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Star Ledger - N.J. to receive $913M more in tax revenue than expected
Wall Street Journal - N.J. Tax Windfall Could Reignite Fight Over School Funding
Stile: Christie careful not to create more controversy, won't discuss 'creationism'
Press of Atlantic City - State to delay June aid payments, forcing some school districts to take loans to pay bills
Star Ledger - N.J. to receive $913M more in tax revenue than expected
By Jarrett Renshaw/Statehouse Bureau Updated: Tues, May 17, 2011, 8:32 AM
The Star-LedgerTRENTON — New Jersey is projected to take in $913 million more than expected in tax revenue through June 2012, according to new projections by the nonpartisan Office of Legislative Services.
The revised estimate will likely spark a partisan battle over how to spend the unexpected windfall as lawmakers consider Gov. Chris Christie’s proposed $29.4 billion budget.
OLS will be present the figures today to the Assembly Budget Committee, according to two sources familiar with the report who requested anonymity because they were not authorized to discuss it. State Treasurer Andrew P. Sidamon-Eristoff is also expected to give the committee the administration’s revenue estimates. A Treasury spokesman declined to comment today.
The surge will come from an unexpected increase in income tax revenue, according to a section of the OLS report obtained by The Star-Ledger. All other taxes were below administration estimates for the 14-month period, according to the report.
The new numbers will be announced as the state Supreme Court is considering whether Gov. Chris Christie and lawmakers need to provide up to $1.7 billion more in school funding.
INCOME TAX BOOSTING REVENUE:
Higher-than-expected income tax revenue is expected to boost the state budget by more than $913 million over the next 14 months, covering the rest of the fiscal year that ends June 30 as well as the one that begins July 1, according to a report to be released Tuesday by the Office of Legislative Services. Other taxes are expected to come in a bit lower than anticipated. Here’s how the latest projections would break out, compared with projections made in February:
• Income tax: up $633.9 million this fiscal year; up $811.7 million next year.
• Sales tax: up $11.1 million this fiscal year; down $21.2 million next year.
• Corporation business tax: down $190.1 million this fiscal year; down $252.5 million next year.
• Other Revenue: down $25.3 million this fiscal year; down $54.2 million next year.
Source: Section of OLS document obtained by The Star-Ledger
The news will likely change the tone of the budget debate underway in Trenton that has up to this point largely focused on modest restoration to cuts in programs.
"The governor has balanced his budgets on the backs of the middle class, now this gives us an opportunity to undo that," said state Sen. Paul Sarlo, who as head of the Senate Budget Committee reviewed the OLS estimates.
Sarlo (D-Bergen) said he will push the administration to use the money for additional property tax relief and funding to schools, but stopped short of saying Democrats will offer their own budget proposal.
Assembly Budget Committee Chairman Lou Greenwald (D-Camden) said the money should be used to "restore some of the pain" Christie has caused with his budget cuts.
Christie spokesman Michael Drewniak said officials need to approach any good news prudently.
"While New Jersey is seeing signs of economic recovery, it is important to keep moving forward on a sound fiscal path and not revert back to Trenton’s out of control spending ways at the first sign of growth," Drewniak said.
Last year, Christie cut nearly $820 million in state aid to local school district and overall spent about $1.6 billion less than the school funding formula passed in 2008 requires, sparking the case that is now in the hands of the Supreme Court.
In his budget introduced in February, Christie called for restoring about $250 million to local school districts. He has also called for no increases in municipal aid and property tax rebates.
The OLS predicts the state will finish the fiscal year that ends June 30 with $683.9 million more than expected in income tax revenue, though business taxes will fall short by $190.1 million than expected.
In the fiscal year that begins July 1, income tax revenue will increase by $817 million more than expected, while businesses taxes will fall short by $252 million, according to the OLS report.
"It's a sign that that the national economy is rebounding," said Greenwald. "But we still lag in job growth, and I hope the governor uses this as an opportunity to invest in the economy."
© 2011 NJ.com. All rights reserved.
Wall Street Journal - N.J. Tax Windfall Could Reignite Fight Over School Funding
Top of Form
By Lisa Fleisher
A new legislative projection says New Jersey will rake in $914 million more than expected in taxes through June 2012, which will likely set off a fierce partisan fight over how to spend the money.
The windfall, estimated by the nonpartisan Office of Legislative Services, comes on the cusp of a state Supreme Court decision on school funding and could provide more than half of the $1.7 billion needed to fully fund New Jersey schools in the coming budget year.
The governor’s budget, which must be passed by June 30, hinges on the outcome of the court case. An advocate for poor, urban students sued Christie, saying his education spending cuts denied students of the free “thorough and efficient” education required by the state constitution.
The state Treasurer will present his own economic estimates at a budget hearing Tuesday, though it’s not clear whether those figures will match the OLS’s. However, the two parties have not been far off from each other of late.
Democrats could insist that Christie put $7.5 million back into funding for family planning clinics such as Planned Parenthood, which saw funding cuts in the current budget. The governor, who is pro-life, says he made the cuts because the spending ans services were duplicated elsewhere, but Democrats and women’s health advocates say the move has caused clinics to close.
But the main fight over any additional money is likely to concern education funding.
In his first year, Christie cut nearly $820 million in state aid to local school districts and overall spent $1.6 billion less than what a state formula requires for schools. This year, he’s proposed restoring about $250 million to local districts. Still, the $10.2 billion that Christie proposes spending for the 2011-12 school year is about $1.7 billion less than called for by a state formula, which was developed under former Gov. Jon Corzine and approved by the state Supreme Court. Christie has said he wants to redo the formula.
“The fiscal situation of the state overall has helped the governor … sell his budget to a public that isn’t necessarily willing to accept it, but feels it’s a necessity,” said Patrick Murray, poll director at Monmouth University. “It muted some of the public outcry against some of the specific cuts.”
It’s unclear how this will affect the pending Supreme Court decision. The court heard oral arguments in April, and some political experts said it could sway the court.
“This could lend itself to influence the Supreme Court, which could say, ‘Ah-ha, there is money available,’” said Joseph Marbach, provost of La Salle Univeristy in Pennsylvania and former dean of Seton Hall University in New Jersey.
The legislative office now predicts the state will finish the year this June with $633.9 million more in income taxes than the governor projected when he proposed his budget in February — though it says the state will fall $190.1 million short in corporate tax revenues. The office also predicts the state will collect an extra $811.7 million more in income tax in the fiscal year that starts July 1, but $252.5 million less in corporate taxes.
Stile: Christie careful not to create more controversy, won't discuss 'creationism'
Tuesday, May 17, 2011
Last updated: Tuesday May 17, 2011, 6:49 AM
By CHARLES STILE
COLUMNIST
Governor Christie rudely slammed shut any discussion of "creationism'' during a news conference in Jersey City last week.
NJ Gov. Chris Christie
But in doing so, he kept the door open to a political future in Iowa.
A reporter asking Christie whether he believed in creationism or evolution was cut off with a "none of your business" reply. "That's my personal view," he said as a startled audience, comprised mostly of St. Anthony's High School athletes, pivoted their heads in a quick swoosh of disbelief at the questioner. They came to hear Christie's ceremonial remarks, but they got to watch him dish out a humiliating diss instead.
But the Blunt One, whose views on the very personal issue of abortion are well-known — he's a former pro-choice Republican who was converted to the pro-life cause by the birth of his daughter. And his opposition to legalizing gay marriage is documented. But Christie declared creationism an off-limits topic. So now we are left to guess whether Christie believes that dinosaurs roamed the Earth 100 million years ago or 10,000 years ago when Noah was rounding up his heroic menagerie as some creationists believe.
The exchange came a little more than a week after the issue surfaced at one of Christie's unscripted town hall meetings in Monmouth County. When a woman asked him if he thought creationism should be taught alongside evolution, Christie punted. That's an issue that should be decided at the local level by parents and school boards, he said.
"I probably have little business getting myself involved in these kinds of questions," he said. "I think it's really a dangerous area for a governor who stands up from the top of the state to say you should teach this, you shouldn't teach that."
Technically, he's correct. School boards can include creationism as part of the curriculum as long as it doesn't replace evolution. He left out one important distinction — it's never happened in New Jersey, according to state education and school board association officials. And there is a good reason for that. New Jersey parents send their kids to school to learn science. Evolution is well-documented science. Creationism is theology dressed up as science.
Yet, political analysts say Christie's determined no-comment neutrality on the issue has an intelligent political design to it. It's a position that plays well in Iowa, where social conservatives and self-described evangelicals dominate the first-in-the-nation Republican caucuses in the 2012 presidential contest. While Christie might be out of step on his home turf, he's on safe territory in Iowa. His position doesn't necessarily win him an automatic blessing from the religious right, but it doesn't rankle them, either.
"It's the pragmatic thing to do," said Steffen Schmidt, a political scientist from Iowa State University. It allows Christie to take a local control posture on education, which is popular with Iowans, without having to publicly explain his own views on the subject. It placates the conservative bloc without branding him as a hard-liner, which could make him less palatable in a general election contest.
"It's a perfect way for him to essentially disarm the issue," Schmidt said.
Creationist theory falls way down the list below abortion and gay marriage as hot-button priorities for social conservatives in Iowa. Still, it is one of those litmus-test issues conservatives use to test a candidates consistency. And in Iowa, nearly 60 percent of the Republicans who attended the 2008 caucuses described themselves as born-again or evangelical Christians, according to exit polls at the time. Their turnout propelled former Arkansas Gov. Mike Huckabee to a stunning victory that year. Huckabee announced Saturday that he was bowing out of next year's race.
Demurring on creationism suggests Christie is sending a signal to Iowa Republican activists — including the delegation with ties to Gov. Terry Branstad that is traveling to New Jersey later this month with hopes of wooing Christie into the contest — that he's weighing a possible run, says Wayne Moyer, a political analyst at Grinnell College in Iowa. And while Christie's sidestepping may not make him an instant hero with Iowa's social conservatives, he'll at least be welcomed and given serious consideration. The Branstad-delegation's visit is a sign that the Iowa GOP is not happy with Mitt Romney, Michele Bachmann, Rand Paul or any highly touted candidates with stronger social conservative bona fides.
"They also want a winner, even if he is not the most conservative person," Moyer aid. "He would still have a substantial chance."
Let's remember, Christie says he has no intention of running for president. He's staying here where he's the most conservative governor in state history, a distinction that makes him a marketable candidate in Iowa. E-mail: stile@northjersey.com
Press of Atlantic City - State to delay June aid payments, forcing some school districts to take loans to pay bills
By DIANE D’AMICO Education WriterpressofAtlanticCity.com | Updated: 6:30 am, Tue May 17, 2011. | 0 comments
The state will again postpone making June school aid payments until July, leaving school districts to determine if they have enough surplus to cover their bills or whether they will have to borrow money.
The bookkeeping tactic, which allows the cash-strapped state to transfer the payments to a new fiscal year, has been standard practice for the past several years, and many districts build a funding cushion into their budget to cover it. But with tighter budgets and smaller surpluses, there is more concern that they may have to borrow this year.
“We’ve never borrowed before, but there is more of a chance that we will have to this year because the budget cuts and the cap have left us with little surplus,” said Jack Pfizenmayer, superintendent of the Lower Cape May Regional School District. “Last year we made it through, but I’m not as sure this year.”
According to information posted on the state Department of Education website, districts will be notified by Thursday of their preliminary delayed payment, with a final accounting by June 2. The payments, equal to about one-tenth of their total state aid, typically would have been made on June 8 and 22.
The state allows districts to take short-term loans to cover any shortfalls, with the state picking up the interest costs.
Both Vineland and Millville, which get the majority of their school budgets from state aid, anticipate having to borrow at least some money. Millville is asking its board to approve borrowing up to $7 million, according to its May meeting agenda. Vineland borrowed $3 million last year and is reviewing what it may need this year, school Business Administrator Kevin Franchetta said.
Franchetta said Vineland typically gets about $14 million per month in state aid, and the 2 percent surplus it is allowed to carry won’t cover an entire month’s costs.
“Two percent won’t even cover our payroll, and I can’t just tell employees they won’t get their June paycheck until July,” he said.
Districts that don’t rely as much on state aid will likely make it through the end of the fiscal year.
“We anticipate this is likely to happen and have enough money set aside,” Galloway Township Business Administrator Vickie Tomasco said.
The state makes aid payments twice a month for 10 months, typically skipping July and August, so the districts do not get additional aid along with the deferred payment. Expenses are much lower in the summer when school is closed.
Hammonton Superintendent C. Dan Blachford said it is still disappointing to have the money bumped each year, since it means they will likely never make up the lost payments.
“We’ll make it through,” he said, “but it’s still disappointing.”
Egg Harbor Township school Business Administrator Kateryna Bechtel, who is also president of the New Jersey School Business Officials, said in an email that the issue was discussed at a county meeting Friday. She said since the loan process is time-consuming, the group decision was to not take out a loan if they can make their June payroll and put off paying some bills until the aid payment comes in July. A state memo said the payment would be made by July 8.
“The state is passing its cash flow problems onto the school districts, and the school districts will pass the cash flow problems onto its vendors,” she said.
She agreed that districts that get most of their budgets from state aid will have a more difficult time, so each should monitor cash flow and do what is necessary.
Contact Diane D'Amico: 609-272-7241
