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GSCS welcomes a stable school construction program, including the addition of $950M for regular operating districts to the $3.9B total awarded in this bill ($2.9B is set aside for the former abbott districts, and $50M for County Vocational Schools). Given that this bill only rolled out in full in the last several days, GSCS also has expressed its concerns to the Administration over how the funding process will work. That process still needs to be spelled out via Commissioner of Education emergency regulations. We look forward to a continuing dialogue with the adminstration as the regulations are designed and developed. Click on More to read articles on yesterday's budget passage...
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UPDATE: NJ Senate approves $32.8 billion budget Monday, June 23, 2008 The Record The State Senate today approved a cost-slashing $32.8 billion budget in the first of several key votes that will also decide whether to borrow $3.9 billion for school construction and to cut taxpayer-paid benefits for government workers and teachers. The Senate vote was 23-17. Earlier today, the Assembly voted 45-34 to OK the spending plan, which will cut funding for, among others, hospitals, municipalities, colleges, property tax rebates and nursing homes, deny a funding boost for nonprofits that care for disabled and extend a utility tax. Gov. Jon S. Corzine and his fellow Democrats who control the Legislature conceded the cuts would be painful but needed amid fiscal woes. "New Jersey is facing an economic emergency that if left alone would very likely bankrupt this state," said Assembly Budget Chairman Lou Greenwald, D-Camden. Corzine has said he supports the budget, but would review it before deciding whether to sign it. "No one should be ecstatic about forced restraints and cutting funds for good programs, but we did the necessary," said Senate Budget Chairwoman Barbara Buono, D-Middlesex. Republicans charged the budget passes costs onto residents battling the nation's highest property taxes. "Republicans will not support a budget that will hurt taxpayers at a time when they are struggling to hold onto their jobs, pay their bills and try to remain calm every time they pull into a gas station," said Assembly Minority Leader Alex DeCroce, R-Morris. Senate Minority Leader Tom Kean Jr. said New Jerseyans are already fighting soaring prices for food and fuel. "This budget does nothing to make our state more affordable," said Kean, R-Union. "Instead, it is guaranteed to add to the already high cost of living." The budget does include $8 million to begin a plan to provide health insurance to more low-income parents and require every child have health insurance. It also calls for offering retirement incentives to 2,000 state workers to save $91 million. That would bring salary savings but increase taxpayer-paid retirement benefits, so legislators will also consider: — Raising the retirement age from 60 to 62 for new workers. — Requiring new government workers and teachers earn $7,500 per year to receive a taxpayer-paid pension. Teachers need now earn $500 and government workers $1,500 annually. — Eliminating Lincoln's Birthday as a state holiday. — Allowing the state to offer incentives to workers not to take taxpayer-paid health insurance. — Prohibiting employees from crediting employment with another state or the federal government toward New Jersey benefits. — Requiring a municipal employee work 20 hours per week to be eligible for public health benefits. "Countering the long-term costs of early retirement with long-term savings gleaned through sensible reform strikes the right balance," said Assembly Speaker Joseph Roberts Jr., D-Camden. Still, government workers and teachers lined Statehouse hallways and lobbied New Jersey lawmakers to oppose the legislation. "We are being made scapegoats," said Joyce Powell, president of the New Jersey Education Association, the state's largest teachers union. The Assembly and Senate votes come after Democrats agreed late Friday to the legislation that would cut the taxpayer-paid benefits. The agreement cleared the way for final votes on the spending bills because several lawmakers linked support for the budget to benefit cuts. The state Constitution requires a budget be adopted by July 1. The plan to borrow $3.9 billion for school construction stems from a 1998 Supreme Court order directing the state to build schools in the poorest school districts. The state initially borrowed $8.6 billion for the program, but spent the money without completing the work and the program stalled amid mismanagement. "This bill would finally provide our children with a safe place to learn and grow," said Sen. Shirley Turner, D-Mercer. The bill would allocate $2.9 billion to the poor districts and $1 billion to all other districts, but Republicans want to ask voters to approve the borrowing, noting Corzine has also backed requiring voters approve borrowing. "This is another example of the taxpayers being told one thing by their elected officials and then state government doing just the opposite," said Assemblywoman Alison Littell McHose, R-Sussex. "We need to stop the borrowing, stop the spending and get our fiscal house in order." Corzine, in backing the borrowing without voter approval, cited the court order and shoddy conditions in urban schools. "It's the right decision constitutionally, it's the right decision morally to protect our children and it's most emphatically the right decision in trying to provide real stimulus for the economy today," Corzine said. Still, legislators were expected to consider Monday a proposal to ask voters in November to amend the state Constitution to require public approval for state borrowing. |
June 24, 2008
Legislature OK's borrow $3.9B to build schools
Asbury Park Press and other Assoc. Press newspapers
By GREGORY J. VOLPE
GANNETT STATE BUREAU
Lawmakers approved plans to borrow $3.9 billion to build new schools without voter approval, then hedged a bit late Monday before agreeing to ask voters in November whether all future borrowing should be approved by public referendum.
"How can we consistently tell the voters that we care about them, that we want to pass this as a constitutional amendment, but hey, when it comes to borrowing another $4 billion over here, don't pay attention to that," Assemblyman Richard Merkt, R-Morris, asked.
"Are we so afraid of the voters that we're going to say, "In the future, but not now?"' Sen. Robert Singer, R-Ocean, said.
The dichotomy unfolded after Gov. Jon S. Corzine earlier this year blamed the state's dismal fiscal condition on irresponsible borrowing. He demanded that voters approve all future debt that doesn't have a dedicated revenue source. He then told the state Supreme Court he would pursue legislation to borrow $2.5 billion, offset by the state's income tax revenue, to meet the state's obligation to build schools in the poorest districts.
Senate Democrats recessed their voting session and met in private Friday night to decide whether to proceed with the constitutional amendment to restrict future borrowing. After a short delay, the Senate voted 29-0 to put the question before voters.
"There are some legislators who feel this is unduly restricting our ability to get things done in the future like school construction," sponsor Sen. Raymond Lesniak, D-Union, said. "But at some point in time we have to say, "Look, we know these things are important, but it's equally important for us to go to the public and make our case."'
Others cited the mixed message of voting for borrowing without public consent, then restricting the practice. Ten senators present for the session didn't cast a vote for or against the measure.
"My feeling was I already voted for the bond issue on school construction," said Sen. Nicholas Sacco, D-Hudson, an assistant schools superintendent in North Bergen. "On the same day? I just didn't feel it was the right thing to do at this moment."
The Assembly, which was deadlocked for hours on a pension bill, voted late Monday 61-15 with two abstentions, to place the question on November's ballot.
Some supporters have said the measure didn't need voter approval because it's a response to a court mandate and is linked to the income tax.
"This bill satisfies the educational, legal and economic needs facing our state, but above all it partially satisfies the moral obligation we have for every child in this state," sponsor Assemblyman Albert Coutinho, D-Essex, said.
"I don't have a problem taking anything to the voters," said Sen. Ronald Rice D-Essex, the Senate's lead sponsor, who said schools have already waited years for the funding. "... It needs to be done now, if not, November means you've lost a construction season."
Added Sen. John Girgenti, D-Passaic, "With the sordid history this program has, it's going to be very difficult to pass anything on the ballot."
Thus, the Legislature approved borrowing $3.9 billion for school construction — increased from Corzine's proposed $2.5 billion to garner support among lawmakers. A resolution to place a question on November's ballot asking voters whether to amend the state Constitution to reinforce the notion that borrowing should be placed before the voters was on the agenda but hadn't been voted on yet.
The school construction plan narrowly passed the Senate despite rumors it could take a long night of arm-twisting to garner support from 21 Democrats. But the vote was only delayed a moment as Sen. Bob Smith, D-Middlesex, was away from his desk when the measure was stuck at 20 yes votes. It passed 21 to 18, largely along party lines. Democrats John Adler, D-Camden, and Jeff Van Drew, D-Cape May, voted no. Sen. Diane Allen, R-Burlington, was absent.
It cleared the Assembly 42-36, with two abstentions. Democrats Nelson Albano, D-Cumberland, Peter Barnes III, D-Middlesex, Patrick Diegnan Jr., D-Middlesex, Matthew Milam, D-Cumberland, Linda Stender, D-Union, and John Wisniewski, D-Middlesex, voted no. Republicans John Amodeo and Vince Polistina, both R-Atlantic, abstained.
The debate whether to borrow for school construction — $2.9 billion for the 31 districts formerly known as Abbotts and $1 billion for all other districts, mostly for suburban districts but including $50 million for county vocational schools — wasn't merely a constitutional debate.
Some lawmakers remain leery whether the Schools Development Authority, the renamed Schools Construction Corp., has sufficiently reformed its operations to be trusted with new funding after it was plagued by mismanagement and waste in spending its original $8.6 billion.
"After years of abuse, years of mismanagement and years of corruption, no longer is the defense, "It's for the children,' a valid defense," Assemblyman Jon Bramnick, R-Union, said.
Supporters countered that lawmakers shouldn't blame the victims — the school children who attend classes in hallways or coat closets in buildings constructed in the 1800s.
"The words "school construction' in the state of New Jersey have become synonymous with mismanagement, but we cannot allow mistakes in the past to prevent us from making things better for all our students," Sen. Teresa Ruiz, D-Essex, said.
The funding, expected to last about five years, would build 27 schools that were set for construction with the former SCC ran out of money, plus 20 to 25 others of the 371 needed in the Abbott districts — an estimated $15 billion worth of construction, in all. There is no estimate how many schools could be built with the $1 billion sent to non-Abbotts, whose projects are partially matched by local property taxpayers.
$32.9B spending plan clears state Legislature
Star Ledger June 24, 2008
A $32.9 billion state budget that cuts spending and imposes no new taxes won approval Monday evening in the Legislature, which also passed legislation to borrow $3.9 billion to build schools without seeking permission from voters.
Democrats hailed the budget, which is $600 million less than the one approved last year, as a "historic" step toward fiscal stability. Republicans called it "a missed opportunity" to cut wasteful spending that will hit taxpayers in the wallet.
It is a budget that will inflict some short-term pain in the hope of fixing the state's troubled finances in the long run.
Critics predict reduced state aid could mean layoffs of police and firefighters, higher property taxes and hospital closings. Wealthier taxpayers will see their homestead rebates shrink or disappear.
But the budget also takes steps to shrink the size and cost of state government, both next year and into the future. The Personnel Department and Commerce Commission will be abolished. Senior state workers will be offered early retirement, a move expected to increase the state's pension obligations by $255 million but yield recurring payroll savings of $77 million in the first year and $93.5 million thereafter.
A separate bill -- which nearly died in the Assembly -- makes it harder to qualify for public pensions and eliminates Lincoln's Birthday as a state holiday. It took Assembly leaders more than three hours to line up the 41 votes needed to pass it as Republicans initially balked, calling the bill too weak, and some Democrats objected that such changes should be made at the bargaining table.
It finally passed at 11:06 p.m. by a vote of 54-13 and is projected to save $300 million over 15 years.
"We have crossed a threshold into fiscal sanity," said Sen. Barbara Buono (D-Middlesex), who chaired the Senate Budget Committee.
The budget goes to Gov. Jon Corzine, who last night called it "truly unprecedented."
"By its actions, the Legislature provided the means to build decent schools for New Jersey's children, offered quality health care for children and those who are without access to health insurance and made a $650 million payment toward reducing the state's debt," Corzine said. "It was, all things considered, an important day's work for the future of New Jersey."
He said he would "closely review" the final version in the coming week. The budget must be signed by July 1.
Buono said the budget contains no new taxes, no fiscal gimmicks and no "Christmas tree add-ons," or spending on lawmakers' pet projects.
At the same time, she said, it increases state aid to education by $600 million and expands a program that subsidizes health insurance for middle-income families.
Buono admitted some of the cuts the budget makes are painful, but said: "My hope is the difficult decisions we have made this year will translate next year into more needs being met."
But Sen. Leonard Lance (R-Hunterdon) said he fears the $3.9 billion in additional state debt for school construction "will crowd out other programs."
Assemblyman Joseph Malone (R-Burlington) called it "a budget of lost opportunities" while Assemblywoman Marcia Karrow (R-Hunterdon) pronounced it "a sham." Both said it fails to curb wasteful spending while shifting costs onto local property taxpayers.
Assemblywoman Alison Littell McHose (R-Sussex) said that by cutting state aid to towns, "this budget guarantees that property taxes will continue to rise."
Assembly Budget Committee chairman Louis Greenwald (D-Camden) said the budget contains "historic" cuts. He noted it is $600 million less than the one approved a year ago, "only the fourth time in 57 years that spending from one year to the next has been reduced."
Greenwald said the original budget proposal in February had "pain on every page" and that lawmakers managed to alleviate much of it, even while they cut $100 million from Corzine's spending plan.
In response to complaints from mayors, physicians and citizens, Greenwald said, the Legislature restored some of Corzine's proposed cuts in aid to municipalities and hospitals and found $9 million to keep state parks open.
"We listened, and we took action," Greenwald said, repeating it like a mantra.
Republicans took a unified position against both the budget and the $3.9 billion in borrowing for schools, which they insisted should have been submitted to voters for their approval.
Assemblyman Richard Merkt (R-Morris) noted the Legislature also was scheduled to vote on a proposed constitutional amendment that would require voter approval for all future state borrowing; it later passed by votes of 29-0 in the Senate and 61-15 in the Assembly. Merkt said it was "somewhat hypocritical" to support that proposal while bypassing voter approval for $3.9 billion of new debt.
"The cost to the people of New Jersey is more on the order of $7 billion when you get done with interest payments," Merkt said. "There is no good excuse not to send it to the people."
Staff writers Dunstan McNichol, Josh Margolin, Claire Heininger and Susan K. Livio contributed to this report.
Posted on Tue, Jun. 24, 2008 Legislators approve cuts in N.J. spending By Jonathan Tamari and Adrienne Lu Philadelphia Inquirer - Trenton Bureau Following Gov. Corzine's call to rein in government spending, New Jersey lawmakers yesterday approved a budget that cuts $600 million from the current spending plan. > Lawmakers also passed a plan to cut benefits for newly hired government employees after nearly four hours of closed-door wrangling in the Assembly. > Around the nation, state leaders are struggling to set budgets in a tough economy. Pennsylvania appears headed for another budget showdown that could push negotiations into the first hours of the new fiscal year, starting next Tuesday. In five years in office, Gov. Rendell has never signed a budget on time. > In New Jersey, yesterday's votes for a $32.9 billion budget came on the same day lawmakers approved another proposal, also backed by Corzine, to borrow $3.9 billion for school construction. > The new budget, pushed by Corzine as a step toward repairing state finances, slashes support for property-tax rebates, colleges, hospitals and municipalities. But Democrats say it answers pleas for a slimmer government. > "It is the budget the people of New Jersey requested. It is the budget the people of New Jersey demanded," said Assembly Budget Committee Chairman Louis D. Greenwald (D., Camden). > Greenwald said the plan is the fourth in 57 years that reduces spending from the previous year. > Assemblyman Joseph R. Malone III, the Republicans' ranking budget officer, commended Democrats for the spending cut but said the plan unfairly shifts tax burdens to small, suburban towns without targeting government waste. > "If this budget had been crafted with the right priorities, we could have reduced the size of the budget and still been able to provide property-tax relief and funding for programs that benefit our state's most vulnerable citizens," said Malone, of Burlington County. > Other Republicans also criticized the cut that reduces or eliminates property-tax rebates for about 500,000 homeowners. > The benefits bill added a note of drama after Democrats approved the budget and school-borrowing plans with ease. The most significant changes would eliminate Lincoln's birthday as a holiday for government workers, increase the minimum salary to qualify for pension credits to $7,500 a year for most government workers and educators, and raise the retirement age two years, to 62. > Republicans at first largely abstained on the bill in the Assembly, saying it wasn't tough enough. But after huddling privately and meeting with top Democrats, many supported the changes, and the bill was passed. > A visibly annoyed Assemblyman Richard Merkt (R., Morris), who voted against the plan, said: "The resolve dissolved." > The stalemate broke, according to Assembly Minority Leader Alex DeCroce (R., Morris) and Senate Majority Leader Stephen Sweeney (D., Gloucester), when Corzine agreed to require departments to report how many workers they hire to replace employees who take an early-retirement package. > "The reforms cannot happen in a partisan nature," Sweeney said. "We saw that tonight." > Supporters of the benefit cuts said they would help dig the state's pension system out of its $25 billion shortfall. > Influential labor unions made their presence felt with contingents watching the votes from the Senate and Assembly galleries. They have said it is unfair to make changes a year after they signed a new contract. > Corzine's approval is still needed on the benefits plan and budget. Corzine had called for a smaller bottom line as a stride toward repairing state finances after years of multibillion-dollar deficits and ballooning debt. Despite the cuts, he noted that the budget adds more than $500 million for public schools and about $9 million to expand health coverage. > The plan also makes progress on another Corzine priority by paying off $650 million of the state's $32 billion debt. > But lawmakers voted to add $3.9 billion of borrowing to fund a new round of school construction. Urban lawmakers, saying the money is needed to repair or replace aging and overcrowded schools, linked their budget votes to the school construction plan. > Sen. Ronald Rice (R., Essex) said new schools for the state's needy students are long overdue. > Republicans said the price tag, which started at $2.5 billion, grew too high and should have gone to the public for final approval. > "We have a belief in our state: Trust the voters about whether or not we should bond their money and their kids' money," said Sen. Bill Baroni (R., Mercer). > Corzine himself has called for giving voters more oversight on state borrowing, and the Senate and Assembly advanced a measure doing just that hours after approving the latest round of bonding. > The new money, which will restart a school-construction program plagued by waste in its first iteration, includes $2.9 billion for 31 largely urban schools covered by court mandates on spending, including Burlington City, Camden, Gloucester City and Pemberton, and $1 billion for the rest of the state's districts. > While Democrats said the budget includes no tax increases, it does raise $62 million by extending a tax on utilities that was to have begun a phase-out this year. |
