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6-13-12 Education, State Budget and Related Issues in the News
GSCS Note: Late yesterday S1455 Ruiz was scheduled to be heard in the Senate Education at 1 pm June 18th…stay tuned

NJ Spotlight – Christie Presses the Flesh -- and His Case for Tenure Reform…Governor works town hall meeting, while legislators continue to work behind the scenes on two tenure reform bills

Star Ledger - Gov. Chris Christie tells Haddonfield audience he wants budget deal by deadline

Philadephia Inquirer - Kevin Riordan: Christie on his game in Haddonfield “…The tenure system for educators can be reformed…”

NJBiz - Tax Foundation: Millionaire's tax will curb economic growth

The Record - Analysis: Tax relief could sink NJ into a $1 billion hole as revenue loss grows year after year… “Direct school aid in the new budget is set to increase by $121 million, an expenditure that could increase over time with the state still mired in court fights over education aid. A state Supreme Court ruling last year added nearly $500 million in spending for school aid at the last minute…”

NJ Spotlight – C hristie Presses the Flesh -- and His Case for Tenure Reform…Governor works town hall meeting, while legislators continue to work behind the scenes on two tenure reform bills

By John Mooney, June 13, 2012 in Education|1 Comment

Tenure reform, New Jersey style, took a few more twists and turns yesterday, with Gov. Chris Christie pressing the case in public while legislators and staffers continued to work in private on a couple of fronts.

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The Christie push came at one of his town hall meetings, this one before more than 600 people in a Haddonfield middle school. He again invoked the example of just 17 teachers facing tenure charges as ineffective in the past decade, out of more than 100,000 in the classroom.

“Do we really believe there are only 17 ineffective teachers in New Jersey?” he asked the receptive audience.

He has called for tenure reform to be decided in the next 19 days before the traditional summer break at the end of June. It is among his top priorities, he said, along with an income or property tax reduction and a settled state budget, the latter required by law.

Meanwhile, discussions continued on two competing bills in the Legislature, the odds-on favorite sponsored by state Sen. Teresa Ruiz (D-Essex). That bill would require teachers to have three consecutive years of positive evaluations to retain tenure, and see the tenure lost after two years of ineffective ratings.

Neither Ruiz nor any of the key players were talking publicly yesterday about the ongoing discussions on the details of the bill. Even identifying what those details are remained off-limits, but significant issues that have been discussed in the past have included seniority rights for teachers, the place of student test scores in teacher evaluations, and how tenure charges would be decided and potentially appealed.

But Ruiz’s bill suddenly appeared on the agenda for Monday’s Senate budget committee meeting. Ruiz chairs the Senate education committee, and the bill was expected to be back before her committee.

Meanwhile, state Assemblyman Patrick Diegnan Jr. (D-Middlesex) is proceeding with a hearing on a separate bill on Thursday before the Assembly education committee, which he chairs.

That bill has been publicly backed by the New Jersey Education Association, the powerful teachers union, although its leaders have been in discussions with Ruiz over the past several months as well.

Diegnan’s bill mirrors Ruiz’s in setting three years of positive evaluations for tenure, but is less specific as to what happens to teachers after poor evaluations. It would only demand tenure charges be filed after three years, not actually revocation of tenure.

Diegnan’s bill also lays out a process of binding arbitration for contested cases, not the administrative court specified in Ruiz’s bill. He also makes no reference to easing seniority rights for teachers, which protects more experienced teachers in the face of layoffs, a key component of Ruiz’s bill.

All this has left some lobbyists strategizing as to whether to attach themselves to one bill or both.

“What we want at the end of the day is to get to a place where there isn’t tenure in the traditional sense and we have renewable contracts for teachers based on their evaluations,” said Michael Vrancik, chief lobbyist for the New Jersey School Boards Association.

“Either way, it is moving in that direction, although more slowly than we would like,” he said.


Star Ledger - Gov. Chris Christie tells Haddonfield audience he wants budget deal by deadline

Published: Tuesday, June 12, 2012, 6:20 PM Updated: Tuesday, June 12, 2012, 10:45 PM

By Jenna Portnoy/Statehouse BureauThe Star-Ledger

HADDONFIELD — The day after the Christie administration asked his cabinet to figure out what would happen in case of a government shutdown, he told a town hall audience he expects a budget deal in time for the deadline in a few weeks.

The well-attended afternoon event marked a return to the big crowds to which he is accustomed. According to his staff, 750 people showed up in Haddonfield in contrast to last week’s rarity where there were empty seats at a morning town hall in Piscataway. The number of registered Democrats in both Middlesex and Camden counties outpaces that of registered Republicans.

The governor said he was late — by 27 minutes — to the Haddonfield Central Middle School gymnasium because he was on the phone with Senate President Steve Sweeney (D-Gloucester) talking about tax cuts.

Though he often touts a history of compromise with Sweeney, Gov. Chris Christie said they have crossed hairs over judicial nominations. “You voted for someone who said, I’m going to change the court. I said it all through the campaign,” he said.

Against Christie’s wishes Monday, the court refused to delay an appellate court order reinstating the Council on Affordable Housing. He had been counting on $161 million from the agency.

 “When the Supreme Court makes the law, you have no recourse,” he said, mocking judges who say: “I’m appointed for life. Leave me alone … That’s why those people shouldn’t be making laws because they don’t have to be responsive to the people paying the bills for the laws they’re making.”

Christie also wasted no time in slamming Assembly Majority Leader Lou Greenwald (D-Camden) in his own county.

“Now here comes Lou Greenwald with his next bright idea, to let mayors and council people impose an income tax on you and a sales tax on you and then he promises, hand up, that you’ll see your property taxes go down,” he said, adding: “He’s a good-looking guy with nice suits and he talks real smooth.”

Before the event started, Greenwald launched a preemptive strike, saying Haddonfield's average tax bill has gone up 22 percent and school funding has been cut 45 percent in the first half of Christie’s term.

"When will he end his policies of catering to the wealthy instead of the middle-class, policies that have landed New Jersey 47th in the nation for economic growth?” he said in a statement. “The governor talks a lot about a Jersey Comeback, but under Gov. Christie, we're seeing a Jersey Setback with ever-increasing property taxes, an economy that's falling behind and an unemployment rate that is far worse than the national average.”

He accused Christie of gallivanting around the country on behalf of presumptive GOP presidential nominee Mitt Romney.

As if on cue, Christie opened the town hall telling the audience he has “good memories” of Haddonfield because Romney endorsed his gubernatorial candidacy here ahead of the 2009 Republican primary.

In response to an audience question about whether he’d accept a hypothetical vice presidential invitation from Romney, Christie repeated one of his standard answers: “If you’re a betting guy, I’d bet on me being governor of New Jersey in 2013.”

Philadephia Inquirer - Kevin Riordan: Christie on his game in Haddonfield  “…The tenure system for educators can be reformed…”

June 12, 2012|Kevin Riordan

Anyone hoping for fireworks at Gov. Christie's "Jersey Comeback" road show in Haddonfield on Tuesday left disappointed.

Opponents of the proposed merger of Rutgers-Camden and Rowan universities — about which the Republican governor said nothing — didn't get much satisfaction either.

But those who lined up in the rain, then sat or stood for two hours in Haddonfield Middle School's swampy gymnasium, in order to watch a gifted politician at the top of his game seemed to come away pleased.

"I like the fact that he stands up to do what we hired him to do," said Deb Kranz, a Mount Laurel businesswoman and self-described conservative Republican. "I respect his tenacity, strength, and determination."

Kranz was tenacious, too. With the gym filled to capacity, she stood outside with about a half-dozen people, including a silent, sign-carrying trio of protesters concerned about Camden, and listened to the governor through an open door.

If what the audience heard was short on surprises, it was long on applause lines.

Our taxes will be cut, Christie declared, if those silly Democrats in the state Assembly come to their senses. The tenure system for educators can be reformed, if unions become student-, rather than teacher-centric.

"What the teachers' union is about," he charged, "is protecting the worst." And bureaucrats "sitting in cubicles" are to blame for many of New Jersey's woes. "What ‘Trenton makes,'?" the governor said, referring to the capital's landmark bridge, "are stupid ideas … our main export now."

Deftly working a crowd that was enthusiastic, but decorous — perhaps due to heat, or sheer Haddonfield-ness — Christie was gracious, and in good humor.

He took questions about "food deserts" in Camden, solar power, and the needs of autistic children, along with juvenile binge drinking and his cap on municipal budget increases. He had a cute-kid moment with a third-grade girl in pink, and he riffed on some of his favorite subjects, such as the need to recast the state Supreme Court.

Christie made only passing reference to the legislature's stinging rejection of his two recent high court nominees, opting to lambaste the court itself for "making" rather than "interpreting" the law. That line drew the event's most robust applause.


NJBiz - Tax Foundation: Millionaire's tax will curb economic growth

By Katie Eder June 12. 2012 1:39PM

As New Jersey legislators continue to push conflicting versions of a tax cut proposal under the looming June 30 budget deadline, a new study by the nonpartisan Tax Foundation shows a plan by Assembly Democrats to use a so-called "millionaire's tax" to fund a tax credit would hinder economic growth in the state.

"High progressive tax rates disincentivize developing job skills and career advancement, and reduce the number of hours people are willing to work," the report said. "Taxes on high-income filers include business income, and raising taxes on this group would have negative effects on long-term economic growth."

While Gov. Chris Christie twice vetoed attempts to reintroduce a millionaire's tax — actually, an income tax surcharge on the state's wealthiest residents — Democrats have threatened to put the measure on the ballot as an amendment to bypass a veto.

According to Tax Foundation economist Scott Drenkard, regardless of which tax cut plan is adopted, the state "already has a pretty progressive income tax code" weighing on top earners.

"Folks on the left say Christie's plan would disproportionately benefit the rich, but what he was going for was a 10 percent cut across the board," Drenkard said. "In raw terms, his cut is larger for high-income earners, but they're already paying more taxes under the state's progressive tax code."

Drenkard said progressive tax policies, like a millionaire's tax, disproportionately "lean on high-income earners to fund budget shortfalls, which makes for exceptionally volatile revenue streams" and creates problems with funding government services.

"When states tie their revenues to businesses' incomes, their revenues streams are linked to business and economic cycles, which aren't very stable," Drenkard said. "As states face budget shortfalls, moving away from progressive taxes will provide more stable revenue streams."

The Record - Analysis: Tax relief could sink NJ into a $1 billion hole as revenue loss grows year after year… “Direct school aid in the new budget is set to increase by $121 million, an expenditure that could increase over time with the state still mired in court fights over education aid. A state Supreme Court ruling last year added nearly $500 million in spending for school aid at the last minute…”

Wednesday, June 13, 2012 Last updated: Wednesday June 13, 2012, 7:51 AM


New Jersey will be on a course to lose at least $1 billion annually in the coming years if lawmakers give Governor Christie a new state budget that includes either his call for tax relief or theirs.

The competing tax-relief plans that the Republican Christie and Democrats who control the Legislature are pushing now come with a seemingly modest, $183 million price tag on a $32 billion spending plan.

But both the direct income tax cut Christie wants and the new income tax credit for middle-class homeowners that Democrats have countered with call for multiple-year phase-ins, meaning after a few years actual costs will range from more than $1 billion annually to more than $2 billion based on the current proposals.

The loss of that revenue would hit the state budget at the same time tax collections are missing original estimates by as much as $1.4 billion thanks to New Jersey’s slow crawl out of recession.

And over the next several years, the cost of the proposed tax relief would compete with other big-ticket spending commitments already made by lawmakers and the governor to create an even tighter fiscal crunch, a Record analysis found.

That means any new tax relief approved this year could crowd out other priorities in future budgets if revenues don’t meet lofty projections, because New Jersey’s constitution requires a balanced spending plan.

Tax collections over the last several months have already trailed Christie’s budget projections, and his plan for a 10 percent income tax cut is forcing hard decisions that are affecting other areas.

The governor and Democratic legislative leaders are in the midst of debating three different tax plans as they near a July 1 deadline for a new state budget set forth in the state constitution.

“We have money there to do it,” Christie said on Tuesday during a town-hall event in Haddonfield. “We’re ready to do it.”

But it’s in future years when the cost of Christie’s plan or the ones put forward by Democrats would really add up. And the governor — who is being looked at as a possible running mate for GOP presidential hopeful Mitt Romney — may not be here to see that occur. He has yet to say whether he is running for reelection in New Jersey next year

If approved, any new tax-relief expenditure would be included in a state budget that’s already being stressed by the cost of other priorities, including economic development, education, public employee pensions and transportation.

Business tax breaks designed to stimulate much-needed job growth will cost an estimated $350 million in the new budget and rise to more than $600 million annually in a few years.

Direct school aid in the new budget is set to increase by $121 million, an expenditure that could increase over time with the state still mired in court fights over education aid.

A state Supreme Court ruling last year added nearly $500 million in spending for school aid at the last minute.

The new budget also includes a $1 billion payment into the grossly underfunded pension system, and that payment is now scheduled for regular increases mandated by state law to help repair the fund that pays public employee retirements.

And New Jersey’s commitment to so-called pay-go transportation spending — something intended to ease the state’s addiction to borrowing — is also scheduled to rise over the next few years, to $600 million annually.

To meet all of those commitments moving forward while also offering new tax breaks, New Jersey tax collections will have to grow more rapidly than the modest growth that has been seen the last 12 months.

Last week, the federal government ranked New Jersey’s economy 47th among the 50 states for 2011. And the state’s unemployment rate remains well above the national average, with new figures expected as early as this week.

The non-partisan legislative budget analyst David Rosen forecasts a gap of as much as $1.4 billion between Christie’s original revenue estimates and what is now projected to be collected in taxes from now until the end of June 2013.

The Christie administration disputes that forecast, but recently lowered its own revenue projections by roughly $700 million for the same term.

And during a speech last week before an influential conservative group in Chicago, Christie held back the New Jersey Comeback phrase that he’s used repeatedly since the beginning of the year to help sell the proposed income tax cut both in-state and to a national audience.

Scott Pattison, executive director of the National Association of State Budget Officers, said state revenue collections nationwide were hurt by recession and are only now in a period of “tepid growth.”

“In our view, both revenue and spending growth is rather slow compared to averages of the past,” he said on Tuesday in a conference call with reporters on the National Governors Association’s Fiscal Survey of States.

Raising taxes on earnings of above $1 million to bring in more revenue — something many Democrats are suggesting as a way to keep their tax-relief proposals alive — would hurt New Jersey in the long run, according to Scott Drenkard, an economist with the right-leaning Tax Foundation.

“Taxes on high-income filers include business income, and raising taxes on this group would have negative effects on long-term economic growth,” he said.

To help keep his tax-relief proposal viable amid the slow revenue growth, Christie is raiding funds set aside for affordable housing and clean energy programs, while also taking money that had been allocated for transportation spending,

The latter move will lead to $260 million in new borrowing even though the state constitution prohibits going into debt to balance the budget.

But New Jersey was already falling short of prior spending commitments before those one-shot fixes were announced last month.

Under Christie, who took office in 2010, the state has either skipped or made only partial payments into the pension system, which had a $42 billion deficit as of the last accounting.

The governor’s new spending plan would also fall short of the benchmarks set forth in the state’s school funding law for the third straight year.

And raiding transportation funds to offset missed revenue projections reverses course on the governor’s own plan to ease New Jersey’s heavy debt burden, which was one of the factors Wall Street ratings agencies identified when they lowered the state’s credit rating in 2011.

The governor, however, still enjoys strong popularity in New Jersey according to most recent opinion polls, and for the first time in years more New Jerseyans feel the state is headed in the right direction than those who don’t.

State House Bureau reporter Melissa Hayes contributed to this article.
Email: reitmeyer@northjersey.com


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