July 20, 2008  

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The governor takes our questions

(by Jaimie Julia Winters - May 14, 2008)

In a meeting with Governor Jon Corzine and North Jersey Media Group weekly editors, the governor spoke mostly about state finances, but also touched upon public salaries and EnCap.

About the state budget, the governor said New Jersey’s debt rose from $3 billion to $33 billion, while revenue has risen only 3 percent and expenditures rose 7 percent. Corzine gave a glum outlook for New Jersey stating that money had failed to go into the state pension system, money was not put aside for post retirement medical benefits and that the state borrowed against the unemployment trust fund. The state, however, has and will be laying off 3,000 to 4,000 employees, has cut three departments and recently negotiated state employee contracts below cap, with 3 to 3 ½ percent raises and less benefits. What could drastically affect municipalities is the cut in extraordinary aid. However, Corzine stated although $199 million had been cut in aid to the municipalities, the state upped the aid to schools to $615 million. He advised municipalities to follow in the state’s footsteps in making tough choices to live within their means, keeping under the 4 percent cap in municipal salary increases and shopping for health care benefits. He added emphatically that he believes property taxes do not need raising.

Are there plans to re-institute any municipal aid?

"There is no prejudice against property tax relief. But towns have to make hard decisions now….If you look at the increase in educational aid verses the cut in [extraordinary aid] you’ll see many communities coming out net plus since 55 to 65 percent of your taxes go toward schools. It’s a mystery to me why there’s so much hooting and hollering how [cuts in municipal aid] will drive up property taxes. They are only looking at a piece of it, not the whole cloth."

What are the state’s plans for the Property Tax Rebate program?

"I think the program is in the right fix, the right structure to income levels in the state. I think the program is important for middle income families. For a family living in Nutley or Belleville, for instance, making $70,000 to $100,000 — and that’s where 70 percent of the state’s income makers are — $1,000 is a pretty meaningful deduction against the average property tax bill."

The buzz word seems to be "shared services." Many communities believe they already do this; what threshold of combined services are you looking for?

"There’s a lot of emphasis on garbage and sewerage consolidation [within communities] and not enough on law enforcement and school district consolidation… When you’ve got four towns, four [police] chiefs retiring with pensions, benefits and sick pay, it’s a hell of a lot more expensive than if you had one chief that had a broader scope of responsibilities. There should be a framework for public employees that is more consistent with the private sector, which is consolidating and eliminating duplication."

Contract negotiations between the union and municipalities and school boards are many times referred to as David and Goliaths. The unions seem to have more resources while the school boards have very limited resources. How should towns and schools boards deal with this?

"We may need an administrative structure … mandatory oversight to get it in line with public policy set by legislature and signed by the governor… we need to talk about using the cap [of 4 percent] and the county superintendent’s ability to veto contracts that go against the cap [in salary increases]."

What about other public salaries and benefits?

"We signed contracts over the last 25 years that leave contractual responsibilities with pensions and health benefits that leave the state, unless we walk away, with a hard time making up. We can go and try and get this changed, but that won’t help this budget. We rewrote the cap law to 4 percent and that cap has to be taken into consideration. Now I hear of settlements [with salary increases of] 4 ½ to 5, 6 percent. They [local officials] make that decision to go against it [the public policy.]"

The fill that was used in capping the landfills in the EnCap project is supposedly contaminated. Will the state require it to be removed? If not, how will it be dealt with?

"I am leaving that decision to experts as opposed to a governor that doesn’t understand all of the environmental elements that need to be addressed….It is clear that there is inappropriate fill that people could open that question; but some, most of it, may very well be meeting the standards expected. Some of it [could be removed], probably not what has been reported, but certain areas."

What about Donald Trump?

"This isn’t about Donald Trump, this about making sure that we have the cash to continue to move forward with remediation. The New Jersey Meadowlands and the DEP don’t him give him As, they give him Bs, …they do state there is progress with regards to the remediation."


 

 

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