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6-25-14 In the News - State Budget FY '15; Education
Star Ledger -NJ budget clears first hurdles in Legislature, with $1 billion in tax hicke Star-Ledger staff writers Susan K. Livio and Brent Johnson contributed to this report.

Politickernj - Sources: Prieto prevails over Cryan, others in backroom Assembly budget debate.

NJ Spotlight - Camden-Specific Bill Would Extend Renaissance School Deadline...Singleton's measure would add year to Urban Hope Act, set up early retirement for Camden's hard-pressed teachers

Star Ledger -NJ budget clears first hurdles in Legislature, with $1 billion in tax hicke

By Salvador Rizzo/The Star-Ledger The Star-Ledger
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on June 25, 2014 at 6:00 AM, updated June 25, 2014 at 8:35 AM

Trenton - State lawmakers on the budget committees of the Assembly and Senate last night approved a new $34.1 billion budget that relies on hefty tax increases on New Jersey businesses and millionaires.

The Democratic budget plan, designed by Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto, would make the full pension payment required by law for New Jersey’s strapped pension system in the fiscal year that begins Monday.

In the usual June budget ritual in Trenton, lawmakers met late into the night. Both budget panels approved the spending plan in party-line votes just after 11 p.m.

Faced with a $1.7 billion revenue shortfall, Gov. Chris Christie proposed cutting the pension contribution from $2.25 billion to $681 million. Shrinking the payment would hurt state workers’ retirement funds, Christie said, but it was better than the alternatives: cutting funds for schools and hospitals or raising taxes.

The Republican governor, who is also facing a court battle today over his pension move, is expected to veto the tax increases, saying he would "not raise taxes on the people of New Jersey to pay for a bloated, broken pension system." Christie also has the power to reduce any pension payment Democrats include in the budget.

Both budget committees split along party lines before approving the tax increases Tuesday, with Democrats arguing the state must make the full pension contribution required by law or risk a series of downgrades from Wall Street credit-rating agencies and years of even sharper fiscal pain than the state faces today.

Shorting the pension payment by $2.4 billion over two years, as Christie wants, would cost $4.2 billion over five years. The retirement system already faces $38 billion in unfunded liabilities, according to the administration.

"I don’t want these taxes, and I don’t know one Democrat who does. But what is our alternative?" said Assemblyman Gary Schaer (D-Passaic), chairman of the Assembly Budget Committee. "The alternative is one I’m not particularly pleased with."

"We have an obligation to make those payments," said Sen. Paul Sarlo (D-Bergen), chairman of the Senate panel. "Nobody, nobody takes any pride or any pleasure on voting for something like this."

Legislation sponsored by Prieto (D-Hudson) would raise the marginal tax rate on income above $1 million from the current 8.97 percent to 10.75 percent. The tax increase would expire after three years.

A separate proposal sponsored by Assemblyman John Burzichelli (D-Gloucester) that would raise the corporate business tax rate from 9 percent to 10.35 percent would expire after one year.

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"We’re raising taxes by roughly $1.1 billion, and I think we are well aware of the governor’s opposition," said state Sen. Jennifer Beck (R-Monmouth). "So this budget is founded by two revenue streams that we know are going to be rejected by the executive branch, and I think that’s cause for concern."

Earlier in the day, Republican lawmakers and two of the state’s largest business groups said the tax increases would stifle New Jersey’s slow-growing economy. "These tax increases make this a much more difficult place to live, to work, to raise a family," said Senate Minority Leader Thomas Kean Jr. (R-Union).

Republican lawmakers and Sen. Jeff Van Drew (D-Cape May) all voted against the raising the business tax. The millionaires' tax got straight party-line votes in both panels. Final passage for the budget and tax bills is expected Thursday in both houses.

"It's always fast and furious."

Prieto said cutting the pension payment would be fiscally irresponsible, since the pension system’s unfunded liabilities would multiply over the next few budgets. Raising taxes for three years "is the most sound" option, he said.

Assemblyman Declan O’Scanlon (R-Monmouth) has proposed reducing funding for low-income school districts as a way to save enough money to pay New Jersey’s rapidly escalating bills. In the meantime, cutting the pension system is the only feasible option, he said. "The governor’s prescription is the right one right now," O’Scanlon said.

Christie himself had proposed raising some new, smaller taxes and fees. But Republicans in the Senate oppose the governor on those moves and abstained from approving them Tuesday. They still passed with Democratic support.

Democratic lawmakers and Christie administration officials were still in negotiating mode over some of the budget’s finer details late into the day. "It’s what I always say: This is June in Trenton," said Prieto. "It’s always fast and furious."

Star-Ledger staff writers Susan K. Livio and Brent Johnson contributed to this report.

 

 

Politickernj - Sources: Prieto prevails over Cryan, others in backroom Assembly budget debate

 

By Max Pizarro | June 24th, 2014 - 10:54am

 

TRENTON – The optics created more than a few grunts of discontent.

There was Gov. Chris Christie shagging softballs with Boomer Esiason while members of the Democratic caucus once again found themselves crammed into a chamber feeling gamed.

There were jokes about the governor circulating through the caucus room, as members tried to buck one another’s spirits with cracks about Christie’s middle-aged audacity to suit up like a kid in a Matt Christopher novel while the state gets shutout by a budget crisis.

But ultimately a very grim political mood prevailed, as Democrats anticipated the governor having it in him to hang up the cleats and come back insisting – with red pen in hand – that he alone – not those members of a tax-raising Dem caucus - is the adult in the room.

Following a backroom agreement by Senate President Steve Sweeney (D-3) and Assembly Speaker Vincent Prieto (D-32), Democrats today will pass a single budget plan out of the senate and assembly committees that would raise the marginal tax raised from 8.97 to 10.75%, the corporate tax rate from 9 to 10.35% and impose multiple new fees.

The governor has his own plan to close a budget gap by stripping $2.4 billion out of the state pension system, putting him on a collision course with Sweeney and Prieto, who prefer the targeted tax hike option.

While Christie swung for the fences in Yankee Stadium, he enlisted Assembly Minority Leader Jon Bramnick (R-21) to take the bat out on the Dems’ proposal back at the N.J. Statehouse. "No more taxes,” Bramnick said. “Not now. Not $1.6 billion. [The Democrats] are raising the price of living in New Jersey, and are playing to a specific constituency, not to the average taxpayer.

In the caucus room, Assemblyman Joe Cryan (D-20) and others tried to persuade his fellow Democrats not to fall prey to Christie’s politics, sources told PolitickerNJ.

In a backroom debate yesterday, the former assembly majority leader asked his colleagues to consider across-the-board cuts at roughly 4%.

That sparked some back and forth.

Cryan’s considerations stem in part from an unwillingness to enable Christie to play the part of belt-tightening budget paladin back from the dugout to lecture everyone on fiscal restraint.

Assemblyman Gary Schaer (D-36) sided with Speaker Vincent Prieto (D-32), who said there’s “stuff in the budget we cannot touch,” according to sources in the room.

The recommendation of “across-the-board cuts” sounds good, but would mean turning out the lights in certain segments of state government – and job layoffs, sources say.

It would also mean significant reductions to higher education and charity care funding, which in part form the cornerstone of budget priorities surmised by the South Jersey Democratic machine ultimately in control of the party.

Higher ed. cuts would hurt building trades labor, one of the prime organizing principles behind South Jersey.

Charity care would bruise Camden’s Cooper Hospital.

Safeguarding those items and others take priority over the consequences of cuts, which Cryan and some others at least argued would project sufficient chutzpah to nullify Christie’s attempt to make Democrats look fiscally irresponsible with the millionaires’ and corporate tax hike proposals.

In the process, they unify Republicans behind Christie - movement conservatives like Assemblyman Jay Webber (R-26) among them - and give a pedestal to a governor not only swinging a bat at softballs – but increasingly at those damning storylines like the one in the New York Times this morning concerning ongoing investigations into the Port Authority of New York and New Jersey.

“There’s no doubt he [Christie] is masterful at the political fight,” one caucus source acknowledged to PolitickerNJ, noting a fascinating occurrence.

Christie presented his budget, then new numbers came in showing a tax revenue shortfall on this governor’s watch.

The governor identified the pension system as the place to find the money, reversing himself on a deal he struck with Sweeney three years ago but finding his base favorite narrative in the process, which the Democrats appear willing to bolster.

“We have lost a sense of what this conversation is,” a source said. “We are substituting a conversation about meeting our obligations and needs with the rhetoric of taxes versus no taxes.”

Bad for the state?

Yes, the source said.

But politically, the source said, it’s a Christie homerun.

 

NJ Spotlight - Camden-Specific Bill Would Extend Renaissance School Deadline

John Mooney | June 25, 2014

Singleton's measure would add year to Urban Hope Act, set up early retirement for Camden's hard-pressed teachers

With the clock running out on new school proposals under the Urban Hope Act, a late-session bill has been filed that would extend the controversial law’s application deadline another year -- specifically in Camden.

State Assemblyman Troy Singleton (D-Burlington) this week filed the bill in the Assembly that would allow for new proposals for so-called renaissance schools to be filed by January 2016.

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The deadline under the existing law is January 2015, but the extensive solicitation and application process had all but ruled out any new proposals at this point.

Singleton last night said he heard there were a “few other applications in the queue” for Camden, and he didn’t want to preclude them from at least applying. He did not identify where those proposals would come from.

“I don’t know the specifics, but I know there is a lot of interest,” he said.

The Urban Hope Act law, enacted in 2011, creates renaissance schools -- a hybrid of charters and district schools -- and opened the way for three large charter school networks to win at least preliminary approval for up to 15 new schools in Camden over the next several years.

The law encompasses Trenton and Newark as well, but no proposals were ever made to those cities.

The latest bill, sponsored by Singleton and state Sen. James Beach (D-Camden) in the Senate, only includes Camden and would not extend the deadline for Trenton and Newark. Singleton said that given neither of those cities’ school boards had even solicited bids up to now, there was no reason to extend the deadline for them as well.

The original law was always aimed at Camden and was pushed by South Jersey businessman and Democratic powerbroker George Norcross. Norcross’s brother, state Sen. Donald Norcross (D-Camden), was its chief sponsor in the Senate. George Norcross is a prominent backer of the first school to be opened in the shadows of the downtown Cooper Health complex, where he is chairman of the board.

Fast-tracked for possible vote as earlier as Thursday, the Singleton bill also includes a number of provisions that would address concerns that have arisen over the projects approved under the current law.

For instance, the bill would allow new schools to be housed in existing or temporary facilities for up to three years, a change from the law that required that new schools be built.

In Camden, the one approved project for the KIPP Cooper Norcross Academy was starting its first school in temporary quarters, and two other projects with preliminary approval sought to move into existing district schools for at least a year.

Critics had contended that moving into district schools violated the law’s emphasis on newly constructed facilities.

Under the bill, organizations housed in existing buildings would still need to make major renovations, and would not receive the same level of funding as those in new buildings. Still, they would be exempt from the same facilities regulations required of district schools, except in the case of health, safety and handicapped access.

“We want to make sure the expansion of facilities still happens, and if there are temporary facilities they are temporary,” Singleton said. “But as they get up to speed, we don’t want to see it stifled.”

The bill separately adds a provision that would not effect the charter organizations at all, but the Camden district itself under the new leadership of state-appointed superintendent Paymon Rouhanifard.

The bill would enact an early retirement system for Camden school employees, potentially easing the impact of more than 300 layoffs planned by Rouhanifard for next year.

Singleton said he was “taken aback” by the number of layoffs in the city. “We thought this would at least soften the blow for some of them, for those who have committed a number of years to the children of Camden,” he said.

The bill was taken up in late-night committee hearings last night, with the Senate budget committee backing the measure along mostly party lines. The Assembly budget committee is also expected to endorse the bill.