I posted an open thread question at Blue Jersey yesterday asking for a progressive solution to the state’s fiscal mess. Go here to participate.
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Tag: State
New Jersey: Living on credit
I know that this is generally considered necessary and justifiable debt — money for school construction — but the state already is buried in red ink. We have to find ways to pay down the debt we already have accumulated — without leasing out the Turnpike or other assets — and streamline government. We just spend too much money without getting a whole lot in return.
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Another reason for merging towns
The Record hits on something interesting in its editorial yesterday on the statewide corruption arrests — that this was not just a case of pay-to-play run amok, or of a handful of bad apples, but one that grows from the very structure of New Jersey government — the vast array of governing entities and the dozens of officials at all levels who hold multiple public jobs:
This case is a vivid illustration of the multiplied corruption opportunities presented by New Jersey’s surplus of municipalities, school boards and other public agencies, as well as the politicians who link them together by holding more than one public job.
Add in greed and what you have is the uglier side of New Jersey government.
I’ve been advocating for shrinking the number of towns and school boards and streamlining government, and it appears that this case offers another reason why we must forgo our romantic attachments to place names and realize that there are more efficient and effective ways to organize this state.
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Premature evaluations
The state’s pilot clean elections program has had a better showing this time out than it had two years ago, but I think it’s still premature to call it an unqualified success.
Yes, all six major party candidates in both the 14th and 24th legislative districts managed to collect the requisite contributions, but two Libertarians in the 14th failed to do so, as did three Republicans in the 37th (a district so Democratic that Republicans can seem like fringe candidates).
As anyone who has read this blog or my columns both for the Princeton Packet and the Progressive Populist knows, I am a supporter of clean elections and I agree that the enthusiasm for the program, especially here in the 14th, is great news.
But the hyperbole surrounding the announcement overstates what reaching the threshold actually means.
Here is Assemblyman Bill Baroni, the Hamilton Republican who is running for state Senate and a sponsor of the clean elections law:
“This may be one of the most important days in New Jersey’s fight to clean up elections. For two years, we’ve been hearing the naysayers say it couldn’t be done.”
A bit of an overstatement. All we have actually learned, so far, is that the thresholds that have been set and the contributions figures agreed to appear to be fair. They streamlined the program, but set a high enough bar to ensure that only candidates with serious support had a shot at the ballot (if you can’t collect 800 $10 contributions, you probably don’t have a lot of actual support).
What we don’t know at the moment is whether the program will have the desired impact on the system.
Remember, the program in its current form has been tried in only three districts, two of which were not competitive. It has not been tried during a primary and it was not put in place until after the candidates had already filed to run — a key point, because one of the main rationales for supporting clean elections is to expand the pool of available candidates beyond those with access to party money.
The reality is that the six candidates in the 14th, for instance, had access to significant campaign war chests had they chosen to forgo clean elections or had the state opted for a different district. The calculus that went into choosing the candidates — making sure that Hamilton is represented on the ticket, for instance, and making sure there is at least one Middlesex County candidate from each party — remained in place. None of the candidates stand out for being outsiders or newcomers to the process (two sitting Assembly members, three current or former municipal office holders and a former state official).
Getting what is essentially dirty, private cash out of the system is a real benefit, but that should not be the only goal and the only criteria for judging the program. And it should not be its only goal.
The clean elections system deserves a full run — all 40 districts for both primary and general elections, with third-party candidates being treated as equal players (unlike the current experiment, which provides them with a pittance when compared with what the major party hopefuls receive).
Only then will we have a real sense of whether the program can expand access to office beyond the run of political insiders who tend to rise of the ladder in this state and whether the influence of private money can be tamed.
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Expediency’s downward spiral
Perhaps things are darker than we realized here in the great state of New Jersey. I mean, thanks to a decision by then-Gov. Christie Whitman, the state is about $58 billion short in its fund to provide health care to retired workers.
In 1994, New Jersey decided to stop setting aside money in a fund to pay for health care for its retired public workers. The savings paved the way for a big tax cut.
Meanwhile, hundreds of thousands of public workers were being told that as long as they worked 25 years, the system would provide virtually free health care for them when they retired, often when they were as young as 55.
No one added up the cost — until now.
It turns out that New Jersey will need about $58 billion, in today’s dollars, to provide all the care it has promised its current and future retirees. That’s nearly twice the state budget and nearly twice the amount of its outstanding debt. And because of the step it took in 1994, the state has virtually no money in reserve to cover those costs.
And….
The portion of the $58 billion that they need to come up with each year will rise sharply because of soaring health costs and a burgeoning population of retirees, according to the New Jersey Treasury. The state will spend about $1.1 billion on this year’s care, and the figure is expected to double in five years.
Meanwhile, the state’s revenues are largely static. That means that unless something changes, New Jersey will have less money each year to pay for vital services like colleges, hospitals and mass transit. Its popular program to preserve green space just fell victim to the need to devote huge amounts to the retirement plans and debt servicing.
You remember 1994, right? The first year of the Whitman administration.
So what happens now?
To create a retiree health fund from scratch, Mr. Goldman estimated, New Jersey would need to start by setting aside $6 billion a year to make up for all the years of no contributions.
That is on top of the pension fund’s pressing needs for new contributions.
Which means….
making more retirees pay for part of their health premiums and by switching retirees into a network of doctors at negotiated fees. Currently, most state retirees can see any doctor. As of 2003, fewer than half the states allowed retirees to do so.
Not exactly the direction health care reform is supposed to take. But then,
the plan to make more state retirees pay part of their premiums had a setback in June. The government agreed to drop it for retirees who signed up for wellness programs, which are supposed to save money by reducing the incidence of preventable diseases.
Meanwhile, retired teachers have dodged the bullet entirely. Their union, the New Jersey Education Association, negotiates contracts with school districts and not with the state, and the state has not asked them to chip in for their premiums.
But have no fear. There is another plan on the table — asset monetization (otherwise known as the sale or lease of the N.J. Turnpike) — though its exact shape and the timetable on which it will be unveiled has yet to be, well, unveiled:
The governor’s advisers had hoped to use the turnpike proceeds to pay down debt or fund the state’s retirement plans. But in June, Mr. Corzine acknowledged that the effort had become a political lightning rod, with his opponents whipping up fear around predictions that that the turnpike would fall into foreign hands.
He said foreign ownership was not in the cards, nor is a sale to a profit-making company. For now, he says he wants more planning and public debate, putting off any way to use the turnpike as a financial resource until after the state legislative elections in November.
“I’m going to fight for it,” the governor said. “The status quo is unacceptable.”
I’m pretty certain that monetization will be unacceptable, as well, leaving us back at square one and the likelihood that major budget cuts and tax hikes are in the offing.
Welcome to New Jersey, the state where political expediency has made a royal mess of things.
South Brunswick Post, The Cranbury Press
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Hank Kalet 