NJ Spotlight - Annual Audit by Treasury Wraps Up Year of Battles Over State Budget
John Reitmeyer | April 10, 2015
Report shows revenues from taxes increased by total of $500 million, reflecting some growth in NJ economy
Gov. Chris Christie’s administration has officially closed the books on one of its most tumultuous budget years.
The state earlier this week released the comprehensive financial audit for the 2014 fiscal year, which saw the administration struggle with a $1 billion budget shortfall and a court challenge of its plan to remedy the gap before the fiscal year ended back on June 30.
Lawmakers last month complained that the audit was not yet available for review, saying it would make it harder for them to evaluate the $33.8 billion spending plan Christie has proposed for the next fiscal year, which begins July 1.
They were also upset that a complete list of spending adjustments -- known as “lapses” -- for the current fiscal year had not yet been released by the state Department of Treasury. The list has since been provided to legislative staffers, and a copy obtained by NJ Spotlight revealed $343 million in budget adjustments impacting 12 different departments.
The 2014 fiscal year audit showed tax collections mostly adhered to revised estimates Treasury released last May.
Audited income-tax collections totaled $12.3 billion, topping Treasury’s revised estimate of $12.05 billion. Audited sales-tax collections were $8.8 billion, which also beat the May estimate of $8.6 billion. The audited collections for the corporate business tax totaled $2.1 billion, slightly below the revised estimate of $2.4 billion.
In all, tax collections during the 2014 fiscal year topped revenues from the prior fiscal year by $500 million, according to the audit, meaning the state enjoyed some modest economic growth despite the budget challenges.
“The State’s three major taxes comprised 80.6 percent of the total general taxes that were collected during Fiscal Year 2014,” the audit said. “The State’s economy showed a slight improvement, as indicated by the $0.5 billion increase in general taxes when compared to Fiscal Year 2013.”
Ideally, the audit for the prior fiscal year is released before lawmakers start to go over the administration’s latest proposed budget, which Christie put forward on Feb. 24 of this year.
But that doesn’t always happen.
According to Treasury records, the audit has been released before February in five out of the last 10 fiscal years. But this year marks only the second time over the last decade that the audit of the prior fiscal year has been released by the administration in April. The last time that happened was in 2009, according to the records.
The delay was largely caused by a switch to new accounting standards, which involved taking a close look at data provided by more than a 100 local governments and school districts.
And despite the modest economic growth documented by the latest audit, that wasn’t enough to get Christie’s$33 billion budget through the year without any changes. Instead, the administration was forced to make several adjustments during the fiscal year after its initial revenue projections fell short.
Nearly $700 million in spending reductions occurred through mid-year “lapses,” savings realized after the administration lowered its revenue projections by $250 million. A roughly $1 billion shortfall then opened up in the final months of the last fiscal year, forcing a number of last-minute fixes, including the decision to reduce by nearly $900 million a planned $1.58 billion payment into the public-employee pension system.
Christie said the shortfall was tied to federal tax-policy changes enacted by the Obama administration for the 2013 tax year -- namely, higher rates for the wealthy.
Public-worker unions took Christie, a Republican, to court over the reduced pension payment, saying it violated a 2011 pension-reform law he signed after working with Democratic legislative leaders in an effort to fix a pension system that has suffered from years of underfunding by Christie and prior governors from both parties.
The 2011 law, which also called for increased employee-pension contributions, sought to establish as a contractual right of the workers a series of increased state payments into the pension fund over a seven-year period that began in 2012.
A Superior Court judge ruled late last June that Christie could make the reduced pension contribution only because the state was in the middle of a fiscal emergency, and because the state constitution prohibits deficit spending.
But the fight over the 2011 law continued into the current fiscal year after Christie also reduced a planned $2.25 billion pension payment down to $681 million, saying the state couldn’t afford the larger payment and that tax increases sought by Democrats would be bad for the state’s economy.
The worker-unions won an initial court battle challenging that cut in February, but the administration has appealed to the state Supreme Court, which will hear arguments next month.
Press of Atlantic City - Arts education gaining STEAM in local schools … Arts education gaining STEAM in local schools By DIANE D’AMICO, Education Writer The Press of Atlantic City
By Diane D’Amico, Posted: Tuesday, March 31, 2015 6:00 am
The arts have joined science, technology and math to build up some STEAM in local schools.
For years, a national focus on science, technology, engineering and math, or STEM, fields has encouraged students to consider careers in those fields. But a growing movement is turning STEM into STEAM by adding the artistic element that is integral to many successful STEM projects.
Absecon and Linwood schools are among those leading the charge.
“Why do people like Apple products?” asked Andrew Weber, principal of the Emma Attales School in Absecon. “It’s also because of the design.”
With time at a premium in classrooms, Absecon Superintendent Theresa DeFranco brought in Georgette Yakman, owner of a STEAM consultancy firm, to show teachers how to integrate STEAM into all projects, rather than treating its components as separate subject areas.
Absecon second-graders have designed leprechaun traps, and middle school students designed power plants and will build underwater robots made of Legos.
“They will have to create the robot themselves. This is not a kit,” said Absecon fifth-grade teacher Michelle Flynn, who is leading the waterbiotics project. “But it will also have to work.”
Fourth-graders studied habitats and ecosystems, then had to design and build their own. Teacher Stephanie Flynn said her students will also build Lego models with motors, link them to Chromebooks, then program them to create an animated story.
“They can act it out, write a song, do whatever they want,” she said.
Caleb Cavileer’s second-graders built the leprechaun traps to catch little green men threatening to destroy their classroom. Christian Hancock, 7, and Joey Scalfaro, 8, demonstrated the importance of teamwork, admitting they were behind at first because they don’t draw well and getting help from Riley McNulty, 8.
Eighth-graders at the Attales Middle School participated in a South Jersey Energy challenge to design an energy system for a specific location. They then had to build their system using recycled household materials.
Liam Gibson said his team chose a geothermal system for Disneyland because it’s cost-effective and doesn’t pollute.
“And it takes a lot to power Disney,” he said.
Monday was STEAM Fair day at the Belhaven Middle School in Linwood, which combined a career fair with hands-on projects for students.
Pete Davis’s Industrial Arts Class had to build cardboard coffee tables that could hold at least 80 pounds.
“We had all these science fair boards, and instead of throwing them into the Dumpster, we are repurposing them,” Davis said. He gave a quick lesson on weight distribution, then gave the teams 90 minutes to build their tables.
Seventh-graders Robby Crompton, Michael Dale and Kirby Voss managed to get 200 pounds of weights onto their table by making two large, round standing tubes the base and placing a board over them.
“We knew we had to distribute the weight and thought this would hold more,” Voss said.
On the more artistic side, Steve Mullen brought hand drums he made, giving students a lesson in the science, history and design of the drum, then encouraging them to create their own rhythms.
Sixth-grade math teacher and STEAM Club adviser Gina Wenzel, who helped organize the fair, said bringing professionals into the event let students see and hear how they use STEAM in their jobs. Guests included engineers and pastry chefs.
Belhaven Principal Frank Rednesky said teachers were already doing STEAM projects, and the event helped formalize the concept.
Carla Strang, Emma Gregory, Sonya Cohan and Anna Paytas were thrilled when their Rube Goldberg machine worked, after what Strang estimated was 20 or 25 tries.
“We always kept trying,” Strang said.
“And we learned from our mistakes,” Paytas said.
Guidance counselor Christine Ruth said she does career planning with students, and it can be hard for them to see beyond their superficial knowledge of a career. She wanted the fair to show them how different skills can be used in many areas.
“They don’t see all the possibilities of a career, they just see what they are used to,” she said. “The people here today are passionate about what they do and can share it. STEAM solves problems in the world, and middle school students connect with that. They want to make a difference.”
Contact Diane D’Amico: 609-272-7241 
609-272-7241 DDamico@pressofac.com
@ACPressDamico on Twitter