Category Archives: NJ State Legislature

Board of Education Elections Move From April To November This Year

In case you missed it, the NJ Legislature recently passed legislation (Bill A4394) that allows school board elections to be moved to the general election in November. The new law also stipulates that the school budget does not need to be approved by the public if the budget increase is within the 2% cap. However, referendums and supplemental budget items would still require public approval.

At its 1/18/12 meeting, the Middletown Board of Education unanimously approved a resolution to move its election, normally held in April, to November. The Board terms that would have expired this April are automatically extended until November. Five spots on the Board are up for election at that time, Joan Minnuies, Michael Donlon and Leonora Caminiti are up for re-election while new members Sue Griffin and James Cody, who filled unexpired terms of resigning board members, will be listed on the November ballot.

For the record, I’m not against moving the Board of Education elections to November per say. I think the more people that come out to vote, for or against, the candidates and school budget the better. Citizen participation is a good thing.

What I worry about however is that these elections will become much more politicized than they are now, which will take away from and could be confused with, real issues that effect local governments and school systems.

Board of Education candidates will align themselves with the political parties and will feel pressure to tow the party line and adhere to the wishes of state and local party bosses, over the best interests of those in the school systems.

To run an effective municipal campaign for Township Committee, campaigns could spend in excess of $100,000 to win an election. In contrast most school board candidates spend less than $7,000.

A town’s Board of Education will essentially be up for sale each year to the special interests that donate the most to the candidates up for election , it could get messy.

Last weeks edition of the Independent has an article about the Middletown Board of Education’s decision to switch it’s election from April to November.

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Filed under Bill A4394, Middletown Board of Education, NJ State Legislature, School Board elections, school budgets

>George Norcross tales dubbed "bogeyman" bunk are rooted in reality

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Good video for your watching from the Star Ledger’s Brian Donohue, it leaves you scratching your head afterwards:

Ledger Live for June 25, 2011 –

Ledger Live with Brian Donohue. On todayapos;s show, Brian Donohue examines how the battle over the pension and benefits reform bill passed by the New Jersey legislature raised questions about the influence of South Jersey Democratic leader George Norcross. Assertions by Norcross ally Sen. Steve Sweeney that Norcross plays little role in the legislative process contrast sharply with Norcrossapos; own words, as captured in 2001 recordings made as part of a state attorney generalapos;s office investigation.

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Filed under Brian Donohue, Democratic Leader, George Norcross, health benefits and pension reform, NJ State Legislature, political machine, South Jersey, Stephen Sweeney, the Star-Ledger

>NJPP Monday Minute 1/24/11: Job creation or corporate welfare?

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Large corporations and small businesses will receive more than $800 million in tax breaks if the governor signs a number of bills passed by the Legislature earlier this month as part of its “Back to Work NJ” package. Much of the rhetoric associated with these bills is about creating jobs. Some of the legislation–specifically, one bill that allows unemployed people to receive training while they collect unemployment insurance–might have that effect. Many of the others, however, seem to benefit businesses rather than the unemployed.

Lawmakers might have a stronger case if they had followed their own law. New Jersey passed the Development Subsidy Job Goals Accountability Act in 2007, a bill meant to document the effect of tax breaks for businesses on job growth. The report is supposed to include the number of jobs created; whether they are full- or part-time; the salaries and benefits paid; and the number of current and new workers with health insurance. Unfortunately, the act has never been implemented.

Whether these tax cuts will lead to new investments in the state remains an unanswered question. There is no question, however, that in a time of scarce resources, the state stands to lose an estimated $568 million annually from the following six key business tax break bills alone.

Net Operating Losses (S1540/A3143)


One of the most costly of the bills allows businesses that pay their corporate tax liabilities as part of their personal gross income tax to combine certain losses and write them off against their income for up to 20 years. The Division of Taxation estimates the state will lose between $375 million and $400 million annually if this bill becomes law.

Under current law, gains from rents, royalties, patents, copyrights, partnerships and S corporation income are considered separate categories of business income and are deductible only against losses in the same category. For example, a business partnership that loses money in a given year can now only write off its losses against that partnership and not against any rents, royalties, patents, etc. it might have. This bill would allow the business partnership losses to be written off against profits of the other businesses. The impact of this is to allow businesses to write off much more of their bad business decisions for up to 20 years–well beyond the likely life of many of the businesses.

Single Sales Factor (S1646/A1676)


Changing the way states tax multi-state corporations has been on big business lobbyists’ wish list for a long time in New Jersey. Currently, New Jersey calculates corporate business taxes for multistate corporations based on three factors – sales, property and personnel. This bill eliminates the property and personnel factors from the calculation, leaving only sales. Multi-state corporations with significant property and personnel in New Jersey will benefit most from this; corporations that operate entirely within the state will be unaffected. The bill also establishes a special formula for airlines subject to New Jersey taxes.

The Office of Management and Budget estimates this bill will cost the state $39.2 million in corporate taxes in FY 2012; $78.4 million in FY 2013; and $98 million in FY 2014 and in future years, as it is phased in over three years. But OMB says the estimate is subject to significant fluctuations because a very few large taxpayers may account for significant revenues. When New Jersey switched to its current formula in 1978, the Division of Taxation estimated that 81 percent of tax benefits went to 200 multi-state corporations.

Closing Fund (S2545/A3353)


If the Closing Fund bill is enacted, New Jersey will have up to $50 million for grants to encourage companies to stay, expand or move to the state. The fund is aimed at companies that have received subsidies already but say they need more in order to close the deal with the state. The law would be administered by the New Jersey Economic Development Authority and the State Treasurer, who will be able to waive all grant criteria if they determine the project would significantly benefit the state’s economy. No job requirements are included in the bill. To receive a grant from this fund, a company would not need to hire a specific number of people, pay them a certain amount, provide them with health insurance or even hire them as regular employees instead of as consultants.

Garden State Film & Digital Media Jobs Act (S690/A2905)(S2545/A3353)


Despite the fact that Gov. Christie suspended New Jersey’s film subsidy program in July 2010 because he said the state couldn’t afford it and the fact that many other states are limiting their film and digital media credits, the Legislature has passed a bill that significantly increases New Jersey’s film and digital media tax credit. The bill will increase the credit from $10 million to $50 million for filmmakers and from $5 million to $10 million for digital media producers. The Office of Legislative Services estimates that this bill would cost the state $45 million a year. As long as at least 60 percent of total production costs occur in New Jersey, filmmakers and producers would continue to be entitled to a credit of up to 20 percent of their production costs (and 22 percent if those transactions take place in an Urban Enterprise Zone) on their state corporate business or gross income taxes.

According to a recent study by the Center on Budget and Policy Priorities, the cost of film credits generally far outweigh their benefits. The study found that most of the in-state jobs created from film-related work are part-time, temporary positions. New Jersey has commissioned its own study on the effectiveness of its film tax credit, but the report has not been released.

Historic Property Reinvestment Act (S659/1951)


The Historic Property Reinvestment Act establishes tax credits for the rehabilitation of historic properties – both private homes and business properties. Homeowners can receive a 10-year credit of up to 25 percent ($25,000) of the rehabilitation cost applied against their income tax liability. The business owners’ credit is not capped and can be taken against their corporate business tax and insurance premiums tax liabilities. At least 40 percent of the rehabilitation must be done on the structure’s exterior. If the tax credit is greater than the income tax liability, the bill allows excess credit to be carried forward for four years and unused credits to be sold.

A December 30, 2010 article in the Wall Street Journal profiled the conversion of the 10 buildings on the 15-acre Jersey City Medical Center campus, which would be eligible for tax credits of up to $87 million under this bill. The conversion of the Medical Center into luxury apartments and 45,000 square feet of amenities, including a pool and fitness center, is an example of what should not be subsidized. Such projects do little more than increase developers’ profits at the expense of public services.

The executive branch estimates the credit would cost the state $15 million in FY 2012; $25 million in FY 2013; $40 million in FY 2014; and $50 million in FY 2015. The Office of Legislative Services estimates no revenue loss in FY 2012 and a loss of $22.2 million in FY 2013; $29.9 million in FY 2014; and $37.6 million in FY 2015.

Business Retention and Relocation Assistance Grant Program (BRRAG) Expansion (S2370/A3389)


On January 6, the Legislature passed and Gov. Christie signed an expansion of the BRRAG program that provides tax credits to businesses based on the number of their employees in New Jersey. The expansion increases the amount a business can be paid for each employee working in New Jersey and sets up a complicated five-tier system that increases the subsidy amounts and duration depending on the size of the company. The credits now are accessible to any industry the state Economic Development Authority determines is desirable to maintain in the state. Before this expansion, BRRAG targeted the biotechnology, pharmaceuticals, high-technology, financial services, manufacturing, logistics and transportation industries.

The Office of Management and Budget estimates the expansion will result in a state revenue loss of up to $18.6 million annually, beginning this year.

The six bills included here contain many unknowns. It is possible they will create new jobs; it is equally possible they won’t. What is fact, however, is that all of them will result in a revenue loss to the state at a time when the state needs every cent it can collect. When times are tough, fiscal discipline should apply to everyone, not just those with a voice in the state capitol.

Note: Estimated total cost of all six bills is between $542.8 – $567.8M

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Filed under Bills and Laws, corporate tax breaks, Job creation, Monday Minute, New Jersey Policy Perspective, NJ State Legislature, unemployment insurance