O’Scanlon: “I’m holding my breath waiting for S&P to revise their report.”
Wall Street rating agency, Standard and Poor’s, released an analysis of Governor Christie’s Fiscal Year 2013 budget yesterday that concurred with the reaction that many on both sides of the aisle have had since Christie addressed the legislature on Monday; Where are these revenue numbers coming from?
NEW YORK (Standard & Poor’s) Feb. 24, 2012–New Jersey Gov. Chris Christie
released his proposed $32.15 billion budget for fiscal 2013 on Feb. 21. The
budget remains structurally unbalanced, is built on what Standard & Poor’s
Ratings Services regards as optimistic economic projections to close the
budget gap, and increases New Jersey’s (AA-/Stable) reliance on nonrecurring
revenues.
Christie’s budget projects revenue growth of 7.3% to $31.86 billion. Based upon the state’s projections, revenue would have increased 9%, if not for Christie’s proposed income tax reduction. While S&P concurs that revenue could increase significantly in a strong economy given New Jersey’s high income and progressive income tax structure, the agency doesn’t see a strong economy on the horizon in New Jersey until 2015.
“Due to New Jersey’s high incomes and the state’s progressive income tax
structure, we believe revenues could rebound significantly in a strong
economy,” said Mr. Sugden-Castillo. “However, in our view, the economic
assumptions that underpin the state’s revenue forecast appear to be optimistic based on current and projected economic conditions at the state and national levels,” he added. Through the first half of fiscal 2012, New Jersey revenues grew 3.2% from fiscal 2011, but are still falling 3.2% below budgeted amounts. According to IHS Global Insight Inc., the state will register 1.3% growth in 2012- 16th among all states. Unemployment in the state was 9% as of December 2011. IHS Global Insight projects employment will not return to pre-recession levels until 2015 and projects unemployment to remain above 8% through 2014.
Assemblyman Declan O’Scalon, the Republican Budget Officer in the lower house, said that S&P’s report is so flawed that it resembles a political hit piece more than an objective credit analysis.
“S&P, and other critics, are relying on the year to date short fall in our current revenues compared to budget in order to give their criticism of our new budget credibility,” said O’Scanlon, “They are all ignoring the well known fact that the lion’s share of state revenue comes in during the first quarter of the calendar year.”
O’Scanlon said that New Jersey’s revenue receipts will be right on budget at the end of February and that S&P should have known that.
“I’m holding my breath waiting for S&P to revise their report,” said O’Scanlon, “For two years, the Christie administration’s revenue projections have been spot on. I’m confident they will be this year too.”
Regarding the reliance of non-recurring revenues O’Scanlon said, “13% of Jon Corzine’s last budget relied on so-called one shot gimmicks. The Christie administration reduced that to 4% in the current budget and it’s only 5% in the proposed budget. There are always going to be non-recurring items. We (the Republicans) have brought them down to prudent levels. S&P should be praising that part of our budget, not criticising it.”
S&P also criticized the Christie administration for underfunding the state pension system:
Slightly more than half of the increase ($587 million) in
total spending is tied to pension funding cost increases. Total funding for
defined benefit pensions grows to $1.1 billion in fiscal 2013 from $484
million in fiscal 2012. Defined Benefit Pension funding accounts for 3.33%of
spending in the proposed budget. Despite this significant increase, New Jersey
is only funding 28.6%, or 2/7ths, of its statutorily determined actuarial
recommended contribution, which is different from ARC as defined by GASB.
According to the state, the ARC as calculated by GASB is normally higher than
the statutorily determined actuarial recommended contribution. The
underfunding of the ARC results in continued pressure on its pension system.
“To treat what the Christie administration has done with the pension system as news and a negative ignores recent history and raises suspicions of political motivation on the part of S&P,” O’Scanlon charged, “The Governor’s proposed budget makes the largest pension contribution in New Jersey history and is right on track with the pension reforms and benefit reforms passed last year.”
O’Scanlon defended the 3.7% increase in spending under the proposed budget. “What should be cut? The increased spending on education and municipal aid holds down property taxes. The other increases are for pensions and higher education, which has been neglected for decades. Our educated and sophisticated workforce is our most important asset.”
John Sugden-Castillo, S&P’s primary credit analyst for the report, has not responded to an email asking for comment.
Dupre gained notoriety as a result of her involvement in the scandal that forced former New York Governor Eliot Spitzer from office.
Ashley was made infamous, not famous, by the Elliot Spitzer scandal. It is nothing she hoped for and nothing she takes pride in. She is, however, very proud of the person she has become since that scandal. Closing the door on that chapter of her life with great integrity, Ashley has moved on to be a positive force for people of all ages by taking her experiences and using them to help others lead better, more productive, fulfilling, positive lives.
Based on a recent column, it would seem Dupre certainly believes in her product:
My boyfriend has a huge lingerie fetish. He loves me in anything with lace, and especially anything sheer. But sometimes I worry that he’s more interested in my Victoria’s Secrets than my actual secret spot. How can I tell if the fetish has gone too far?
Trina, 25, Far Rockaway
Loving lingerie is just fine. This is what’s wrong with women today: You start a relationship wearing sexy lingerie for your man, and then after a little bit, once you get comfortable, you just don’t feel like doing it anymore. Come on, it’s lingerie! A pretty harmless “fetish”— if it can even be classified as one— if you ask me. You should feel sexy and confident that he loves looking at you in it. It’s not like he’s going out with some woman behind your back to satisfy his urges. Personally, I think there is nothing sexier than a woman with a sick pair of high heels accompanied by beautiful pieces of lingerie. Not only is it hot for your man to look at, seeing yourself look so sensuous can be a major turn-on for you as well.
The only potential issue is if you have some body issues, which every woman has from time to time, regardless of how attractive she is. Maybe the real problem here is you and not him. I know when I gain a few pounds I feel like jumping into my cotton pajamas rather than slipping on a silk nightie. When that happens, you have to step back and get yourself back on the right page. Focus on yourself and take care of your body. Go to the gym for an hour, five days a week, and get back to what makes you feel secure and sexy in your own skin. At the end of the day, it’s up to you to be the person your husband or boyfriend fell in love with. Otherwise, it’s just false advertising.
Good luck, Ashley. With all the free advertising you’ve received, the store should have a great start.
You know that bartender or waitress at your favorite summer spot at the shore? The one that is there year after year, knows your name when you show up every season and remembers your favorite drink? That one.
The really good ones make enough money in tips over the summer to support their households for the rest of the year. Six figures in cash tips over the summer.
Way too many of these people are also collecting unemployment, every year, year after year, from September through May. It is a way of life.
Two shore mayors from Cape May County, with the support of the League of Municipalities are looking for a legislator to sponsor legislation in the next session that would disqualify seasonal workers from collecting unemployment insurance, according to a report at NJ.com
The mayors and the league want to save money on unemployment for seasonal municipal workers. That’s not a bad idea. However the real savings, for the state’s unemployment fund, can be found in eliminating unemployment insurance for private sector seasonal employees.
Governor Christie doesn’t want the State to be subsidizing the horse racing industry. Rightfully so. However the State is also subsidizing the labor costs of every other seasonal industry. The State is subsidizing a comfortable way of life for many seasonal workers who don’t need it.
Unemployment insurance premiums are a major drag on the economy. They are a major disincentive to hiring new workers, especially for small businesses who have had to lay people off during this economy.
Eliminating unemployment insurance for all seasonal workers, not just municipal seasonal workers, will go a long way to returning the unemployment fund to solvency, reducing premiums for the businesses who hire year round workers, and boosting overall employment.
Bill Extends Tax Credits to Companies that Create Jobs, Invest in New Jersey
Trenton– Legislation sponsored by Senator Joe Kyrillos (R- Monmouth/Middlesex) seeking to create jobs and business investment in New Jersey has received full Senate approval. The Grow New Jersey Assistance Program established by S-3033 provides tax credits to businesses that invest at least $20 million in New Jersey and retain or create at least 100 jobs.
Kyrillos lauded the bill as an incentive for firms to relocate or expand operations in the state. “This legislation will help businesses put people back to work by reducing the tax burden of those that make a commitment to New Jersey,” he said. “Businesses that make a substantial investment of jobs and capital in New Jersey will receive a tax break from state government. This is exactly the kind of incentive program we need to bring New Jersey’s economy back.”
Businesses that qualify will receive a $5000 credit against its tax liability for each job created or retained in state under the program for up to 10 years. Senator Kyrillos joins Senator Ray Lesniak (D- Union) as co-prime sponsor of the measure.
By Assemblyman Declan O’Scanlon, Republican Budget Officer
It’s a simple question loaded with political appeal: “With so many people hurting, and income disparities rising, shouldn’t we ask New Jersey’s millionaires to a ‘fair share’ in taxes?”
OK. What’s a “fair” share?If the current share of state income tax paid by the top 1% of New Jersey’s taxpayers — about 37 percent — isn’t high enough, what is?Would 80 percent be fair?90 percent?Taxpayers earning $1 million pay an effective tax rate this is about four times what taxpayers earning $100,000 pay.When and how will we know when we’ve achieved “fairness”?
Unfortunately, intense partisanship feeding on visceral emotions has made it virtually impossible to have a rational conversation about taxes in America.As a senior member of the State Assembly’s Budget Committee, I think those of us in positions of leadership have a responsibility to do more than stoke emotions, and instead adopt tax policies that generate the revenue needed to support the State’s budget priorities on a fair and sustainable basis.
Piling taxes on the “rich” may be great politics, but it’s lousy public policy.New Jersey already has a “progressive” income tax system which, thanks to high-income households receiving a greater proportion of their income from investments and capital gains, has made our revenue base highly volatile.Additionally increasing our relative reliance on high-income taxpayers will increase volatility, making it more difficult to engage in prudent long-term financial planning.
Most experts believe increased volatility is a problem because fiscal stability is a condition precedent to sound policymaking.Wild fluctuations in revenues fuel an inefficient boom-and-bust approach to budget-making that mismanages popular expectations. The impact of emergent budget cuts on New Jersey residents is regressive – those at middle and lower income levels experience the pain of budget cuts disproportionately since they more often benefit from state programs.
Some editorialists have suggested Governor Cuomo’s recent decision to embrace higher rates for high income New Yorkers should serve as an example for New Jersey.Perhaps they should read the fine print.New York’s “tax increase” is no such thing.New York’s current high rate is 8.97%, the same as New Jersey’s.Instead of letting the rate go down to 6.85%, as scheduled, Cuomo is saying he’ll let the rate fall to 8.82% for taxpayers at $2 million or more, but let the rate fall to 6.85% for taxpayers between $300,000 and $2 million.Everyone in New York will get a tax cut, but folks above $2 million will get less of a tax cut than they had expected.If that’s the standard of “fairness,” maybe the editorialists are right and we should follow New York’s example!Here’s the critical point: the top marginal rate in New York will soon fall below the top rate in New Jersey; that’s not good news for our competitive position.
New Jersey Treasury’s Chief Economist’s review of national IRS data confirmed a statistical connection between tax increases enacted under former Governor McGreevy and an increase of affluent taxpayers who moved out of, or never moved into, New Jersey.The Chief Economist also conducted a survey confirming a significant proportion of tax advisors had discussed moving out of New Jersey with their relatively affluent clients.Contrary to the often inaccurate summaries in the popular press, the study and the separate survey were modest in scope and merely confirmed what we already know: yes, Virginia, taxes matter.
Are they the only competitive consideration? Absolutely not. Infrastructure, regulations, climate, educational levels and other factors play a major role.But there’s no denying taxes figure into investment and location decisions.
Instead of asking “what’s fair?” we should be asking “what’s in our long-term self-interest?”I suggest it’s in New Jersey’s self-interest to pursue policies that support sustainable and growing revenue collections over time.Although New Jersey cannot expect to compete globally on the basis of low taxes alone, we should avoid negative “outlier” status and with it the kind of reputation that once prevented New Jersey from getting into the starting blocks when companies and leaders make site selections.
I speculated a while back that the Jon Corzine scandal could eventually be the undoing of Barack Obama. Turns out that Crooked Jon may wind up being the downfall of the Clinton clan as well.
Even as Jon Corzine’s MF Global was collapsing, a firm that includes former President Bill Clinton in a senior post was raking in huge fees for public-relations and financial advice from the ill-fated brokerage…
Now Pascrell, 74, should announce his retirement and save the New Jersey Congressional Redistricting Commission a lot of work. Doing so would eliminate all controversy over naming a state highway after him.
Barney Frank, 71, the Massachusetts Congressman from Bayonne, announced his retirement after the Bay State announced their new congressional districts. Frank said he didn’t want to raise the money or do the electioneering necessary to get elected in his new district.
Pascrell announcing his retirement prior to the new congressional districts being determined would be a selfless act of public service. The rest of New Jersey’s congressional delegation would want to name a more prominent road after him. The Resdistricting Commission’s work would become easy and appropriate, as the district to be eliminated should be from North Jersey where the population has declined vis-a-vis the rest of the state.
If Pascrell announced his retirement, the bill to name Route 19 after him could be fast tracked in the lame duck legislative session. Governor Christie might even sign it, despite the fact that Pascrell was a Corzine caddy, second only to Frank Pallone, during the 2009 gubernatorial campaign.
If Pascrell does not take this opportunity to retire, the question of the appropriateness of naming public facilities after sitting office holders should be hotly debated. Every member of the Assembly Transportation committee except Burlington County Assemblyman Scott Rudder voted to release the Pascrell naming bill to the full Assembly. Rudder said that naming a road after a sitting office holder was hypocritical and that the state has more pressing issues.
Rudder is right, but there is a stronger argument against giving away the names of public facilities. In these difficult economic times, we should sell and resell the names of our roads, bridges and buildings, with all of the proceeds going to either retire debt or build new facilities, thereby avoiding new debt.
There is precedent for this type of revenue generation. Former Governor Brendan Byrne’s name was taken off the Meadowlands Arena in favor of Continental Airlines and later Izod who both paid handsomely for the naming rights.
Glassboro State College was renamed Rowan University after Mr. Rowan donated $100 million.
The State and New Jersey’s counties and municipalities could benefit greatly by selling naming rights to businesses and philanthropists.
Over 50 years ago, President Kennedy recited one of the many great lines in his historic inaugural address when he said “Ask not what your country can do for you – ask what you can do for your country.”
In these troubled times, there is something that all of us can do for our country. That is to “Buy American-Made In the USA.” This year, holiday shoppers in the United States will spend over $10 billion when shopping for gifts. This at a time when there are millions of people without jobs or health insurance through no fault of their own.
There are many manufacturers of American-made products, struggling to survive, whose future depends on strong sales during the next four weeks. For many workers, those sales determine whether they are still working in January or whether they join the ranks of the unemployed.
While buying American isn’t always easy, if you make a conscious effort to look at labels showing the country of origin on products before you purchase, it’s not as hard as you might think. If you are in a store looking for a partucular item, you could ask to see “American Made” products. You can also use the Internet to research companies that offer American-made products, such as clothing and toys. Just do a search for “American Made ______” (item you wish to purchase). In many cases you can purchase American made products right off the Internet.
Buying American can be everyone’s holiday gift to our country and to our fellow citizens. The job you save might be a neighbor’s, a relative’s or your own.
Trenton, NJ – Governor Chris Christie today announced that the State of New Jersey has been approved by the U.S. Department of Treasury for $33.8 million in funding through the State Small Business Credit Initiative (SSBCI), part of the federal Small Business Jobs Act of 2010, to encourage small business lending and job creation in the state. The intent of the SSBCI, which is to create jobs and strengthen state lending programs, mirrors New Jersey’s recent efforts to enhance its support of the state’s small business community.”Small businesses are the job creating engines of New Jersey’s economy and we’ve made support for small business a top priority through targeted tax cuts, regulatory relief and lending programs,” said Governor Christie. “This funding being made available through the State Small Business Credit Initiative will strengthen our ongoing efforts to help small businesses succeed and grow in our state and create good paying, lasting jobs for New Jersey families.”
Governor Christie has made economic development a top priority by ensuring that New Jersey becomes a business-friendly state. Through the New Jersey Partnership for Action, under the direction of Lt. Governor Guadagno, the Christie Administration has implemented an aggressive economic development agenda, including overhauling state government’s regulatory system and reducing the red tape that stifles economic growth and imposes costs on businesses and citizens. The Governor’s Fiscal Year 2012 Budget provided for $185 million in targeted, job creating business tax relief and incentives to spur growth. When fully phased in over 5 years, the Governor’s tax policy changes will provide $2.35 billion in job creating tax relief. By implementing these policies, Governor Christie has ensured that New Jersey will once again be “Open for Business.”
The funds from SSBCI will be received by the New Jersey Department of Treasury in three tranches over two years, based upon at least an 80-percent commitment of the first and then second distributions. Through a Memorandum of Understanding, the New Jersey Economic Development Authority (EDA) will use the funds to deploy loans, credit guarantees and loan participations through its existing small business lending programs, and to make a venture capital investment. Funds will be targeted to small businesses, small manufacturers, and women and minority-owned enterprises, with a particular focus on businesses that are located in underserved communities throughout New Jersey.
As part of this effort, the EDA Board today took action to enhance its portfolio by expanding access to capital for small businesses. The Board approved an increase in the funding available through the EDA’s Fund for Community Economic Development (FCED) to support micro lenders, Community Development Financial Institutions and Urban Enterprise Zones that have a successful lending track record in their local communities. Under the “Loan to Lenders” component of the FCED, organizations with a successful EDA history will now be able to qualify for up to $750,000, an increase of $250,000 from what was previously available; new customers may qualify for up to $500,000. The loan term has been extended to up to 15 years, with interest-only payments for up to five years. Previously, terms were available for up to ten years, with interest-only payments for up to three years. Additionally, the use of funds has been expanded to also include lines of credit.
“As the state’s ‘bank for business,’ the EDA has a successful history of partnering with financial institutions to leverage its resources and ensure small businesses have access to the capital they need to remain and grow in New Jersey,” said Lt. Governor Guadagno. “By utilizing EDA’s existing partnerships within the lending community, New Jersey will be able to strengthen its current portfolio of assistance and help our small businesses secure the funds they need to expand and create jobs.”
For information on EDA’s small business programs, visit http://businesslending.njeda.com. To learn more about opportunities for business growth throughout New Jersey, visit the state’s business portal at www.NewJerseyBusiness.gov or call the Business Action Center at (866) 534-7789.
