State – Page 14 – Hank Kalet

The budget dance continues

The Assembly Budget Committee has released the newly revised state budget — a spending plan negotiated between the leadership of the two houses of the state Legislature and the governor — but the state Senate panel is not ready to move.

So the dance continues.

It remains likely that a budget will be approved before the July 1 deadline, averting a reprise of the 2006 state government shutdown, but not without some serious battles occurring.

The budget is a mixed bag. While some of the aid to New Jersey hospitals has been restored, money for Muhlenberg in Union County has not and the medical center could still close.

Tax rebates have been cut for higher-income New Jerseyans, as well, and there remains no agreement on how to finance aid for school construction.

So the dance continues.

The dance, of course, and the difficulty of crafting a spending plan that is fair to everyone in the state demonstrates how badly off the tracks the state’s fiscal reform effort has gone. After the 2006 state shutdown, the governor ordered a special joint session of the Legislature that was supposed to craft a plan to alter the way government works and rebuild state finances that were teetering on a cracked and disintegrating fiscal foundation.

Some of the early proposals were amazingly far-reaching — a base-closing-style commission that would look at municipal consolidation and shared services and recommend mergers to the Legislature and governor, who would then have final say; a state comptroller with extensive powers to investigate state and local finances; changes in school financing and administration — but in the end most were either watered down or abandoned.

Other proposals — the governor’s highly questionable plan to leverage Turnpike and Parkway tolls to pay down the state debt — also ran ashore.

So we stand in the same spot as we did two years ago, the poisonous and partisan culture in Trenton making it impossible for the vast majority of the 120 members of the state Legislature to see beyond their own narrow constituencies and the status quo and make the kind of changes that truly could be called reform.

We remain wedded to the outmoded property tax system, convinced that rebates are the only way to lighten the tax burden on homeowners. We refuse to consider an expansion of the state income and corporate taxes or significant revenue sharing as a way to reduce the burden on property taxpayers (raise more from income taxes to pay for education, a state responsibility under the state constitution).

We remain stuck with 566 municipalities in a state of 8 million people, stuck with 611 school districts and another 200 or so taxing districts (county governments, fire districts, etc.) that do little more than create administrative redundancies while doing everything they can to protect their own little fiefdoms.

I’m not arguing that bigger is better — just look at the mess that the cities of Trenton and Newark have become over the years — and it can be legitimately argued that some small towns have the resources and land mass to manage on their own (Cranbury comes to mind).

But towns like Jamesburg, Helmetta and Spotswood, many in Bergen County and along the Jersey Shore, and dozens of others (the two Princetons, the Hopewells and Pennington come to mind) should be looked at seriously to see if merging them either with each other or with another neighbor (Jamesburg into Monroe, for instance, or Hightstown into East Windsor) might result in tax savings, better or expanded services or both. There are 70 municipal governments in Bergen County — an absurd number given the physical size of the county and its population.

We continue to allow legislators to skirt constitutional rules designed to limit their ability to borrow money, which were designed to ensure that borrowing was used only for legitimate longterm expenses (infrastructure improvements, for instance) and not to balance the books.

And we continue to put off our pension and health care obligations waiting for that time bomb to explode.

By we I mean not just the state Legislature and governor but municipal and county officials, school administrators, taxpayers, voters — everyone seeking to protect their own small piece of turf at the expense of the larger public good.

I could continue, but why bother. No one seems to be listening anyway.

Fixer-upper on affordable housing

Legislation that would change the way the state approaches providing affordable housing — for the bettere — is moving through the state Legislature.

A state Senate panel yesterday cleared a bill that would eliminate regional contribution agreements and create a statewide housing fund in an effort to get about 115,000 units built.

The bill accomplishes several things:

It eliminates RCAs, which allow rich towns to buy their way out of providing housing by paying poorer communities to build a portion of their state-mandated obligation. Both Cranbury and Monroe have used RCAs in the past.
It offsets the money that urban communities would lose by creating a statewide housing fund — funded by a 2.5 percent fee on the value of new commercial development — that would help pay for affordable units.
It sets aside about $20 million for what are being called “work-force units,” essentially expanding the program to higher incomes.
It requires that land preservation be taken into account when setting a municipality’s obligation — something that could help limit the size of Cranbury’s future obligations.

Reform is obviously needed and this legislation is a good first step that, hopefully, will lead to new affordable housing being built. But it is only a first step.

It is obvious that the current affordable housing program does not work. It does not provide enough housing, while encouraging sprawl — a combination that does little more than anger suburban voters and officials and diminish support.

The current rules require towns that have new jobs created to build housing — a seemingly logical approach, but one that has shipwrecked on the shoals of questionable calculations. In theory, if a town like Cranbury or South Brunswick create new jobs, the town should provide housing. Assuming that East Windsor or North Brunswick or some other community will provide housing for the workers creates a tax imbalance — South Brunswick would get the revenue but the neighboring community would pay the cost of educating the new students or providing other services.

But that’s not practical. Jobs and housing are regional concerns and should be viewed that way on a policy level, though that will require a change in the way we raise and spend money — altering the tax structure (moving away from property taxes to an income tax) and/or instituting significant revenue sharing so that towns that build warehousing share some of the taxes they generate with towns that provide housing.

Green v. Green

The Assembly Housing and Local Government Committee has approved legislation that would extend the permits of stalled building projects for up to six years, a bill at odds with environmental stewardship.

Called the Permit Extension Act, the proposal would extend for six years all permits and approvals given to developers by the state and local governments — even those that have expired. It would enable projects permitted in past years but stalled for financial reasons to avoid having to comply with subsequent changes in environmental law, public health standards, building codes or local zoning.

Supporters — which include builders and labor — are calling this necessary to protect builders during the downturn, with one of its sponsors, Assemblyman Louis Greenwald, D-Camden, having described it in May as “part of an economic stimulus package.”

“We want to be more competitive with neighboring states like Massachusetts and Pennsylvania, where business is going to. This is no different than other permit extensions in the past when we faced similar recessions. It is designed to help stimulate the economy and vital to the financial recovery from the doldrums we are currently in.”

Assemblyman Joe Cryan, D-Union, said earlier today,

“The expiration of permits can have a devastating impact on our building and construction industries and the thousands of jobs they support,” said Cryan (D-Union). “Without this relief, it could cost business tens of millions of dollars for re-permitting. Allowing already approved projects to go ahead once the economy turns around will send a strong message to businesses that we want them to stay in New Jersey.”

I’m not convinced. Builders, who bet on the economy when they set out to develop a property are protected by their permits and board approvals for the life of those approvals. The idea is that they should be able to secure funding and get their projects going. If they can’t get funding or if the economy sours, they shouldn’t be allowed to change the rules.

Here is what the Sierra Club New Jersey Chapter has to say about it:

The Permit Extension Act would extend all permits and approvals for developers at the state and local levels for six years, allowing projects that were permitted many years ago to avoid changes in environmental law, public health standards, building codes, or local zoning. This bill is one of the biggest giveaways to developers in the history of New Jersey. It will result in more flooding, more people living on toxic sites, more sprawl, and more pollution.

The act would allow projects whose permits or approvals have expired within the past two years to be brought back to life, even if those projects would cause environmental harm or damage to public health.

It would undermine the state’s Pollution Discharge Rules, Flood Hazard Rules, Site Remediation Rules, Category 1 Rules, and others, preventing their appropriate implementation in violation of the laws that brought these rules into existence. In fact, the bill’s language specifies that the permit extension would be in effect from January 1, 2006, to December 31, 2012, due to the current economic situation. Disguised as a fix to a short-term problem, the Permit Extension Act is a long-term giveaway to New Jersey’s development lobby.

The act would also arbitrarily extend permits affecting federally-designated programs, such as the Wetlands Act and Clean Water Act, violating Memoranda of Agreement between the state of New Jersey and the federal government. In essence, this would mean that the Bush Administration, with its atrocious environmental record, would be more protective of the environment than the New Jersey legislature.

Do builders need help? Given the wild speculation and construction that has transformed the state — and this region in particular — over the last two decades, it would appear that builders should be providing the state’s citizens with aid in the form of money for school construction, mass transit and affordable housing, problems they helped create.

They certainly do not need a state bailout in the form of arbitrary extensions. If they bet wrong, so be it. And if, between the approval and expiration of a permit, the rules change, they should have to abide by the new rules — as all of us little people out here at home must do.

GOP offers disingenuous budget response

Three-plus months after Gov. Jon Corzine unveiled his $33 billion budget, the Republican legislative contingent is offering its response.

Too bad the response is as politically motivated as it is flawed.

According to a story in today’s Star-Ledger, the GOP wants to “to restore rebates and pay for big road jobs without toll and gas tax increases” by shifting more than $1 billion in spending from the cities to the suburbs.

The GOP plan would be financed largely by cutting aid to urban school districts and municipalities, as well as targeting state patronage and management jobs, legislative grants and public worker fringe benefits and salaries.

The paper describes the GOP plan this way:

The largest cuts to finance the GOP plan include $157 million from “special municipal aid” and $105 million allotted for the 31 poorest school districts.

They would save another $100 million by eliminating “anticipated pork” for legislative districts, $90 million through more efficient purchasing practices, $85 million by mandating new pension and health insurance givebacks, $69 million in less state subsidies for urban enterprise zones and $68 million by axing patronage and management jobs. The long list includes another $900 million in cuts.

According to a Republican press release, the

plan that identifies $1.32 billion in unnecessary spending in Governor Corzine’s
Fiscal Year 2009 budget proposal and uses it to restore property tax relief and aid to state municipalities, while eliminating the need for gas tax increases to finance transportation needs.

The GOP describes the proposal as both a short-term fix and long-term solution to the state’s annual budget crisis.

“Our primary concern in crafting a state budget should not be the priorities of
Trenton politicians, but those of the taxpayers who are demanding a more affordable New Jersey and a government that is more accountable,” said (Assembly Minority Leader Alex) DeCroce, R-Morris and Passaic. “This proposal is a reprioritization of state spending that provides more tax relief, a strategy to increase the share of pay-as-you-go funding for our state’s transportation program, and more money to reduce the debt burden now facing our children and grandchildren.”

But the key thing to understand about this budget proposal is that the winners would be the suburban constituents of the GOP and the losers would be urban Democrats. This is not to say that the Democrats have not fashioned their budget with this urban suburban split in mind, but it is disingenuous for the Republican leadership to pretend that this is any less political than that of their Democratic colleagues or that it will address the state’s needs in any real way.

One of the most interesting things about the budget plan is that it restores the rebates — something that contradicts the party’s criticisms when the new rebate plan was put into place.

The GOP does offer some structural proposals, but they are the kind that do little more than hamstring government: budget caps and supermajority votes on tax increases.

Some proposals do make sense: placing some borrowing plans on the ballot for voter approval, creating Initiative & Referendum (notice how the GOP always proposes this when it is out of power but then fails to deliver?) and some pension reforms.

But the key to understanding this is the politics. Everything in this state grows from a political agenda and until we can move away from partisanship for the sake of partisanship — which only creates pandering and a one-upping approach to government — and start focusing on the philosphical underpinning of the state’s government, we will not be able to climb out of this morass.

The questions we need to be asking have to do with what the proper level of government services should be and how we pay for it and not which political party will benefit the most.