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PHILADELPHIA INQUIRER, Tue, Dec. 16, 2008 'College-aid programs take a hit in New Jersey'
Courier Post on line N.J. pension deferral plan tabled by critical officials
A15/S1861 Moving School Elections bill, did not get posted for a vote. We are hearing that it is on shakey ground, that there were not enough votes for passage. Also,the Senate President, Richard Codey, excercised his prerogative not to post it for a vote.
Courier Post On Line
December 16, 2008
N.J. pension deferral plan tabled by critical officials
By MICHAEL SYMONS
Gannett State Bureau
Action on a plan to allow local governments to defer $1.35 billion in pension payments will have to wait until at least January, after a handful of Democratic senators, mostly from South Jersey, joined with Republicans in opposing the proposal.
Gov. Jon S. Corzine pitched the pension deferral plan in a speech last month as a strategy to avoid crushing property tax hikes next year. But critics say the idea would further weaken a pension system that already owes nearly twice its current value.
"We have contractual obligations in what we have to meet," said Sen. Jeff Van Drew, D-Cape May. "If we don't do that now, it's going to be even more painful in the future and our children will be paying the price."
"For me personally, it is poor policy," said Senate Majority Leader Stephen M. Sweeney, D-Gloucester. "And it is very important for me to do because I am the majority leader, and I vote for most things that are here."
"This measure would almost certainly force citizens in the future to choose between breaking promises made to public employees or accepting huge taxes and cutbacks in important services," said Senate Minority Leader Thomas Kean Jr., R-Union.
The short-term savings would be an estimated $1.35 billion -- $584 million this coming spring, $509 million in 2010 and $257 million in 2011. But payments would then be higher through 2041 because the unfunded liability would be larger.
If those payments are $60 million a year higher for 30 years, as the state Division of Pensions and Benefits projects, then the total added cost for the pension holiday would approach $500 million.
Corzine said he doesn't like the idea but that the state has few other options to assist local governments. He said there are "substantial prospects for cuts" in aid to municipalities next year and said opponents must prefer property tax increases.
"I assure you that those same people will be griping enormously when we have to balance the budget with across-the-board cuts in municipal aid, and then property taxes rise, and then the state will get blamed for not doing anything," Corzine said. "I think those people who vote against this will have to explain to their taxpayers why their property tax bills are skyrocketing."
It's tough to project how much such a move would save in property taxes next year. Last year, the statewide tax levy rose by $1.2 billion, an average $350 per household. The 2009 deferral of $584 million is nearly half that, which would translate to nearly $170 per household in property taxes. However, layoffs and service cuts would probably defray some of that impact, as governments limit tax hikes and adhere to state caps.
Senate President Richard Codey, D-Essex, the bill's sponsor, said the bill would be discussed with Assembly leaders in an effort to revive it early next year.
The bill would reduce -- by 50 percent in 2009, 40 percent in 2010 and 20 percent in 2011 -- the amount of money local employers would have to put into the pension systems for local public employees, firefighters and police officers.
For those three years, as well as 2012, when full contributions would be required again, the affected contribution payments would be exempt from state-imposed caps on the growth of local spending and property taxes.
Local governments were finally supposed to make full pension contributions in 2009 for the first time since 2004, the last time a deferral was approved.
Unions are pushing for the bill to bar local governments that defer their pension contribution from being able to lay off employees.
Local governments that want to contribute part of their deferred payment could put that money in a special reserve fund managed by the state Division of Investment. Any money invested there, plus any earnings, could only be used for pension contributions.
Alternatively, local governments that want to set aside more than the reduced contribution could put that money in the state's Cash Management Fund or a local interest-bearing account.
Reach Michael Symons at msymons@gannett.com
PHILADELPHI INQUIRER, Tue, Dec. 16, 2008 College-aid programs take a hit in New Jersey By Rita Giordano Inquirer Staff Writer Students will have to work harder to qualify for two popular New Jersey scholarship programs because of legislation passed yesterday in the state Senate and Assembly. > In addition, those in the programs will no longer have full tuition covered at four-year colleges and will be subject to a family income cap of $250,000. > The changes affect the New Jersey Student Tuition Assistance Reward Scholarship programs, better known as NJSTARS and NJSTARS II. The programs have allowed students who met certain academic criteria to attend New Jersey public community colleges and finish at four-year state colleges, both tuition-free. > Under the legislation, which passed the Assembly, 65-10, and the Senate, 33-4, the criteria for aid will be tougher. The measure, which Gov. Corzine is expected to sign, would go into effect next fall. > High school students will have to graduate in the top 15 percent of their class, rather than the current top 20 percent, to qualify for NJSTARS. > Students must also take college-placement tests to prove they are college-ready. Currently, about 30 percent of incoming NJSTARS students require remedial education. With the proposed change, students will have to complete remedial work at their own expense before receiving scholarships. > For NJSTARS students to qualify for NJSTARS II, they must graduate from community college with a 3.25 grade point average, instead of the current 3.0. Rather than free tuition, NJSTARS II students will get $6,000 a year if their average is between 3.25 and 3.49 and $7,000 if it is higher. > There are two exceptions. Current NJSTARS college sophomores can get into NJSTARS II with a 3.0 average, and NJSTARS II who are now juniors will continue tuition-free. > In the spring, Corzine ran into opposition when he proposed cutting the programs by limiting eligibility to students whose families earn no more than $100,000. A 12-member panel of legislators and education officials was appointed to find ways to tighten eligibility and limit growth of the programs, which had grown to about $16 million and about 5,000 students since NJSTARS started with 930 students in 2004. > The committee also sought to ease the burden on the state's senior colleges. Under NJSTARS II, schools receive only $4,100 per student - less than half of their tuition - requiring them to subsidize students they said they might not have otherwise. > Supporters characterized the new legislation as a compromise. > Limiting eligibility to the top 15 percent of a high school's graduating class "is not what anyone would have chosen in better times, but I think it's the best possible solution," said Jane Oates, head of the New Jersey Commission on Higher Education, who noted that the governor wanted an income cap. > Oates, like others involved in the changes, acknowledged that it was not known how much, if any, money would be saved. In a bad economy, Oates said, more people could be drawn to NJSTARS, but "we have to assume [the changes] will at least reduce eligibility." > Jacob Farbman, spokesman for the New Jersey Council of County Colleges, said it was good that the legislature acted before its holiday break. > "Families need to know if this program is going to be available to them because they're making college decisions now," he said. > Jeffrey Maggio, 18, a NJSTARS student at Gloucester County College who hopes to be a math teacher, was pleased the program wasn't cut more. > "Now to get a good job, you have to get an education," said Maggio, whose older sister is also in the program. "It helps out a lot of people." > Maggio, of Deptford, works part time at Wal-Mart; his father is a manager at a trucking company and his mother is a substitute teacher. He said that he would have gone to college no matter what but that without NJSTARS he would have been looking at loans. > Shamira Robinson, 19, of Blackwood, said she would likely take out loans if she moves on to Rowan University under NJSTARS II after graduating from Camden County College. > The daughter of an administrative assistant and an electrician, she said she always wanted to go to college but didn't know how to pay for it. She, too, felt that the cuts could have been worse but wished the eligibility requirements could have stayed the same so more people could benefit. > Said the aspiring Spanish teacher: "I wouldn't be here if it wasn't for STARS." > Contact staff writer Rita Giordano at 856-779-3841 or rgiordano@phillynews.com. | |
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