Tag: budget

To sell or not to sell

Editorials in the state’s major papers over the last few days are asking that voters and legislators keep an open mind on the governor’s “asset monetization” proposal, asking that critics hold their fire until the governor puts a plan on the table.

The Record, for instance, calls legislators’ attempts to block the plan — essentially a privatization of state assets — premature and “flat-out wrong.”

They have decided they are dead set against the sale or lease of a major highway or other asset before they even know what the Corzine administration will come up with.

Their premature opposition is a disservice to the public. It threatens to kill the proposal for an asset sale before it has even been made.

Of course, that’s the game plan. The idea of selling off the Turnpike is dangerous at the very least, raising the specter of some unregulated business raising tolls and shirking on maintenance, leaving the state’s drivers holding the bag for years.

The Record admits that

there are serious, legitimate concerns about the notion of giving a private company control of any major highway or other state asset. Would tolls rise unreasonably high? Would the highway be properly maintained?

Most important, would an asset sale benefit the state over the long run, or would it bring only temporary relief that would lead the state into a deeper fiscal hole in the future?

These concerns need to be fully debated. But it is impossible to debate a proposal that doesn’t yet exist.

The Asbury Park Press also remains skeptical, but is open to some options,

such as the sale of naming rights and air rights — developing the empty space above state properties — and the use of financial techniques to generate regular income from state assets. None of the alternatives should involve ceding control over the assets, such as the roadways, which would hurt commuters most with nonstop toll increases.

And it wants voters to have the final say — which only seems reasonable, given what may end up being proposed.

Let’s be fair here. “Asset monetization” is a dangerous gamble, as I said. Handing off public assets, even if safeguards are built into the contract, means handing off control. You can’t have it both ways.

I wouldn’t take the proposal off the table, necessarily, but before anyone can take this discussion seriously, the governor has to show the state that there are no other options. The governor says that voters will not stand for an income tax hike. My answer is: Let’s ask them. He says they won’t stand for service cuts: Explain the potential cuts and then ask them whether they can live with them.

If, in the end, “asset monetarization” is the only way to stave off financial ruin, then we can talk about it.

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

E-mail me by clicking here.

Email me at grassroots at comcast dot net.

A boost in aid

Aid figures are out and it appears that the governor is keeping his word to suburban schools. South Brunswick is looking at a 5 percent increase ($20.16 million from $19.2 million), Monroe ($4.33 million from $4.2 million) and Cranbury 3 percent ($727,735 from $706,539) and Jamesburg a whopping 8.3 percent ($3.96 million from $3.66 million) — not huge increases by any stretch, but more than any hike in a long time.

While the aid increases should help offset the need for some property taxes, they remain far below what is necessary to help growing districts like Monroe and South Brunswick keep up with the particular intersection of enrollment hikes and inflation with which they must live.

Consider, however, that South Brunswick will be looking at a budget of something in the neighborhood of $125 million, meaning that state aid makes up just 15 percent of the total. The percentage in Cranbury is about 6 percent.

For the state to address the property tax problem, it will need to address this funding flaw. I don’t know what the correct number is, but if the state paid about half the cost of education in a district like South Brunswick, it would cut between 50 and 60 cents off a $2-plus tax rate. The same kind of percentage cuts would be felt across the state.

That said, the state would need to come up with the money for the aid — either by raising taxes or through some other creative, but sustainable way of raising revenue.

I don’t know if this is the correct approach, but it a drastic approach, a wholesale revision of the way we do business as opposed to the nibbling at the edges envisioned by the four joint committees.

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

E-mail me by clicking here.

Email me at grassroots at comcast dot net.

The mirage of reform

The Star-Ledger today offers a summary of the state’s tax reform effort that presents the last half year in a somewhat better light than I would.

Of the 98 recommendations made by four special joint committees, the paper says that about half were enacted as law. And while that maybe true from a technical standpoint, the most important were not and many of the other controversial items were either watered down in committee or between the release of the reports and the passage of the legislation.

Take the consolidation bill. The one that became law essentially created an advisory panel with authority to study the issue, but left the final decision to voters in the communities to be merged. Normally, I would never oppose giving voters a choice, but the history of municipal and school consolidation is one of failure and inaction, caused only partly by fiscal considerations. Other tangential issues — red herrings like the amorphous “identity,” as if villages like Kingston that are not independent municipalities lack identity — have come into play keeping the expensive array of overlapping and repetitive governments in place.

The bill originally on the table would have addressed that by giving the state Legislature and governor final say — the merger panel would recommend towns to consolidate and the state would act. That would have been infinitely better.

Go down the list: The ban on dual-office holding? Still waiting. New school aid formula? Wait until next year. State comptroller? Sort of — a far weaker comptroller was created than proposed.

The Legislature did manage to create a new, executive county superintendent — a silly idea that creates a new level of bureaucracy — and impose a set of tax levy caps destined to do little more than hamstring local governments and schools. Our best hope for the caps is that they create momentum for greater shared services and mergers — if you can’t spend, after all, you have to find other ways of providing services.

How would I grade the governor and Legislature at this point? I’d give them an incomplete — and make no mistake, this grade applies equally to Democrats and Republicans.

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

E-mail me by clicking here.

Email me at grassroots at comcast dot net.