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5-15-12 More Education and Related Issues in the News today
The Record - NJ tax collections are $230M behind budget, state announces

Philadelphia Inquirer -New state review again flunks Camden school district

Politickernj - Deal between Gov. and Sweeney included credit on property taxes and higher income limit

Politickernj - Assembly Democrats holding firm...continue to press for lower chambers' tax proposal

NJ Spotlight - Christie, Sweeney Reach Deal on Tax Cut, but Can NJ Afford It?..Greenwald warns of potential $1 billion shortfall, vows Assembly will fight for its own tax cut plan

The Record - NJ tax collections are $230M behind budget, state announces

State House Bureau

New Jersey tax collections are $230 million behind original budget projections after a dismal April, the state Department of Treasury announced Tuesday morning.

Though still above last year's tax collections by nearly 3 percent, Governor Christie was planning for more growth during the current budget year, which ends on June 30.

He’s also banking on a huge economic upswing during the budget year that begins on July 1, using that growth to support his “Jersey Comeback” budget and its signature income tax cut.

But if the current trend holds through the end of June, Christie will have to cut spending, dip into surplus or do something else to meet the state constitution's requirement for a balanced budget. The trend could also make it more difficult for the governor, a Republican, to pitch the first phase of his income tax cut proposal or convince Democrats who control the Legislature to enact some other form of a cut – something many expected to occur on Monday.

Instead, an expected deal between the governor and Senate President Steve Sweeney, D-Gloucester, was shelved, and Treasury officials delayed a planned release of the revenue information from Monday until this morning.

That new information on New Jersey revenue shows that tax collections fell short of budget projections by a full 5 percent in April, which is typically a make or break month for state finances every year after annual income tax returns are filed.

The poor April performance leaves New Jersey with $19.3 billion in revenue heading into the last two months of the budget year, according to the data released by Treasury. Christie had projected state tax collections of nearly $19.6 billion.

Though only off by just over 1 percent, there are only two months left to close the $230 million gap in what was projected to be a $29.7 billion spending plan.

Last year at this time, the state collected $18.8 billion in revenue through the first 10 months of the budget year, an improvement Treasury officials pointed to while announcing the new revenue information on Tuesday.

“While April’s revenues were somewhat below expectations, reliable indicators show that New Jersey’s economy continues to grow,” said Charles Steindell, the department’s chief economist. “Economic growth has brought in more revenue for the state in Fiscal Year 2012 than in 2011, which is a good sign for the future.”

Christie’s office, meanwhile, urged reporters this morning to focus on the two remaining months left in the budget year, as well as the $500 million improvement over the prior budget year.

But Assembly Majority Leader Lou Greenwald, D-Camden, said the new revenue data provides more evidence for the case he and others are making against the income tax cut proposal in the governor’s new budget.

“Today's revenue report is the latest evidence of why Governor Christie's proposed income tax scheme is wrong for middle-class families,” Greenwald said.

“New Jersey's middle-class families need more than fuzzy math, a hope and a prayer,” he said. “They need real property tax relief they can count on.”

State Treasurer Andrew Sidamon-Eristoff is scheduled to provide lawmakers next week with a more detailed revenue picture for both the current budget year and for the one that will begin on July 1.

Email: reitmeyer@northjersey.com

Philadelphia Inquirer -New state review again flunks Camden school district

May 14, 2012|By Claudia Vargas, INQUIRER STAFF WRITER

Any hope of burnishing the beleaguered Camden City School District’s image before Superintendent Bessie LeFra Young’s imminent departure seemed to disappear Monday when the state Department of Education’s revised “Quality Single Accountability Continuum” performance review’s findings became public. The scores show the district still failing in virtually all categories.

The district had appealed the initial QSAC report of early February that gave the district failing grades in four of the five categories — instruction and program (7 percent); operations (47 percent); personnel (9 percent); and governance (33 percent). It received 79 percent in fiscal management, which acting Education Commissioner Chris Cerf said was mostly because the district was checked daily by a state-appointed fiscal monitor.

Three months later, in a letter to Young dated May 8 that The Inquirer obtained Monday, the state Department of Education’s chief performance officer, Bari Anhalt Erlichson, states that the district had “submitted sufficient evidence” to raise scores on instruction and program by two percentage points (to 9 percent) and personnel by 10 points (to 19 percent). The scores in the other three categories remained unchanged.

The results of the reconsideration are to be presented to the school board tonight, the same night the board is expected to discuss and vote on Young’s separation agreement. Young, whose tenure became controversial in part because of her prolonged absences during her nearly five-year tenure, is said to be in negotiations on a buyout package. She has blamed illness for her poor attendance record.

The state’s QSAC findings are drastically different than the district’s self-assessment, which the district gave itself a perfect 100 percent in personnel, 98 percent in operations, 78 percent in fiscal management, 67 percent in governance, and 61 percent in instruction and program.

Young did not return calls for comment Monday.

A district improvement plan for each of the five categories is due to the state by June 1, according to Erlichson’s letter.

Parallel to the district’s plan, the state is working on an in-depth evaluation of the district, triggered by its initial QSAC scores. The evaluation should have been complete about now but Education Commissioner Christopher Cerf has granted an extension, said state Department of Education spokesman Justin Barra.

Politickernj - Deal between Gov. and Sweeney included credit on property taxes and higher income limit

By Darryl R. Isherwood | May 14th, 2012 - 8:02pm

The tax cut deal that was in the works today between Senate President Steve Sweeney and Gov. Chris Christie included the basics of Sweeney's intial property tax cut plan with an increased income threshold, sources familiar with the deal told PolitickerNJ.

The deal would include a 10 percent credit against the first $10,000 of property taxes paid for anyone earning less than $400,000, according to two sources. The income cap is up from Sweeney's initial proposal of $250,000. The plan also would restore the earned income tax credit to 25 percent of the federal credit from its current level of 20 percent.

Christie initially cut the earned income tax credit in 2010, estimating the savings from the cut at $45 million. The credit is available to generally low and moderate income taxpayers.

It's unclear how much the total plan will cost, however Sweeney's initial proposal has a $1.3 billion price tag.

Sweeney and Christie were set to announce the deal at a 3 p.m. press conference, but Sweeney cancelled the event citing a minor health concern. But sources say Senate Democrats were unhappy that Sweeney was prepared to announce a deal without first consulting other caucus leaders.

Assembly leadership is also said to be unhappy with the Sweeney plan and sources said part of the reason for Monday's delay was an attempt by the Senate president to bring the lower chamber on board.

Three tax cut plans have been making the rounds in Trenton for the past three months. The first, introduced by Christie during his annual budget address, would provide for a 10 percent income tax cut for all taxpayers. Democrats charged that the plan unfairly benefitted the wealthy and would provide only modest relief for the average taxpayer.

Sweeney's plan would tie the tax cut to income taxes paid, while capping eligibility at $250,000. In the Assembly, Democrat Lou Greenwald's plan would provide for a 20 percent credit against property taxes paid, paying for the extra relief by instituting a tax on incomes over $1 million.

Christie has declared Greenwald's plan dead on arrival as he has no plans to sign off on the millionaire's tax. But according to two sources there is growing sentiment among legislative Democrats that with bleak revenue projections, the extra tax may be the only way to provide cuts to the middle class.

Last week the Office of Legislative Services warned lawmakers that April revenues would lag behind 2011 numbers, putting the state in jeopardy of not meeting projections for the fiscal year. April numbers were due to be released Monday, but were delayed and are expected on Tuesday.

Several senators expressed surprise and even anger at the announcement of the press conference, saying they were unaware a deal had been cut.

Politickernj - Assembly Democrats holding firm

By Matthew Arco | May 14th, 2012 - 5:27pm

TRENTON – While rumors swirl that Gov. Chris Christie and Senate President Steve Sweeney are closing in on a deal over a proposed tax cut, Assembly Democrats say they are sticking to their guns.

Majority Leader Lou Greenwald (D-6), Voorhees, issued a statement Monday afternoon indicating Assembly Democrats would continue to push for the lower chamber’s tax credit proposal. The statement came despite news that Christie and Sweeney are on the verge of announcing a compromise on their respective plans.

The two were prepared to announce a deal on a proposed tax cut at a press conference this afternoon before Sweeney bowed out citing health reasons, sources said.

However, Assembly Democrats gave no indication Monday they would compromise on their plan, which the governor has repeatedly said is a non-starter.

“All we know is the Assembly plans to continue its fight for significant property tax relief for New Jersey’s middle class and seniors,” Greenwald said in a statement.

“Our plan is responsible, reliable and meaningful and because it’s based on economic fairness it can withstand the sagging revenues of Gov. Christie’s failed economic policies,” he said. “We will continue to talk to New Jerseyans about the impact property taxes have on their lives, and we will soon advance our plan legislatively for the good of middle-class New Jerseyans and seniors. We urge everyone to join us in our effort."

The Assembly plan would offer those earning $250,000 or less a 20 percent credit on property taxes and would pay for the cut by instituting a tax on incomes over $1 million.

Christie has repeatedly indicated he would not support any plan that calls for increasing taxes.

Christie's plan would give an across the board 10 percent income tax cut, while Sweeney's plan would tie the cut to the amount of property taxes paid. Sweeney's plan would have limited the tax cuts to those earning $250,000 or less, and would only apply to the first $10,000 in property taxes.

NJ Spotlight - Christie, Sweeney Reach Deal on Tax Cut, but Can NJ Afford It?...Greenwald warns of potential $1 billion shortfall, vows Assembly will fight for its own tax cut plan

By Mark J. Magyar, May 15, 2012 in Budget|1 Comment

Republican Gov. Chris Christie and Senate President Stephen Sweeney (D-Gloucester) have reached agreement on a compromise tax cut plan. Now the question is whether Sweeney's fellow Democratic legislators will agree with the plan themselves.

For one thing, the state could be facing a $1 billion shortfall over the next 14 months, according to Assembly Majority Leader Lou Greenwald (D-Camden). For another, the timing and details of the Christie-Sweeney compromise tax plan took Senate Democrats by surprise, and they're wary.

What's more, Greenwald remains committed to pushing his own tax cut plan in the state Assembly.

Under the proposed agreement, Christie would support Sweeney's approach of providing a property tax credit on state income taxes of up to $1,000, while Sweeney would agree to extend the tax credit to homeowners earning up to $400,000, up from the $250,000 income limit set in his original plan, according to a well-placed source. This would allow Christie to take credit for an income tax cut -- even though it is nothing like the original 10 percent cut Christie originally proposed that would have disproportionately benefited the wealthiest 1 percent, and even though Sweeney can continue to insist that it is a middle-class property tax cut.

Christie administration officials scheduled a 3 p.m. press conference to announce the tax cut compromise, then were forced to cancel it abruptly at 2:40 p.m. after Sweeney pulled out for health reasons after undergoing a medical procedure yesterday morning -- and after top Senate Democrats who were called by reporters howled in protest that they had not been informed of any deal.

No press conference will be held today either, as Sweeney has decided to try to persuade Greenwald and Assembly Democratic leaders to abandon their rival plan for a larger property tax credit. Their plan would provide a property tax credit on income taxes of up to $2,500 for senior citizens and $2,000 for homeowners earning up to $250,000, funded in part through the reimposition of a 10.75 percent "millionaire's tax."

Sweeney's pitch will fall on deaf ears, Greenwald said.

"All we know is the Assembly plans to continue its fight for significant property tax relief for New Jersey's middle-class and seniors. Our plan is responsible, reliable, and meaningful and because it's based on economic fairness it can withstand the sagging revenues of Gov. Christie's failed economic policies," Greenwald said.

Those "sagging revenues" were supposed to be detailed yesterday in an official Treasury Department report on April revenue collections, but the Christie administration abruptly cancelled release of that report late in the day -- even though Christie's Executive Order 8, signed the day after his inauguration in 2010, requires the release of monthly revenue figures on the 10th business day of the month, which was yesterday.

The fact that April revenue collections are coming in lower than expected is no surprise. David Rosen, the budget officer for the non-partisan Office of Legislative Services who has access to the Treasury Department's revenue database, sent a confidential memo to legislative leaders on May 3 reporting that income and corporate taxes for April were coming in below projections.

But Greenwald yesterday was the first to suggest that the final gap could be as high as $1 billion.

Rosen projected on March 27 that revenues would come up $144.9 million short of Treasurer Andrew Sidamon-Eristoff's projections in the current budget year that ends June 30 and $392 million short of Sidamon-Eristoff's forecast for the upcoming fiscal year for a total budget gap of $537 million.

"I am now told the total gap could be $1 billion -- up to $300 million in the current budget and $700 million next year," Greenwald said.

Michael Drewniak, the governor's spokesman, and Andrew Pratt, the Treasury Department's communications director, failed to respond to telephone and email requests for comment yesterday.

But key Democratic senators have said in recent weeks that they wanted to see whether the Christie administration's optimistic projection of 7.3 percent revenue growth -- the highest growth forecast in any of the 50 states -- was reasonable before committing to a tax cut.

Christie's proposed budget would use up $300 million of the $580 million surplus in this year's budget, leaving a surplus of just $280 million -- or less than 1 percent -- in case revenue projections come in lower than expected in Fiscal Year 2013, which starts June 30. If Greenwald is correct that the state's revenues will eventually come in $300 million lower than expected by the Christie administration, that entire surplus will be wiped out, or the Christie administration will be forced to make budget cuts.

Meanwhile, it was unclear whether the snafu over yesterday's planned Christie-Sweeney tax cut deal would have any long-term repercussions.

It was the Governor's Office that scheduled the press conference, but it was unclear why Sweeney had yet to brief his Senate Democratic caucus on the details of the plan -- or even that a potential deal had been struck. In any case, Sweeney was undergoing a medical procedure yesterday morning while plans for the press conference were being made and announced.

"Not one Democratic senator knew about this," said one Democratic senator who asked not to be named. "Everybody's waiting on the revenue numbers to come in first. This was a press conference that was hastily arranged, and I don't really know why they did it this way."

Senate Majority Leader Loretta Weinberg (D-Bergen) was clipped in her comments.

"I know that I have been supportive of Senate President Sweeney's plan for property tax relief," she said. "I'm just not going to go beyond that. The press conference was cancelled, and that's all I can comment on."

Sweeney has been impatient with the determination of Assembly Speaker Sheila Oliver (D-Essex), Greenwald and other Assembly Democratic leaders to push a rival plan for a larger property tax credit on income taxes that is funded by a "millionaire's tax" that Christie has already vetoed twice in past years and has declared "dead on arrival."

But there is a division in the Democratic ranks over whether the Sweeney or Greenwald plan is better politically for the Democratic Party. With polls showing most New Jerseyans favoring a millionaire's tax and preferring property tax relief to Christie's proposed income tax cut, some Democratic strategists argue that a vigorous campaign for the Greenwald plan can weaken Christie. This is important heading into August to the Republican National Convention, where Christie is likely to be on the short list for consideration as GOP nominee Mitt Romney's vice presidential running mate, and even more important heading into the 2013 gubernatorial election, when Christie would be up for reelection.

Other Democrats, however, fear that Christie is successfully using his bully pulpit at town meetings, on TV shows, and on YouTube to paint them as the party of higher taxes based on Greenwald's "millionaire's tax," and that the Assembly Democratic message that higher taxes on millionaires are being dedicated to property tax relief for most New Jerseyans is not getting through.

More in Budget »

Mark J. Magyar is an editor-at-large for NJ Spotlight

 

 


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