard the comments at the Library Board of Trustees’ meeting, an effort by Township Committee members to replace existing Board of Trustees members.
Based on the comments from Board of Trustees’ members at their meeting on Tuesday, it would appear that the resolve of the Board of Trustees has not wilted in the face of these threats. Led by Randy Gabrielan, the Chairman of the Board, the Library challenged the assumptions, numbers and legal authority for the Township’s demand for a funds transfer. Looking ahead, as a Township resident, I would hope that both sides could retreat from the current level of heated rhetoric and restart their discussions.
I think it would be in the interest of all taxpayers for the Township Committee and Library to continue their discussions. It might make more sense to have the Township Administrator meet with the Director of the Library to discuss how the Library might be able to assist the township in this time of budget crisis. From the Library’s perspective, the Board has worked hard to build a reserve that could be used for future capital projects, and there is an understandable reluctance to use these funds to satisfy operating expenses for the Township. From the Township’s perspective, the Library has a protected stream of revenue that is not subject to the same stresses and demands that the Township must face when health care costs increase, pensions become more expensive and the cost of doing business generally continues to go up. There may be opportunities for these two parties to cooperate in other ways that would provide relief to the Township without exhausting the reserves of the library.
There is no question that the Township finds itself in a perfect storm of budgetary constraints. To be fair, some of these strains are beyond its control. But the Township moved at a glacial pace over the last several years as this financial crisis approached. A quicker response to the approaching financial storm would have made the Library ask a smaller one. Accordingly, before the Library turns over any of its reserves to the Township, it would be nice to see an acknowledgment that a swifter response from the township in 2009 and 2010 would have avoided the seriousness of the budget crisis that the Township currently faces. The Township did lay off approximately 16 employees last year, but did so only mid-year. Other municipalities took action much sooner and in more dramatic fashion. The former Mayor’s claims of 40 layoffs include retirements.
Other cost-saving measures were proposed over the last several years, but were rejected as too extreme. Unfortunately, as a result of the Township’s failure to act, the Township Committee must now contemplate cuts that go far beyond those that were previously considered “extreme.” Until the Township forms a subcommittee whose function is to focus on budget recommendations, track existing and anticipated debt, look for opportunities for consolidation and sharing of services and generally manage the Township’s finances on a more regular basis, the Township will always be reacting to rather than planning for increased demands for Township resources.
Once again, in fairness, the unfortunate timing of the Township’s reevaluation in 2009, just prior to a steep decrease in property values, set the Township up for a tax appeal nightmare in 2010 and 2011. (Of course, the township had mistakenly put off its reevaluation for approximately 14 years – had the township completed the reval when it should have, the steep drop in real estate prices would not have resulted in such a large number of tax appeals.) But regardless of the failure to conduct a timely revaluation, the Township has a legitimate reason to gripe, because when a resident or commercial property owner prevails on their tax appeal, the township must return to the taxpayer not only the municipal share of the taxes received from the taxpayer, but must also reimburse the taxpayer for the funds received by the School District during the year for which the tax appeal was filed. This reality is difficulty for some to believe, but true. And, in light of the fact that approximately two-thirds of the tax dollars go to school district activities, the Township ends up paying back the taxpayer for School District funds that the Township never received in its budget.
Consequently, the steady decrease in real estate value over the last couple of years has produced a field day for those filing tax appeals. The Township is now struggling to repay multi-year tax appeals that are probably worth nearly $4 million. Unfortunately, the Legislature has failed to assist municipalities facing this dilemma. Under the circumstances, given the unique circumstances facing municipalities, including picking up the tab for the Legislature’s bungling of pension contributions for public workers, the Legislature should provide assistance to townships by creating opportunities for public entities to finance the tax appeals or extend their repayment terms. In several years, the Township will be through this unique period where tax appeal refunds are substantial and hopefully return to a more predictable budget cycle. The Township Committee took the first step in this direction in 2010 when it decided to conduct a reassessment. Even thought the reassessment cost $400,000 the savings achieved in 2011 from reduced tax appeal filings will be far greater.
The realities of the tax appeals as set forth above increase the pressure for some agreement with the Library. At the same time, the Library will see its share of funding decrease by more than 10 percent next year, due to the fact that its revenue stream is dependent solely upon property values. With a 1.3 billion drop in the total assessed real estate in the Township of Middletown, the Library’s stream of revenue will be reduced considerably. Given this dynamic, it may make sense for the Township and Library to discuss mutual relief. In other words, the Township needs money now most desperately. The Library in the out years may need assistance as its funding stream declines. Perhaps assistance from the Library during the current year could be received in exchange for promises by the Township to return the favor several years down the road.
It might also make sense for the Library to consider some sort of partnership with the Arts Center. While the Arts Center has its own Board of Directors, this arrangement, as far as I know, is not routed in any legislative scheme. Indeed, the Township has effectively turned over the operation of the Arts Center to a non-profit corporation and the Board supervises these activities. Resident Jim Grenafege was the first person to suggest that the Library Board of Trustees might consider assimilating some of the Arts Center’s operations into its activities. A casual review of the websites for these two entities suggests that there is some degree of overlap between the artistic and cultural offerings from these two bodies. Given that they both have buildings that are relatively new and both are focused on improving the education of the citizens of this Township when it comes to arts, literature and music, there may be some opportunity for the Library to assist in the operation of the Arts Center, including some of its expenses. It is exciting to contemplate what the far larger Library work force might be able to provide to the Arts Center when it comes to running the day to day events and offerings at the Arts Center.
At the end of the day, the current legislation when it comes to Library transfer to municipalities, amended in October of 2010, will likely allow some transfer to take place. From the Township’s perspective, the amount of money to be transferred under the current legislative scheme will fall short of what the Township needs to avoid drastic reductions in personnel and services. However, somewhere within the circumstances discussed above, creative minds on both sides should be able to work out an arrangement that provides some additional relief for the Township, even if it may not be a direct transfer of funds of the magnitude the Township seeks. My hope would be that the time and energy on both sides be spent working toward that goal, rather than on blaming the other.