Tag Archives: Governor Chris Christie

New Jersey judge rules her pension benefits can’t be cut

From John Bury’s pension blog:

Judge Linda Feinberg, sitting in Trenton, ruled the increased health benefits and pension contributions that Governor Chris Christie and Democratic legislative leaders put into effect on June 28, are unconstitutional as it applies to judges, in particular Judge Paul DePascale, because it amounts to a reduction in their salaries.  The ruling does not affect state and local public employees, including teachers, police and firefighters, who are now paying the increased costs.

As Mr. Bury notes, why can other employees have their benefits reduced, but not judges?

 

Christie’s Property Tax Cap Evolves

A key component of Governor Chris Christie’s spending and tax reduction plan is his proposal to place a hard cap of 2.5% on property tax increases, based on Massachusetts’ Prop 2 and 1/2. A compromise was reached with the Legislature this weekend to create a 2% cap with several exceptions for pensions, health care, and debt.

The Asbury Park Press covers how the cap evolved this weekend.

My reservations over the property tax cap boil down to a basic theoretical observation. Capping one source of revenue only shifts the bill. The problem in New Jersey does not lie with the property tax, per se, but in the evolution of an intergovernmental aid system, and state spending mandates that have eroded Home Rule.

Local budget watchers will want to keep an eye on how local governments choose to navigate the cap this year. Pension costs and health care are set to consume the state’s budget in the coming decade. Cap or no cap, as the Governor knows,  New Jersey has plenty left to cut.

State Subsidy Reliance

Like many state services across the country, the Phoenix area’s new light rail system is facing cuts because of budget shortfalls. Like many transit systems, the light rail is funded by a combination of fares and subsidies that come from the local, state, and federal governments.

This payment arrangement makes transit systems vulnerable to volatility in government budgets as well as business cycle fluctuations. An Arizona Republic article explains:

The money shift reflects how much of Maricopa County’s voter-adopted plan to expand transit service in the next 15 years has fallen victim to the economy. That includes some extensions of light-rail lines.

“We’ve pretty much gutted all of our future capital projects that aren’t federally funded in order to keep service intact,” said Paul Hodgins, a planner at the Regional Public Transportation Authority, which manages bus service in much of the Valley.

When new Metro Chief Executive Officer Steve Banta begins his first day on the job in two weeks, one of his first actions will be to review cuts with his new board.

Metro covers about a quarter of its costs from fares, and depends on sales-tax revenue from Phoenix and Tempe and general-fund money from Mesa. With tax revenue down, cuts look inevitable.

In New Jersey, a state that, like Arizona, has a very large budget deficit, legislators are facing similar challenges.  Governor Chris Christie is leading an effort to privatize state services to save taxpayer money and increase efficiency.

While privatization can be a solution to curbing government costs and improving service to constituents, the process must be undertaken transparently.  The New Jersey Star Ledger warns that previous projects were fraught with corruption:

A privatization effort under former governor Christie Whitman that turned auto inspections over to Parsons Corp. in the 1990s was called a “mammoth boondoggle” by investigators. Parsons was criticized for hiring an array of politically connected subcontractors.

Assorted Links

Asbury Park Press reports, Monmouth County, NJ pays 336 public employees $100 K a year.

Governor Chris Christie is “stuck with 7 percent pay increase” for public sector workers.

Federal agency to investigate Los Angeles schools.

California’s College Dreamers: UC tuition tax hikes spark protests.

Deathbed bonds: Investors team up to buy bonds from the terminally-ill.

Bold Signs in New Jersey

In the past week, New Jersey’s newly-elected Governor Chris Christie  made two strong choices. The first was to propose cutting back on “Extraordinary Aid” and “Special Aid”  to municipalities. These programs haven’t helped end fiscal distress in municipalities, but have more likely subsidized ongoing mismanagement. The Governor was overruled by the legislature which today voted to approve $121 million in aid to Camden, Paterson, Jersey City, Union City, and Bridgeton. Governor Christie may still rescind the aid when he proposes the budget in March.

Another bold policy sign is the Governor’s nomination of former Jersey City Mayor Bret Schundler to be education commissioner.

Here he recounts his role at the forefront of the charter school movement in New Jersey.  PolitickerNJ.com calls it a “gutsy pick.” Mr. Schundler says he’s open to working with the New Jersey Educational Association. Whether he gets the job will is yet to be determined. State Senator Nicholas Sacco plans to “wait and see” what Mr. Schundler’s vision is for education before making a judgement.