WSJ: Corzine Hits a Speed Bump

New Jersey isn’t usually considered exciting news. But it wouldn’t have hurt the national media to pay a bit more attention to what happened recently when Democratic Gov. Jon Corzine tried to sell the public on the largest borrowing scheme in American history.

Mr. Corzine’s motive was the looming disaster in the state’s public-employee retirement costs. As in other states, New Jersey politicians for years have promised government employees lavish retirement packages but failed to put aside money to fund them. The unfunded liabilities are far in excess of a trillion dollars nationally.

New Jersey faces one of the worst crises. The state pension plans cover not just state employees, but also teachers and law-enforcement personnel at the county and local levels. When the former CEO of Goldman Sachs was elected governor in 2005, he seemed uniquely qualified to address the problem, thanks to his grasp of finance.

Unfortunately, he also had a grasp of politics. And the politics of the Democratic Party require that benefits for public employees be expanded, not reduced. Ever since the New Deal, Democrats have embraced a trickle-down theory on public-employee benefits. The public employees get gold-plated benefits first, and this creates pressure on private employers to eventually match those benefits for their workers. As union leader Carla Katz told me, the Democrats embrace “the progressive theory that unless you create a substantial wage and benefits package that reflects good jobs and the ability to have a middle-class life style, there will be a perpetual race to the bottom.”

Ms. Katz is the New Jersey state president of Communications Workers of America, which represents thousands of state employees. She’s also the ex-girlfriend of the governor. Eyebrows were raised when her ex-squeeze addressed a Trenton, N.J., rally of about 10,000 public workers in 2006 and yelled, “We will fight for a fair contract!”

We? Apparently, no one told the governor he was in management. And at the time, management was being pressed to make the sort of changes that could have cut the pension burden, such as raising the retirement age and putting new hires into the public version of 401(k) plans.

Mr. Corzine rejected those reforms. That left him looking for money to make up unfunded liabilities of an estimated $25 billion for the pension fund and $58 billion for post-retirement medical benefits. Politicians in other states had sold their toll roads and gotten billions. And as toll roads go, New Jersey’s are among the busiest in the country. Mr. Corzine put up the idea of a sale as a trial balloon. The unions shot it down. But the governor came back with another trial balloon, this one based on a bond sale the size of the Hindenburg.

CLICK HERE to read the entire Wall Street Journal article

 

So Corzine… Time is up: Are you FOR US or AGAINST US?

Governor Corzine still loves his Toll Hike Scheme and will not let it die easily. During tomorrow’s state budget speech, he must make it look like the best alternative so beware the drastic budget cut recommendations he proposes. He likely paid a good consulting fee to the speech-writer (the same one that gave us “flying pigs”) because this is do-or-die for his scheme (we all know it’s all but dead).

However… did the Governor finally hear us, and is he ready to do the right thing?

READ THE REST HERE

As if we weren’t already ticked off about Corzine’s Toll Hike Scheme, wait till you read about the $500k a month he’s still spending on it…

Yep – that’s right! Our Jersey Republicans recently unearthed that our beloved Financial Genius of a Governor has spent $4 million on legal fees to firm Skadden, Arps, Slate, Meager and Flem (I mean Flom) – likely another member of the Corzine Cosa Nostra).

READ THE REST

HOLY COW – PIGS REALLY DID FLY! Corzine’s Fiscal Restructuring Agenda: Shift From Near Dead “Toll Hike”, To Budget Reduction

The governor conceded Thursday that his toll road plan has little support and that he may have to settle

According to three lawmakers, Tuesday’s Budget presentation is going to call for a $250 million budget reduction in likely response to the Governor’s “almost dead” toll hike scheme (Trenton finally heard our LOUD VOICES!!!)

READ IT HERE

Corzine’s Public Benefit Corp all but dead thanks to “A Different Road”

Corzine says the state is nearly broke: Wisniewski challenges that statement head-on:

“New Jersey maintains an “AA-’ bond rating on Wall Street. “Goldman Sachs, who everybody would acknowledge is a world-class financial operation on Wall Street, shares exactly the same financial rating as the State of New Jersey,” Wisniewski said. Corzine used to run Goldman Sachs.

Corzine’s Public Benefit Corp is likely all but dead thanks to Assembly Transportation Committee chairman John Wisniewski’s recommended plan.

Although the 18 cents gas tax hike may not be the ultimate answer, it does have a much more reasonable moderate Toll increase schedule and he does have the Trenton Legislators buzzing about it. The problem as I see it however, is that IT DOES NOT ADDRESS THE ROOT CAUSE. In other words, there’s nothing in the plan that calls for CUTTING spending (only freezing). Some Republican legislators, (preferably a newly elected official(s) like Scanlon/Casagrande/Beck?) need to submit another alternative that may incorporate “a modest” gas tax with across the board cuts.

Wisniewski’s plan would not cut state debt, which is a key element of Corzine’s proposal to raise tolls by roughly 800 percent by 2022 and by inflation from then on. Corzine has said reducing debt could save the state $1 billion a year in interest payments over the next decade.

But Wisniewski said his plan would more fairly spread the costs among all motorists.

“An 800-percent toll increase was going to fund transportation. I find that unacceptable,” Wisniewski said.

He said Corzine’s proposal would unfairly hit seven counties, including Middlesex, Monmouth and Ocean, that rely on the state’s toll roads while asking much less of the rest of the state. Wisniewski’s alternative would roughly double tolls by 2018 and would direct the money raised back to projects on the toll roads.

Corzine’s proposal would halve the state’s $32 billion debt, at least temporarily, and fund up to 75 years of transportation projects.

Under Wisniewski’s plan:

• The gasoline tax would grow by 18 cents, with inflationary increases following to fund transportation projects.
• On the Parkway, tolls would grow from 35 cents now to 75 cents in 2018. Corzine’s plan would raise the same toll, in four installments, to $2.70 by 2022.
• The Turnpike would see three 25-percent toll hikes in place of Corzine’s four increases of 50 percent plus inflation. That means today’s $1.20 average trip would cost $2.35 in 2018 under the Wisniewski proposal, compared with the $9.85 by 2022 called for by Corzine.
• A 50-cent Expressway toll would become $1 by 2014, compared with $4.05 by 2022 under Corzine’s plan.

Wisniewski also endorsed the same spending controls as Corzine, and even tighter restrictions on new borrowing.

“The governor is pleased that an active dialogue has emerged on how to put New Jersey on the path to fiscal responsibility while also recognizing the need to fund critical, long-term infrastructure improvements,” Corzine spokeswoman Lilo Stainton said.

Other lawmakers react

A Democrat whose support is key to Corzine’s plan, Sen. Raymond Lesniak, D-Union, applauded Wisniewski’s approach. Lesniak, who is sponsoring the Corzine proposal, said it will be much easier to convince toll-road drivers to support fee increases if they see the funding coming back to the highways they use.

“The governor trying to do everything all at once in one big bundle; that’s too complex to do it all in one way,” Lesniak said.

(That’s Trenton talk for: I’m not supporting Gov. Corzine’s plan any longer)

He said that once the state finds a source of transportation funding, a separate debate can begin on reducing debt.

But Senate Majority Leader Stephen Sweeney, D-Gloucester, said talk of a gas-tax hike is premature.

“Right now, there’s no reason to talk about a gas tax, there’s no reason to talk about toll increases until (Corzine) presents his budget,” Sweeney said.

Corzine is scheduled to lay out his plan Tuesday, and Sweeney, like other lawmakers, has called for reduced spending to alleviate the state’s financial problems.

Wisniewski disputed Corzine’s assertions that the state is nearly broke.

“Bankrupt really means that you’re insolvent, that you can’t pay your bills. That’s not a situation where New Jersey is at. We can pay our bills,” Wisniewski said.

He said New Jersey maintains an “AA-’ bond rating on Wall Street, similar to most other states.

“Goldman Sachs, who everybody would acknowledge is a world-class financial operation on Wall Street, shares exactly the same financial rating as the State of New Jersey,” Wisniewski said. Corzine used to run Goldman Sachs.

New Jersey’s debt costs the state $2.6 billion in payments each year, and growing pension and health care liabilities cost another $2.2 billion a year, according to the administration. Corzine has said those payments severely restrict the state’s ability to pay for needed programs and repairs.

Corzine’s Toll Road Plan in the Works for Years

From our friends at Millenium Radio:

If you think Governor Jon Corzine’s Financial Restructuring and Debt Reduction proposal is an entirely new plan, think again. A look back to the year 2005 reveals Corzine has been mulling the idea of doing something on a very grand scale for a very long time.

In July 2005, then-United States Senator and candidate for Governor, Jon Corzine was talking about ways to replenish the fiscally struggling Transportation Trust Fund. He said, “Selling long-term assets for a long-term acquisition of additional assets, capital assets, is a strategy that I think makes some sense.” He was asked if increasing tolls should be explored as well. Corzine answered, “I would like to look at other means of finding the way to fund this Transportation Trust Fund without making New Jersey even less affordable…..I guarantee you we will find a way to do that and the last resort is the gas tax. It’s going to be a complicated resolution of a problem, but we can make it happen.”

A “Corzine for Governor,” press release dated July 11, 2005 reads, “Given the recent spike in oil and gas prices that are squeezing family budgets, we must find other alternatives to raising the gas tax. As this report clearly highlights, we cannot simply enact stop-gap solutions that just buy time until the next crisis. We need fundamental reform. For example, we must explore new ideas such as repositioning assets, including state-owned land adjacent to train stations and major state highways to allow us to make critical transportation investments.”

Under the Governor’s current plan there will be no toll increases in 2008 or 2009, the year before and the year of the next gubernatorial election. In 2010, tolls will be hiked 50% plus the rate of inflation for 08 and 09. The tolls will be increased by 50% every four years after that while also factoring in the rate of inflation.

The Corzine Administration uses $1.21 as the average a toll road commuter pays per day. Under the plan, in 2010 that would go up to $2.05. In 2014, the total would be $3.46. In 2018, it will be $5.84 and in 2022, the final year of the scheme the total will be $9.86. That means a toll road commuter will be paying more than eight times what he or she is paying today to take the same ride in 2022. Tolls would continue to be increased at the combined rate of inflation every four years until the 75-year life of the plan is over.

Corzine wants to pay at least half of $32 billion in state debt and fund transportation projects for 75 years by creating a nonprofit corporation to manage toll roads and borrow up to $38 billion.

The Governor has been hinting at deep and painful spending cuts which he vows to unveil in his Budget Address next week. Last week, Corzine warned that if the State doesn’t get its fiscal house in order, property taxes could skyrocket, college tuitions could soar and hospitals could close. New Jersey has long suffered with chronic financial woes and it is reasonable to surmise Corzine knew of these problems in 2005 as well, but that hasn’t stopped State spending from rising with him at the helm.

Corzine inherited a State Budget of $27.9 billion when he took office in 2006. His first spending plan totaled $30.8 billion and the current budget stands at $33.5 billion. That’s a 20.1% increase under Corzine’s watch. He now insists the State must slash $2.5 billion just to freeze spending at the current $33.5 billion level.

Jersey Towns Could Be Ready to Speak Out Against the Corzine Toll Hike Plan

Millennium Radio 

As Governor Corzine presses ahead with his proposal to increase tolls 800 percent, he may soon be faced with an unexpected problem.

Last week Toms River passed a resolution strongly opposing the plan, and other towns all over Jersey could soon follow suit.

Bill Dressel, the Executive Director of the Jersey League of Municipalities, says his group does want to work with the Governor to improve the State’s fiscal situation, “but we’re not prepared at this point to sign off on this proposal – because I think this proposal is in a state of flux – I think it’s going to have to be changed…it’s difficult for us to be able to come up with a conclusion that this specific proposal is the right proposal at this point.”

He says he’s heard concerns from Mayors and other local leaders that raising tolls 800 percent would be unfairly burdensome for certain communities, and there are also fears about more trucks diverting off the Turnpike onto local roads – so “there may be a combination of revenue raisers that might have to be considered – but first and foremost, before we get into that discussion, we’ve got to see what the budget is going to bring on the 26th.”

The Governor has indicated he will present his proposed budget at the end of this month, and he says it could include budget cuts that might be very unpopular in certain circles.

The Corzine Cosa Nostra hard at work: Governor enlists wealth of lobbyists who could gain from toll-hike plans

The 54 people hand-picked by Gov. Corzine to promote his toll-hike plan include lobbyists whose clients could gain from the project and 10 people linked to a construction advocacy group promoting opportunities to network with state leaders.The panel’s chairman and two other members work for the state’s three top lobbying firms, The Record of Bergen County reported for Sunday. They represent engineers, financial companies, resorts, and utilities, all industries with the potential to benefit if the governor’s multi-billion-dollar financial restructuring plan is approved.

Ten of the appointees are connected to the construction advocacy group Alliance for Action. Three others are top executives with Verizon, Trump Entertainment and Public Service Electric and Gas Co., businesses that have benefited from prior laws.

“There’s not a common denominator beyond wanting New Jersey to be a better place,” said Corzine spokeswoman Lilo Stainton.

Corzine’s financial restructuring plan includes sharply higher tolls, the revenues from which will be used to pay down state debt and fund transportation projects. Tolls on the Turnpike, Parkway and Atlantic City Expressway would be affected.

Critics complain that Corzine’s panel lacks regular highway commuters.

Michael Riccards, executive director of the Hall Institute, a public policy group, suspects varying motives among committee members.

“There are people who are genuinely concerned and believe the governor has given them a plan to get out of the wilderness,” said Riccards. “There (also) are people who are looking to make a buck off this.”

Corzine & Lautenberg’s Toll hike opposition: “This has electoral consequences”

…said Brigid Harrison, a political scientist at Montclair State University. “The strength of the relationship between Corzine and Lautenberg was important. Now there’s this kind of one-upmanship. It’s surely going to be escalating.”

Article in today’s Ledger:

Lautenberg facing fury of a governor scorned

BY JOSH MARGOLIN AND DEBORAH HOWLETT

U.S. Sen. Frank Lautenberg’s opposition to Gov. Jon Corzine’s highway toll plan has opened a rift between the two men that could affect the senator’s re-election bid.

The senator announced last week that he would not support Corzine’s call for higher tolls as part of a plan to restructure the state’s finances. The statement came after all three Republican candidates for Lautenberg’s seat came out against the toll plan.

Lautenberg’s announcement was a surprise and led one senior Corzine aide to tell top Democrats that the governor would retaliate by ceasing his fundraising efforts, and canceling a Manhattan fundraiser to be held next month at the home of a Corzine friend.

In an interview yesterday, Corzine declined to comment on the aide’s threat. Asked about Lautenberg’s opposition to the toll plan, the governor said: “I don’t agree with his judgment on this particular situation. We see it differently.”

The governor’s top political adviser, Tom Shea, said the governor “will continue to assist in (Lautenberg’s) fundraising efforts,” and added that the March fundraising gathering would still be held.

“But it is safe to say,” Shea said, “that it will be more difficult to raise money from the governor’s strongest supporters in light of (Lautenberg’s) statement on the governor’s plan.”

Lautenberg campaign manager Brendan Gill said the senator had no comment.

State Senate Majority Leader Stephen Sweeney said Lautenberg’s announcement last week was not “helpful” to the governor, especially because the senator needs Corzine’s assistance in his campaign.

“It causes a problem if the governor doesn’t push people to help and donate,” Sweeney (D-Gloucester) said. “If his heart’s not in it, of course, it’s going to be a problem. Fundraising stinks to start with.”

Lautenberg, a four-term incumbent, is facing a potentially tough and expensive race this fall. Though no one in the GOP field is as well-known as Lautenberg, one of the Republicans, Anne Evans Estabrook, is a businesswoman whose personal wealth alone could make her a formidable challenger.

READ THE REST HERE

Public Benefit Corp: The Few, the Privileged, the “Corzine Cosa Nostra”

Is there any way on this planet that this governor has credibility? NO

Is there any reason to believe that there’s no shenanigans going on here? NO

Is there any reason to think that this governor has our best interest in mind when creating this piggy bank for “the few, the privileged, the Corzine Cosa Nostra”?  Again: NO

Do you trust him? NO

Will you vote for him should he attempt to ever run for any office again? NO

Will you vote for any legislator that goes along with him? ABSOLUTELY NO

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This is in today’s App: (highlights and comments are my own)

Gov. Corzine would bar the public from examining the inner workings of the toll-road corporation that he wants to create to raise $32 billion, even though it would employ thousands and spend billions of dollars, according to his proposed bill.

Under Corzine’s draft legislation for the toll-road monetization plan, the proposed Public Benefit Corp., which would operate more than 334 miles of state roadways and could increase tolls by as much as 800 percent in the next 14 years, would not be subject to the state’s Open Public Records Act. By failing to put the PBC under the open records law, it would omit from public scrutiny broad swaths of records from an organization that would have an initial toll revenue of about $900 million.

Not opening the PBC up to full public inspection would be “unconscionable,” said state Sen. Jennifer Beck, R-Monmouth, who opposes the monetization plan.

“I’m stunned. This entity would be in control of a significant public asset, and controlling multiple billions of dollars, and billions of billions over the next 99 years,” Beck said. “To me, it must be subject to (the Open Public Records Act), so there is transparency for the citizens.”

Under Corzine’s plan, the state would lease its three toll roads to the nonprofit corporation for up to 75 years, with a 24-year optional extension.

In exchange, and through a complex bond deal, the state would receive $32 billion to $38 billion that would be used to help the state cut its debt and provide more money for transportation needs, according to the plan.

The plan has generated strong opposition in public opinion polls and from all Republican members of the Legislature. U.S. Sen. Frank R. Lautenberg, D-N.J., and state Sen. John Adler, a Democrat running for Congress, also oppose the toll-hike plan.

Corzine, a Democrat, wants the Legislature, controlled by his party, to approve the plan this spring. The agency would control the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway.

The Open Public Records Act, or OPRA, was signed into law in 2001 following a campaign by Gannett New Jersey newspapers and other open government advocates to allow easy access to such routine documents as payroll lists and bills. Until the law was adopted, many agencies withheld such records from the public.

“The PBC is being formed under nonprofit law and would be treated as a conventional nonprofit, none of whom are subject to OPRA,” Tom Vincz, spokesman for the state Department of Treasury, said in an e-mail response to questions from Gannett.

He did not respond to questions about why the PBC would not be covered by OPRA, or if payrolls, bills and other items commonly accessible under the law would be available in the future.

Nonprofit organizations must provide limited public financial disclosure, such as the salaries of the top five employees and basic budget data, to the Internal Revenue Service once a year.

Under Corzine’s proposal, the PBC would have to produce reports to its oversight agency, including annual budgets, capital expansion and maintenance programs. Such documents would then be public under the public access law.

Vincz said that the PBC’s operating contract would also “create a long series of other reporting including maintenance reports and traffic data,” that would become public records once the oversight agency obtained them.

Under the bill, the PBC would be required to conduct independent audits of its financial statements, Vincz wrote.

Elizabeth Mason, president of the New Jersey Foundation for Open Government, said to excluded the PBC from the records law is the opposite of what the state should be doing.

“What is the rationale for the government to do this? What is the rationale for the government to hide this information from the public?” she asked.

(I keep saying it over, and over again… it’s called THE CORZINE COSA NOSTRA – that’s the reason)

Thomas J. Cafferty, general counsel for the New Jersey Press Association, a newspaper trade group, said that neither he nor the association has finished reviewing the proposed legislation.

But he said that just because the bill does not require the PBC to fall under OPRA doesn’t mean that the proposed bill can’t be changed in the Legislature. The courts could also require the PBC to disclose its records, “given the extent of the public involvement in this entity,” he said.

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James W. Prado Roberts: (732) 643-4223; or jwr@app.com