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Asbury Park Press, Issues section - Gov. Chris Christie says he's ready for a fight with unions to cut costs Gov. Chris Christie sat down with the editors of the Asbury Park Press and Gannett New Jersey last week… He continued his criticism of the state's teachers union and vowed to continue to make changes to public sector pensions, benefits and salary structure
Philadelphia Inquirer - 'Budget fight looms over tax on rich'…Critics assail Christie's plan not to renew surcharge on incomes of $400,000 or more.
'N.J. releases annual guide on school spending' The New Jersey Department of Education released its annual Comparative Spending Guide Friday in advance of the many public budget hearings to be held next week in school districts statewide.
Asbury Park Press, Sunday Issues section - Gov. Chris Christie says he's ready for a fight with unions to cut costs
Gov. Chris Christie sat down with the editors of the Asbury Park Press and Gannett New Jersey last week. In his comments, Christie placed much of the blame for the state's financial crisis on teachers and other public sector workers. He continued his criticism of the state's teachers union and vowed to continue to make changes to public sector pensions, benefits and salary structure.
Q: Across New Jersey, the state's proposed budget cuts appear to be hitting average New Jerseyans — middle school sports programs are being canceled, teachers laid off, bus riders told that their bus has been eliminated. Last week, the Southern Regional School District canceled your appearance because they said they couldn't guarantee a "constructive environment." What are you going to tell people who are surprised that the state budget crisis they may have thought was a Trenton problem is now affecting their immediate life?
A: This has been building for 20 years and we've all known it. This paper has written about it. Most papers across the state have written about it. People who have run for the job I have now and held it have papered it over. They've found tricks and other ways to deal with it. Now the chickens have come home to roost.
What I would say to them is that when you look at a state budget that spends well over 50 percent on direct aid — people shouldn't be surprised that if the state is in financial trouble, it's going to make its way to municipalities and school boards.
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· Gov. Christstie meets with Press editorial board
Any way of dealing with it would be a dishonest way of dealing with it, and I'm here to fix it for the long run. I understand that in the short run, I'm going to make a lot of people angry with me, but I can't worry about that.
Q: The New Jersey Education Association is very good at whipping up support. Do you have indication their persuasion will not be as effective?
A: (Tuesday), when we passed the most significant pension and benefit reforms we've passed in this state in the last 20 years, with them crowding the hallways. There was a teacher, quoted in the newspaper, saying she took the day off to come and do it, and there was a substitute teacher back there, and she said, "I left a plan; they're not watching videos."
(2 of 6)
These are the people who care about the kids. Listen, it's time to have this fight. They have bullied every political subdivision of this state for decades. No wonder they can. They have a budget of over $134 million a year, by the way, of public money.
All the teachers are paid with taxpayer money, and we deduct for them, by virtue of the Legislature, their dues, which are $750 a year, for 185,000 full-time members. So no wonder they can bully everybody around.
I do think something has changed. They spent millions of dollars to try to defeat me in November. They didn't. They spent millions of dollars to try and defeat the pension and benefit reforms. I signed them (Tuesday). I think momentum is on our side.
Now, I'd like them to be cooperative. I don't want to fight. I don't need to fight, if they're willing to be cooperative. But if they're unwilling to be a participant to fixing this problem, then, you know, we'll bring the game to them.
Q: A bill by Assemblymen Joseph Malone, R-Ocean, and Declan O'Scanlon, R-Monmouth, proposes to freeze all government salaries for three years. How do you feel about that?
A: The non-unionized workers in state government haven't had a raise since 2005, and they're not getting a raise next year. We're happy to continue that program. You know that the CWA, AFSCME and other state workers, some of them are getting an 11 percent salary increase in fiscal 2011 because of the deal Gov. Corzine made with them.
I just think it's time for us to say there can't be two classes of people in New Jersey, public employees who receive rich benefits and members of the public who pay for them.
Q: You have noted that public employment has consistently risen while private employment has fallen. In fact, in the aggregate, the numbers show that private sector has scarcely produced jobs in 10 years. What will be the most important thing you will do this year to get the private sector growing again?
A: To show the private sector that taxes are moving down, not up; that regulation is moving down, not up. They don't expect us to fix this in a year. It's been building for 10. So what we need to do is when the Legislature pressures me to raise taxes, I need to say no to them. So when the corporate business rate surcharge expires on June 30, to let it expire.
(3 of 6)
Q: Is there one thing that will help right now?
A: Yes, the tax rates going the other direction. Because then they'll have some sense that there's an administration here that cares about moving tax rates in the other direction and not always going into the pocket of business, both small and large, to fix whatever problem we have.
Q: When you talk about shared sacrifice, is business going to be part of that?
A: Sure. We have tripled the (limited liability company) registration fees in this budget. We've frozen the (Business Employment Incentive Program) grants. We've frozen one other of our economic incentive programs, at last year's levels. These were all programs that were due to rise, and businesses were counting on. We have agreements with these businesses. But they will share in the sacrifice and continue to pay the highest taxes in America.
Q: Budget and pension experts say that the reforms passed yesterday will not be nearly enough to address the unfunded liability faced by the state pension system, and that's not to mention the unfunded health benefits costs. What other reforms do you envision?
A: We have to revoke the 9 percent increase (adopted in 2001) for current employees, not just for future employees, like we did (on Tuesday). I think we need to go towards a greater share towards health benefits. I think we need to look at, and adopt as we move forward, an examination as to whether the (annual cost of living increases) are sustainable over the long haul.
We need to bend the benefit curve. Remember something. There has been a lot of discussion by the public sector unions that the state has not made to the pension system, and that is true. But if the state had made all of its contributions, as actuarially required over the last 10 years, the funding of the pensions would be at 74 percent. Today, they are at 64 percent. It would only make a 10 percent difference. Now that's not to minimize that 10 percent. What it tells you is that the performance of the market has hurt, and also, the benefits have been rising at three times the rate of inflation. So we need to bend the benefit curve as well if we're going to bring the $46 billion gap into balance. We need to consider other options.
(4 of 6)
Q: You've talked a lot about the teachers union. Are the police another area that needs to be looked at in terms of municipal cost?
A: Sure. That's why the (proposed) 2.5 percent cap (on annual local spending) is so important. We've also talked about modifications to the interest arbitration system and civil service reform all play into the police and fire situation as well.
I believe in interest arbitration, and I believe that public employees who can not strike should have binding arbitration available to them or they'll have no leverage to be able to negotiate with a municipality. However, we need to make binding arbitration more realistic. If there's a cap in place, the arbitrator has to respect the cap. They must also consider what the impact on property taxes will be or their particular award. Those are things now that are not considered and those are changes I'm going to propose to the arbitration system, in addition to the pension and benefit reforms, because they also apply to police and fire.
Q: Should there be a model, standardized contract for school district superintendents and administrators?
A: Yes. I'd want to be sure that we wrote it well and wrote it in what that left some flexibility for school boards to be able to adjust some terms of the contract depending on the needs of the district. But in general, yes. Certainly on the issues of compensation, severance packages, incentive bonuses, perks, there should be a standardized way of going about that. And candidly, I don't know why any school superintendent in New Jersey makes more than the governor, and there's plenty who do.
I understand and respect the fact that being a superintendent of schools is a challenging job. But I can't imagine it's any more challenging than mine, and I wonder why anyone is making more than $175,000 a year as a school superintendent, and you know there are plenty making well in excess of that.
Q: A bill by Assemblymen Joseph Malone, R-Ocean, and Declan O'Scanlon, R-Monmouth, proposes to freeze all government salaries for three years. How do you feel about that?
(5 of 6)
A: The non-unionized workers in state government haven't had a raise since 2005, and they're not getting a raise next year. We're happy to continue that program. You know that the CWA, AFSCME and other state workers, some of them are getting an 11 percent salary increase in fiscal 2011 because of the deal Gov. Corzine made with them.
Q: You have noted that public employment has consistently risen while private employment has fallen. In fact, in the aggregate, the numbers show that private sector has scarcely produced jobs in 10 years. What will be the most important thing you will do this year to get the private sector growing again?
A: To show the private sector that taxes are moving down, not up; that regulation is moving down, not up. They don't expect us to fix this in a year. It's been building for 10. So what we need to do is when the Legislature pressures me to raise taxes, I need to say no to them. So when the corporate business rate surcharge expires on June 30, to let it expire.
Q: Is there one thing that will help right now?
A: Yes, the tax rates going the other direction. Because then they'll have some sense that there's an administration here that cares about moving tax rates in the other direction and not always going into the pocket of business, both small and large, to fix whatever problem we have.
Q: When you talk about shared sacrifice, is business going to be part of that?
A: Sure. We have tripled the (limited liability company) registration fees in this budget. We've frozen the (Business Employment Incentive Program) grants. We've frozen one other of our economic incentive programs, at last year's levels. These were all programs that were due to rise, and businesses were counting on. We have agreements with these businesses. But they will share in the sacrifice and continue to pay the highest taxes in America.
(6 of 6)
Q: Budget and pension experts say that the reforms passed yesterday will not be nearly enough to address the unfunded liability faced by the state pension system, and that's not to mention the unfunded health benefits costs. What other reforms do you envision?
We need to bend the benefit curve. Remember something. There has been a lot of discussion by the public sector unions that the state has not made to the pension system, and that is true. But if the state had made all of its contributions, as actuarially required over the last 10 years, the funding of the pensions would be at 74 percent. Today, they are at 64 percent. It would only make a 10 percent difference. Now that's not to minimize that 10 percent. What it tells you is that the performance of the market has hurt, and also, the benefits have been rising at three times the rate of inflation. So we need to bend the benefit curve as well if we're going to bring the $46 billion gap into balance. We need to consider other options.
Q: You've talked a lot about the teachers union. Are the police another area that needs to be looked at in terms of municipal cost?
A: Sure. That's why the (proposed) 2.5 percent cap (on annual local spending) is so important. We've also talked about modifications to the interest arbitration system and civil service reform all play into the police and fire situation as well.
I believe in interest arbitration, and I believe that public employees who can not strike should have binding arbitration available to them or they'll have no leverage to be able to negotiate with a municipality. However, we need to make binding arbitration more realistic. If there's a cap in place, the arbitrator has to respect the cap. They must also consider what the impact on property taxes will be or their particular award. Those are things now that are not considered and those are changes I'm going to propose to the arbitration system, in addition to the pension and benefit reforms, because they also apply to police and fire.
Q: Should there be a model, standardized contract for school district superintendents and administrators?
A: Yes. I'd want to be sure that we wrote it well and wrote it in what that left some flexibility for school boards to be able to adjust some terms of the contract depending on the needs of the district. But in general, yes. Certainly on the issues of compensation, severance packages, incentive bonuses, perks, there should be a standardized way of going about that. And candidly, I don't know why any school superintendent in New Jersey makes more than the governor, and there's plenty who do.
I understand and respect the fact that being a superintendent of schools is a challenging job. But I can't imagine it's any more challenging than mine, and I wonder why anyone is making more than $175,000 a year as a school superintendent, and you know there are plenty making well in excess of that.
Phila Inquirer - Budget fight looms over tax on rich…
Critics assail Christie's plan not to renew surcharge on incomes of $400,000 or more.
By Jonathan Tamari
Inquirer Trenton Bureau
Gov. Christie has said his budget calls for shared sacrifice, but liberal critics and some Democrats say one group is getting off easy: the rich.
Christie, who came to office promising to rein in New Jersey's free-spending ways, has refused to renew an income-tax surcharge on people earning $400,000 and more, saying residents are already overtaxed.
At the same time, his critics say a rental-assistance program for the poor is being cut, the developmentally disabled are being asked to pay more for their care, NJ Transit fares are rising by 25 percent, and the state is trimming its Earned Income Tax Credit, effectively handing the working poor a $45 million tax increase.
Democrats last week said they would not let that situation stand.
"Everyone's going to pay more, and the only people that got a break are the higher-income people," Senate President Stephen Sweeney (D., Gloucester) said at a meeting Thursday with The Inquirer editorial board.
Sweeney and Assembly Speaker Sheila Oliver (D., Essex), said the Democratic-controlled Legislature would not approve a spending plan without reinstating the tax surcharge that was imposed in 2009. The higher rates could bring in $800 million to $1 billion to offset some of the governor's spending cuts.
Christie has said he would veto that tax increase.
With Democrats offering little resistance in other areas, the fight over this piece of the budget is shaping up as the most obvious flash point in Christie's first attempt to put his stamp on state spending.
"He's drawn a line in the sand, and I've got to be honest with you: We're not going to get run over on this," Sweeney said. He later added, "We could have that fight tomorrow, because he knows where we stand with it, I know where he stands with it."
Raising taxes would be "insane," Christie said in his March 16 budget speech. He said New Jerseyans were already the most highly taxed citizens in the nation.
"Ladies and gentlemen, I was not sent here to approve tax increases. I was sent here to veto them," Christie told the Legislature in his speech.
Former Gov. Jon S. Corzine imposed the tax last year, saying it was a one-year fix during a historic decline in state revenue. He created three tax brackets on incomes of $400,000 and more, including a top rate of 10.75 percent on earnings of more than $1 million, among the highest marginal rates in the nation.
The tax expired at the end of 2009.
Higher earners paid more last year and will see greater savings in 2010.
A couple with $450,000 in taxable income, for example, would save $815 because of the tax change. A couple that made $1.5 million would pay $16,930 less than last year.
By contrast, low- to moderate-income families would pay an added $92, on average, because of Christie's planned cuts to the state's Earned Income Tax Credit. The credits would fall to $368, on average, from $460.
Those who received property-tax rebates last year are also taking a hit from budget cuts. Senior citizen homeowners with incomes of $150,000 and less, and other homeowners who earned $75,000 or less, will lose their property-tax rebates for 2010. That means going without checks averaging between $670 and $1,300.
The New Jersey School Boards Association, Rutgers University teachers, public-employee labor unions and Better Choices for New Jersey, a coalition of unions, churches and liberal groups, have all called for reinstating the tax.
"What we are saying is that everybody should share the sacrifice," said Mary Forsberg, interim president of New Jersey Policy Perspective, a left-leaning interest group.
A restored tax increase would affect about 1.4 percent of New Jersey's income-tax filers. But more than just wealthy individuals would pay more, according to the Christie administration. Some businesses pay the income, not corporate, tax.
In 2008 there were 4.6 million New Jersey income-tax returns filed, and 63,480 had income of $400,000 and more. Of those, an estimated 35,921 had some small-business income, according to the Treasury department.
Republicans have also argued that taxes are simply too high.
"Taxing has not cured the addiction New Jersey has had to spending," said Assembly Republican Budget Officer Joseph Malone (R., Burlington). "The cure has to be the shrinking of government."
Not all Democrats agree with reinstating the tax, either. Assembly Budget Chairman Louis Greenwald (D., Camden) said he would like sales and income taxes cut. In their place, he said, the state should consider allowing municipalities to impose taxes, such as local income taxes or taxes on hotel stays and restaurant meals.
As budget chairman, Greenwald has a key role in crafting the budget. Oliver, however, is the top lawmaker in the Assembly, and her district provides a broad perspective on the debate.
The towns she represents vary from blue-collar Clifton to urban East Orange to Glen Ridge, a wealthy suburb.
Those who earn more than $400,000 have told her that they feel "fortunate" and that increasing the tax "is not going to necessarily, demonstrably change their lifestyle and their quality of life, but their concern is just that the money is put to good use."
She added, "They see the downside of not having that tax."
Democrats, who controlled the governor's office until January and still hold the Legislature, could have re-authorized the tax surcharge at any time, said Christie spokesman Michael Drewniak. He questioned lawmakers' motivations for raising the issue now.
"If it's that important, and if they saw the looming crisis that we had here, they should have used their full advantage of controlling both the governorship and both houses of the Legislature and extended the tax," Drewniak said.
Sweeney said he did not relish raising a tax and would want to do it for one year, provided the economy picks up by the next budget.
He said Democrats would insist on reinstating the tax rates, even if it meant a government shutdown.
"There's some things you have to stand on principle on, and this is one of them," Sweeney said.
That leaves the top officials in each party headed toward a face-off by June 30, the day a new budget must be signed.
Christie "shouldn't have gone out and said, 'Dead on arrival,' because that put me in a box," Sweeney said. "I'm saying it just came back to life, so what are we going to do?"
Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.
3-27-10 Phila Inquirer - N.J. releases annual guide on school spending
The New Jersey Department of Education released its annual Comparative Spending Guide yesterday in advance of the many public budget hearings to be held next week in school districts statewide.
The guide provides district-by-district per-pupil spending according to 2009-10 budgets. In addition to total outlay per pupil, spending is broken down into categories such as classroom instruction, teacher salaries and benefits, and administrative costs.
The average cost per pupil statewide was $13,835, up 4.3 percent from the 2008-09 budget. Classroom instruction averaged $8,113 per student, a 3.6 percent increase.
The guide is available online at http://www.state.nj.us/education/guide/2010/. - Rita Giordano
