Tag: budget

South Brunswick budget:Gambling with the surplus

You have ato wonder if the people who drafted South Brunswick’s proposed municipal budget have been paying attention to what has been happening at the state level.

The $49.5 million budget presented to the Township Council on Tuesday by Township Manager Matt Watkins follows in what has been a long line of South Brunswick spending plans, relying on its surplus account to offset what otherwise might be a tax increase.

The township is planning to use 95 percent of its surplus account as revenue, more than $9 million, which is about three-quarters of a million bucks more than it used last year. The problem, however, is that doing so leaves less than $500,000 in its surplus account with no guarantees that the account will grow enough over the course of the year to allow the township to use the same amount of surplus as revenue next year.

That could leave the township in a hole next year, before anything else is taken into account.

Recent history is our guide: The township’s surplus account shrink from $8.2 million in 2001 to $4.5 million in 2006, before a minibuilding boom helped drive it back up to $10.5 million last year. The council spent $8.5 million of that last year, with development helping generate enough new revenue to boost the fund to about $9.7 million.

That means that $7.7 million in new surplus was generated during 2007 — about $2.5 million less than was generated in 2006. If the township creates the same amount of new surplus in 2008 as it did in 2007, that will leave it with about $8.3 million or so in its account — almost a million bucks less than it is using this year. That’s a huge gap that would be difficult to plug.

Township officials are optimistic that surplus growth will be enough to avert such a gap, but external factors leave me dubious. The national economy is tanking, led by a sinking real estate market, and New Jersey’s economic woes have become legendary. The economic climate would not seem to favor new ratable construction — in fact, the ratable base has staganated (it actually shrank by a quarter of a percent in 2007).

Unless there are major projects in the pipeline that are likely to get their certificates of occupancy in 2008 and that will generate tax revenue, it seems a dangerous gamble to burn the surplus account like this.

Then again, keeping taxes from going up during an election year is not the worst policy — so what if the fallout won’t hit the budget (and taxpayers) until 2009.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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New Jersey’s budget:the pain of a thousand cuts


I didn’t have a lot of time yesterday to blog on Gov. Corzine’s proposed state budget — I was mired in it so that I could draft a column on fiscal reform for tomorrow’s paper.

But now that the Post is nearly put to bed, I can offer some thoughts:

This is a painful budget that should have surprised no one. The governor has been warning that a day of reckoning was coming and he deserves credit for putting out such a painful plan and being willing to take the heat.

After 13 town hall meetings at which he heard little more than anger, he said he understood the “public’s frustration and anger generated by too many years of overspending, borrowing, and false rhetoric.”

The budget he unveiled yesterday, he said, was designed to address this.

The time is long past for the State, its Governor, and its Legislature to end imprudent spending and borrowing that exceeds our means. This budget does just that.

He went on to say that

the public understands the State has a fiscal crisis — but they want us to understand they have one of their own.

It is with this perspective that I present a sobering budget for fiscal 2009 …a budget, I believe, that represents a “turning point” in the fiscal management of our State — a turning point away from the patterns of overspending and tortured borrowing.

A turning point toward spending restraint and spending cuts that genuinely address our financial emergency.

That said, this budget still labors under the weight of years of unfunded commitments, court mandates, bad decisions, and declining federal dollars.

So he stood before the state Legislature and told its members — and the public — that things would have to change. He proposed rather deep cuts — in aid to towns, hospitals, the arts and colleges, in the workforce — that will be felt in a variety of ways around the state.

The Record is right when it says that there is a lot in this budget to anger just about every constituency in the state. The paper also is right — unlike The Asbury Park Press, which called for deeper cuts and ignored that the governor has actually made payments to the pension system over the last two years that had not been made in years — that the budget shows Corzine is “serious and sincere” and that the budget should serve as the opening salvo of negotiations.

Expect the various interests who have benefited over the years from state money to raise their voices (remember Gov. Jim McGreevey’s first budget?). Some of them will have good arguments as to why their funding should be restored. In some cases, those arguments should be heeded — but only if a corresponding budget cut can be found.

Budget growth has to be reined in, but that will not be enough. The state needs to find new revenues to offset its costs and find a way to pay down its debt. The governor’s toll-hike plan was badly flawed, but at least it was an honest attempt and its goal was noble.

That said, we should have started this process much earlier by dropping the charade that is the rebates, hiking the gas tax and income tax to raise revenue, eliminating waste and cracking down on corruption and so on down the list. One of the reasons this did not happen is that the governor was afraid to push the Legislature during the 2007 election year, meaning that the modest steps made toward reform in 2006 (and they were modest) were stopped cold once the calendar changed.

This has been the general problem with Corzine. He has been too willing to let the Legislature dictate the agenda and has been too conscious of the political fallout that might follow (another example is his lukewarm commitment to same-sex marriage). This might be viewed as a positive trait by some, but I am one of those people who are tired of politicians governing in that way.

I am hopeful that this horribly tight budget is evidence that the governor plans to take a tougher stand this year on fiscal matters, that he intends to push the Legislature to change the way it does business. I am hopeful, but not optimistic — this is New Jersey, after all.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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Email me at grassroots at comcast dot net.

Tough cuts and the chief wingnut

This budget proposal comes from a man who wants to be the face of New Jersey conservatism? The Corzine budget proposal is going to be painful enough without putting in place the kind of draconian cuts that Steve Lonegan is pushing. I’m thinking it is time that the state’s media stop taking this guy seriously.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

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Email me at grassroots at comcast dot net.

Lack of votes taking their tollon proposed toll hikes

Sometimes, when you write a column on a weekly deadline, the world moves and you’re left talking about things that have changed.

That appears to be what’s happened with the governor’s toll-hike plan, which he now is acknowledging is nearly death.

“I’m not conceding that it’s dead. On the other hand, I’m a realist. I don’t have 21 and 41 votes for this,” Corzine said, referring to the minimum votes he needs to push his proposal through the state Senate and Assembly.

The governor now says he is willing to listen to alternatives — he’s been saying that all along, but now actually seems serious about doing so.

Corzine said yesterday he will review a proposal by Assembly Transportation Committee Chairman John Wisniewski, the first detailed alternative to his plan.

“We’ll have to see what it actually accomplishes,” Corzine said. “But it’s a healthy addition to the dialogue. I’m searching for a solution that actually addresses the failed financial position of the state.”

The plan announced Wednesday by Wisniewski (D-Middlesex) would phase in an 18-cent increase in gas taxes over three years and consider privatizing the state Lottery. Under this scenario, tolls would rise by less than half of what the governor has proposed.

There are other options that, if considered, could be part of a more varied approach — income taxes, for instance. In any case, the toll plan as currently conceived seems on life support.

The other question that this raises is whether the governor will remove the toll plan from his budget calculations and how this might affect his planning.

Corzine had previously pledged to hold spending flat, a move that alone requires more than $2 billion in spending cuts.

“We can only spend the revenues we have, and details of the plan will come on Tuesday,” said Corzine spokeswoman Lilo Stainton.

Corzine said he still hopes to halve the state’s $32 billion debt. But his comments Thursday focused more often on investing in state infrastructure, the second of the two prime goals in his toll plan.

“We may not get everything I want with regards to these issues, but if we get a long way down that path, I think we will have made real change, a real contribution to both the present and the future of this state,” Corzine said.

It’s not a solution, but at least the issue of the state’s fractured finances is on the table. That’s more than we’ve gotten from anyone else in recent years.

South Brunswick Post, The Cranbury Press
The Blog of South Brunswick

E-mail me by clicking here.

Email me at grassroots at comcast dot net.