Gov. Corzine pushes Legislation to borrow yet more… $2.5B for school construction. (I guess losing $6B is not enough)

NJ101.5 Radio – Millenium Radio

Governor Jon Corzine insists that requiring voter approval prior to State borrowing is crucial if New Jersey wants to right its fiscal ship. The concept was even one part of Corzine’s doomed four-part toll hike plan, but the Governor is still adamant about the borrowing aspect. This has some wondering why Corzine wants to borrow $2.5 billion for school construction without first asking the voters.

Yesterday in Newark, Corzine pushed legislation to let the state borrow $2.5 billion to restart school construction (the reason that the $6 billion School Construction Corp was created). The move is being questioned by Democrats and Republicans. The program stems from a state Supreme Court order directing that new schools be built in some of the state’s poorest districts. The Governor has informed the high court he would push lawmakers to approve an additional $2.5 billion by June 30 to restart the program, but legislators have yet to schedule action on any bills.

“The program sets aside funding from the (State) income tax to support the bonds,” says Corzine. “Not to just issue bonds with no means of paying for them.” He warns the voters could turn down the borrowing plan, “and then it will either be a choice of whether you raise taxes or crowd out something else in the budget.”

In a March budget hearing, State Senator Gerry Cardinale asked acting State Treasurer Dave Rousseau, “How do you justify what seems to be a split personality with respect to this issue in that it’s bad, but we’re going to do it once more?”

“We were under a court mandate to go back to the court in January with a plan to come up with $2.5 billion worth of money for school construction,” answered Rousseau. “What the Governor has said is for that $2.5 billion that he has talked about that he will pledge to dedicate a portion of the (State) income tax which is already used for property tax relief, to help pay those bonds.”

Cardinale says, “I think it might be wise in this instance to ignore the court throwing us into a position where we are either going to bankrupt the State or we’re going to bankrupt our residents.”

The Senate Budget and Appropriations Committee has already unanimously approved legislation that would expand State voter approval requirements for issuing public debt. The resolution would place a question on this November’s ballot that would amend the State Constitution to prohibit the State Legislature from enacting any law that authorizes any State agency or independent authority to borrow money that will be paid back with an annual appropriation unless that borrowing is approved by the voters. The full Senate has yet to act on the proposal.

State Senator Leonard Lance is one of the sponsors. He says, “The reason we’re in the fiscal mess we’re in in New Jersey is that for the last ten years we have borrowed unconscionably billions and billions of dollars without voter approval and we have to cut it out……We have dug a tremendous hole in New Jersey by borrowing without voter approval and the way to get out of that hole is to stop digging.”

“Unchecked state borrowing is what has gotten us into our financial crisis in the first place,” says co-sponsor, State Senator Ray Lesniak. “We’ve relied far too much on budget gimmicks and pushed off our financial obligations to future generations. Loopholes that allow State agencies to borrow without voter approval need to be closed if we are going to move forward.”

State Senator Barbara Buono, a Democrat like Corzine is another co-sponsor. She says, “This is an essential step in restoring New Jersey’s long-term financial health……It’s time to cut up the credit cards and borrow only for those projects that have broad public support.” Bouno says she’s “bewildered” by Corzine’s Wednesday event, “It seems violative of the spirit and the intent of the
proposed change.”

Under the resolution, voter approval would not be required if the debt is undertaken by an independent non-State agency and repaid by a third party or if the source of revenue used to repay the debt is required to be appropriated by the State Constitution.

The State Supreme Court has ruled the State must fund the building of schools in the so-called Abbott districts. The Governor says, “I think that we potentially have a constitutional conflict coming that could delay this process an extraordinarily long period of time.”

“The Supreme Court has permitted in the past borrowing without voter approval for school construction, but it certainly has never required that we fund new schools that way,” says Lance. He adds, “We could have a pay-as-you-go system, several hundred million dollars a year for a decade or so. That is preferable to me than borrowing and certainly borrowing without voter approval.”

More than 25 cents out of every $1. …

That’s how much spending auditors said was “unnecessary, excessive or lacking documentation” by Abbott school districts.

From our friends at inthelobby.net

Actually, that’s more than 25 cents out of every tax dollar.

Now, under normal circumstances, learning that the Plainfield school district tried to justify spending $504 on the private rental of a skating park for 144 students by saying students are learning math because they “will have to judge speed, radius of the ring,” would make us laugh out loud.

But these are not normal circumstances.

These are circumstances where Trenton is all but urging the Turnpike Authority to go ahead and raise the tolls.

These are circumstances where as soon as the governor gets done with the state budget, he’s going to unveil “Son of Toll Hike” and try to ram it through the Legislature.

And these are circumstances that despite almost daily pleading for lawmakers to do something to attack the waste in the state budget, to ferret out abuse, and to reform the pension system, there’s more talk about how they have to raises tolls or the gas tax, then there is to recoup tax dollars.

So reading in the Star Ledger that auditors uncovered $83 million in questionable expenditures in the Abbott school districts was nothing to laugh about.

Not when school districts can be so cavalier with our tax dollars that:
  • The Orange Board of Education spent $3,100 in tax dollars for a Christmas party for teachers and support staff;
  • Irvington spent  $6,421 for a school board retreat in Atlantic City; while another 250 purchase orders in Irvington totaling more than $15.5 million were not supported with invoices;
  • In East Orange, the district spent $10,836 for a superintendent’s convocation; $23,834 for 14 Dell laptop computers for board members, and $753 to cover the cost of 34 cakes — with no explanation as to why the cakes were purchased; and
  • Gloucester City spent $6,000 for meals for teachers and administrators.
Now, individually, these might not be large expenditures.

But taken together, what they add up to is the New Jersey taxpayer’s lament. They add up to the fact that our state suffers from a careless disregard of tax dollars.  New Jersey’s government, on all levels, has either forgotten who is paying the bills – or, worse yet, they simply don’t care.

Not every taxpayer or the company they work for can afford Christmas parties.  Not every taxpayer can afford laptop computers.  Not every taxpayer can afford a retreat in Atlantic City.

And one of the reasons they can’t is because the residents of New Jersey are paying too much in taxes.

And we are paying too much because some school districts and municipalities and counties and state agencies and departments forget that every dollar they spend, is a dollar that comes from a family – they forget that every dollar they spend is a dollar less that their neighbor can spend on themselves.

Instead, we hear how the Pleasantville School District is under investigation by the federal government. The Asbury Park School District is under investigation by the state.

And we learn that more than 25 cents out of every dollar that we send to Abbott school districts were  “unnecessary, excessive or lacking documentation.” That $83 million that the auditors cited could keep the state parks open.  It could keep the Department of Agriculture open.  It could go to bridge or road repair.
And when you add that $83 million to the all the other documented waste out there – like the $1.2 billion in MVC surcharges that the state hasn’t collected or the millions it spends unnecessarily in Medicaid or the millions it has spent on school construction – it is appalling that Trenton has the audacity to tell us they need more of our money, without lifting a finger to recoup all the other money that has been taken from us, that hasn’t been spent wisely or well.

We are not naïve. We know that we have to repair the roads and bridges.  We know that we have to pay down the debt, and pay for schools and hospitals and those who need our help. But we are also not fools.  Until they try to recoup what has been wasted, until they show more concern for the taxpayers who pay the bills than their political pals or the special interests they cater to, it makes no sense to give Trenton more of our money, because they don’t respect or honor what they already have.

…and therein lies Jon Corzines problem…

Two months after we the people rejected Corzine’s little $450 million in new borrowing for his stem-cell initiative, he stood before the state legislature and informed that the state was in a deep financial crisis – that NJ borrowed much more than it can pay back and something must be done…

SO: if in January, he “fesses up to the obvious”, why two months earlier is he pushing to borrow another $450 million???

Very interesting read from our friends at inthelobby.net

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

After his successsful sneak attack on Pearl Habor, Japanese Admiral Isoroku Yamamoto is said to have lamented, “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”

Fast-forward 66 years, and you have to wonder: Does Jon Corzine suspect that he may have done the same thing?

Call it what you will, but something is happening in the New Jersey electorate. It started in November, when voters who were smarter than their government rejected $450 million in new borrowing to pay for the operating costs of stem cell research centers that the state had already agreed to borrow $270 million to build.

Corzine, who sunk at least $100,000 of his own money into a pro-stem cell advertising campaign, was stunned when it didn’t pass, after pollsters and pundits and his own sensibilities had assured him it would.

Two months after that defeat, he stood before the state Legislature and solemnly exclaimed that New Jersey was in a deep financial crisis. The state had borrowed to the point of excess; debt service was eating up the budget, and something must be done.

His plan, as we all now know, was to turn control of the toll roads to a Public Benefit Corporation, which could sell bonds off the toll roads and raise tolls by 800 percent.

So here’s a question Corzine’s never answered: If he knew that the borrowing was eating the New Jersey budget alive in 2007 – as he surely did – why in the world was he out there promoting the sale of another $450 million in bonds?

And therein lies Jon Corzine’s problem.

He may not have connected the dots, but the public does. Corzine is no different than other politicians when it comes to spending our money on programs he thinks we should have — even if we can’t afford it.

That point became even clearer after his administration admitted that they also plan to go out and bond for another $2.5 billion in school construction – even though the state had already wasted more than $6 billion with very few schools to show for it the first time around.

For all his talk about putting the borrowing to the public, he doesn’t mean it. How can he? Corzine has given every Trenton politician a “Get Out of Jail” card when it comes to borrowing. As long as they declare that the bond issue would be paid for by an existing tax stream, it doesn’t have to go before the voters.
And that will stop borrowing how?For all his talk, Corzine’s vaulted promise that all future borrowing would go before the voters isn’t worth the paper it’s printed on.

Trenton politicians – heck, all politicians – want what they want when they want it. Corzine wanted to be a player in stem cell research. He wants to build new schools. The state doesn’t have any money, but why let that stand in the way of his legacy?

Only one problem. The voters said no to stem cell research.

He won’t make that mistake again. That’s why he says the school construction doesn’t need to go to the voters. And why he won’t put his massive $38 billion toll hike scheme before the voters.

Technically, he says it’s because they’ll both have dedicated funding (taxes on school construction, toll hikes on the toll roads.) The reality, however, is much simpler.

He can’t trust us not to say no.

When he went into the belly of the beast this week – Monmouth and Ocean counties, two areas that will be hurt the most by the toll hike plan – Corzine was likely not expecting the level of anger he heard from the residents.

And he was probably stunned that they knew all about his inconsistencies: agreeing to raises for judges, despite the state being broke; shouting down his attempts to say that any cuts in the budget would result in hospitals closing; and generally demanding that the government cut itself, before he asks them for any more money.

We love how whenever the governor is questioned on why he is forcing the state’s burden on such a small segment of the population, he pipes up with how frequent commuters could get a discount of 20 to 25 percent.

As if turning an 800 percent toll hike into a 600 or 660 percent toll hike somehow makes it fair or acceptable.

The real reason that Corzine wants commuters and those who drive the toll roads to pay an 800 percent increase is purely political: it affects fewer people than an overall hike in the gas tax, combined with significant spending cuts, would.

Want proof? Check out this map developed for the Asbury Park Press by City University finance professor Jonathan Peters. It shows where the highest concentration of E-ZPass users live in New Jersey.

Three guesses what counties appear hardest hit – Monmouth, Ocean, and Middlesex. The bulk of the counties don’t have significant numbers of E-ZPass drivers, according to this map.

It’s the same reason he’s putting off the toll hikes until the year after he and the state Legislature stand for re-election.

But Corzine couldn’t be that cynical, could he?

What the governor underestimated – as he underestimated in the stem cell research vote – is that New Jerseyans aren’t stupid. Their rising property tax bills have ended whatever complacency they once had.

They love their state, but they either can’t afford to live here, or are afraid they won’t be able to in a few years.

There’s a reason why more people are leaving New Jersey than coming in.

The people of New Jersey recognize that the politicians who are running their state government don’t understand that the status quo no longer works. That government spending is not the answer to their problem; it is the source of their problem. That government’s efforts to protect the bureaucracy are harming their families.

They understand that an 800 percent toll hike will mean all New Jerseyans will pay more for food, clothing and goods. That businesses like shipping and warehouses and distribution may move to other states, and take their jobs with them.

They know that families in New Jersey are forced to make hard choices every day in order to make ends meet, and government should have to make those same hard choices – before they go to the people and ask them for more.

A larger government will not make the lives of New Jersey families any better. A larger paycheck, and fewer taxes – and tolls – will. New Jerseyans are willing to make some sacrifices in order to fix the fiscal mess, but they’re not willing to be the only ones –and they want the government to be cut down to size first. Otherwise, the people know that despite what Corzine says, the government will go on, spending money it just doesn’t have.

Corzine’s already doing it – his new school funding formula expands government by mandating preschool education for low-income students, without identifying how he’s going to pay for it.

Whatever hopes the governor had that he could rush this plan of his through the Legislature has fallen wayside to the anger of the public. Tomorrow, there will be a rally at noon at the Statehouse, sponsored by NJ101.5 radio, to show voter discontent. The only way Trenton will listen is if they fear the wrath of the voters. A large crowd will make them notice.

In 1941, it was bombs over Pearl Harbor that awakened the anger of America. In 2008 New Jersey, it may well be pigs flying over the Statehouse.

Either way, New Jersey is awake. Let’s see how many politicians in Trenton start paying attention.

Gov. Corzine, not yet happy with his level of spending, seeks $2.5 billion more

Folks; this was a bad idea having Corzine as Governor… this better be his one and only term!

TRENTON — Before Gov. Jon S. Corzine gets approval for his plan to halve state debt by hiking tolls and borrowing more money, he plans to begin a separate push to borrow at least $2.5 billion to fund school construction projects in the state’s poorest districts.

That plan was revealed in a letter released Wednesday as the state Supreme Court heard arguments from lawyers representing children in the so-called Abbott districts who want a court-ordered deadline for the governor to approve the $2.5 billion needed to restart dozens of projects that were delayed when it became apparent the construction fund was depleting.

“The bottom line for the children in this case, the plaintiffs, is not just the introduction of a bill. We’ve heard that before,” said David Sciarra, director of the Education Law Center, which brought the case. “… The bottom line is the actual provision of funds so that work can resume.”

Abbott advocates have been in court on this matter before. Last year, the state Supreme Court declined to impose a deadline because the state suggested the matter would be handled as part of the fiscal 2008 budget adopted last summer.

The Legislature passed a measures to reform the state Schools Construction Corp. and rename it the Schools Development Authority but allocated no funds.

“You said to us, “It’s going to be taken care of in the ’08 budget,”‘ Justice Virginia A. Long told the assistant attorney general representing the state. “… So again you certainly have to acknowledge there’s reason for them to be leery.”

Now, the state points out that Corzine has announced his financial restructuring plan, which calls for halving the state’s debt and funding 75 years of transportation projects by borrowing up to $38 billion to be repaid through large toll hikes.

With the plan targeted for approval this spring, Corzine plans to begin pushing a separate piece of legislation to borrow the $2.5 billion seen as a stop-gap for two more years worth of school construction projects.

The administration expects legislation to be introduced in February and signed by Corzine before the July 1 budget deadline but cannot vouch for the Legislature.

“That is what the administration can do,” assistant attorney general Robert Gilson said. “They are one branch of government. They have spoken as to what they will address in terms of their obligations.”

Gilson wrote to the court in a letter dated Tuesday that Corzine’s plan to borrow the $2.5 billion will strive to be repaid through existing taxes, meaning it wouldn’t have to be put before the voters, something Abbott advocates have feared after Corzine proposed requiring voter approval for borrowing without a dedicated funding source.

“Not that it gets around it,” said Scott Weiner, chief executive officer of the schools authority, “it’s consistent with his plan that voter approval is required in absence of an identified, dedicated source of funding.”

Corzine spokeswoman Lilo Stainton said via e-mail that funding will likely come from the income tax — a move Republicans are already questioning since that tax is dedicated to property tax relief.

Senators from both parties questioned more borrowing when the governor is pushing a controversial plan to cut state debt.

“We are in the trouble we are in now in New Jersey because we have borrowed and borrowed and borrowed without asking the people themselves for approval to borrow,” Sen. Leonard Lance, R-Hunterdon, said. “Almost 90 percent of our debt is based upon this type of borrowing.”

Senate Majority Leader Stephen Sweeney, D-Gloucester, also questioned the move.

“It sends a mixed message to the public,” said Sweeney. “It just sends the wrong message right now.”

Corzine chief of staff Bradley Abelow said it was an unusual situation.

“We’re responding to a court mandate where we must provide funding to construct facilities in a certain number of school districts,” Abelow said. “And that funding has run out.”