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The Record - Moody's downgrades New Jersey credit rating..For the third time this year a major Wall Street ratings agency has lowered New Jersey's credit rating, citing revenue shortfalls and other budget problems.
NJ Spotlight - Educators Help Put Baraka Over the Top, Schools Pose Daunting Challenges...New mayor's consistent criticism of Superintendent Anderson and her 'One Newark' plan pays off at polling places
NJ Spotlight - Another District Gets Fiscal Monitor to Try to Solve Budget Woes...Belleville schools are latest ordered, following audit, to submit to state oversight of finances
The Record - Moody's downgrades New Jersey credit rating
MAY 13, 2014, 8:45 PM LAST UPDATED: TUESDAY, MAY 13, 2014, 8:46 PM
BY JOHN REITMEYER
STATE HOUSE BUREAU
THE RECORD
For the third time this year a major Wall Street ratings agency has lowered New Jersey's credit rating, citing revenue shortfalls and other budget problems.
Moody's Investors Service announced Tuesday that it was downgrading the state's credit rating by one step because of New Jersey's "weakened financial position resulting from recurring revenue shortfalls and ongoing reliance on non-recurring resources."
Last month, the state Department of Treasury made public an $807 million budget shortfall and said it was largely due to income tax collections falling short of the estimates used to support state spending. The gap between what officials expected to collect in taxes and what people actually paid is the latest in a series that Governor Christie has had to deal with since taking office in early 2010.
And like the others must be closed before the fiscal year ends June 30. Closing it likely means cuts in state services or in programs like aid to public schools.
The state's credit rating is an important factor in determining how cheap and easy it is to borrow money for capital projects such as schools and bridges that cannot be funded in one budget year.
Tuesday's announcement from Moody's follows earlier downgrades by Standard & Poor's and Fitch Ratings, the other two major Wall Street ratings agencies.
It also marks the sixth downgrade since Governor Christie -- a Republican who has tried to make the case that his fiscal policies have rescued the state after years of mismanagement by Democratic predecessors -- took office. That ties the record for a New Jersey governor set by former Democratic Gov. Jim McGreevey, though McGreevey reached six downgrades in less than three years.
Joseph Perone, a spokesman for the state Department of Treasury, said the Moody's downgrade "affirms the urgent need to address New Jersey’s long-term fiscal health."
Christie has talked for much of the year about the need to make further changes to the public employee pension system as higher state payments required by a state law he enacted earlier in his tenure have now come due. The current, $33 billion budget calls for a $1.6 billion pension contribution, and the payment would go up to $2.25 billion in the $34.4 billion spending plan Christie has proposed for the fiscal year that begins on July 1.
But so far, the governor has yet to identify exactly what should be done to further reduce pension costs after a bill he signed into law in 2011 increased the retirement age, ended cost of living adjustments and required employees to contribute more toward their retirements. Democrats who control the state Legislature have also been reluctant to embrace Christie's call for further changes.
Perone said the Moody's downgrade should "serve as a clear warning and call for the Legislature to join the Governor in taking on the cost of these entitlements in a real way to secure our long-term fiscal health and protect our ability to make investments that matter most."
Email: reitmeyer@northjersey.com
NJ Spotlight - Educators Help Put Baraka Over the Top, Schools Pose Daunting Challenge
John Mooney | May 14, 2014
New mayor's consistent criticism of Superintendent Anderson and her 'One Newark' plan pays off at polling places
Ras Baraka’s successful run to be Newark’s next mayor was as much about education as any other issue in the city.
A former teacher and now principal of Central High School, much of his credibility rested on his success as an educator. He focused his campaign rhetoric on fighting the state’s two-decade-old control of the school district, and became the harshest critic of state-appointed superintendent Cami Anderson and her policies, often calling on her to resign.
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And touching a nerve in this city, he portrayed his opponent, Seton Hall law professor Shavar Jeffries, as a pawn of the reform and charter school movement.
Last night in his victory speech before a raucous crowd at the Robert Treat Hotel, Baraka spoke of the need to fight the ongoing closures of Newark’s public schools, and thanked the various education unions that were the backbone of his support.
“We have to be the mayor that keeps our schools open, and make sure they are good for all of our students,” he said to loud applause.
But with the electioneering over, now comes the challenge of governing in a city where the district’s troubles will not go away -- even with a new mayor.
Among his key supporters and standing with him on the stage last night was Jersey City Mayor Steve Fulop, no obvious ally on education issues as a reform-minded mayor in the state’s second-largest city.
But Fulop said in an interview afterward that Baraka was a “a really smart and reasonable guy,” and was not the enemy of all school reforms -- including charters -- that he was portrayed to be in the campaign.
Much of the money that came into Jeffries was tied to the school reform movement, including $850,000 from a committee affiliated with the Democrats for Education Reform, a national reform group.
“Tomorrow starts the process of healing and bringing the city together, and that includes the reform movement,” Fulop said.
“[Baraka] understands that the charter community is in Newark and part of the education system in Newark,” he said.
It would have been hard to tell from the rancor of the election, in which Baraka attacked Anderson’s plans for the school system at every chance.
And Jeffries, for all his allegiances with charter schools as a founding board member of one, hardly proved to be a big backer of Anderson, either, criticizing many of her policies and strategies.
But Jeffries was clearly seen as more reform-friendly, and there was considerable trepidation among those backing wholesale changes in the district about Baraka’s prospects for victory. The outcome of the election was particularly critical to Anderson’s fate in promoting her “One Newark” reorganization plan for the district, which is now being rolled out.
For example, it appeared to be no coincidence that the controversial enrollment letters to families for next year were postponed and only went out last week to avoid making an impact on the race.
Even more controversial, Anderson’s request to the state to waive seniority rights for teachers in the case of coming layoffs also has remained in limbo now for more than two months, with acting commissioner David Hespe yesterday saying it remains under review.
Still, even with Baraka’s victory, the fact remains that the district is being run by the state, and the mayor holds limited powers even in the case of local control.
But several observers said yesterday that they saw Baraka’s victory as providing a new voice in the city on these issues, even if just a symbolic one.
“It means we have a life,” said Michael Dixon, vice president of the Newark Teachers Union, a strong backer of Baraka’s. “He’s the first piece of getting local control back. Putting him in that slot, everything changes. Everything is not reform anymore.
“He’s not against charters, but he’s opposed to closing community schools to put charters in them,” Dixon said. “We need someone on our side, and he is truly an educator.”
NJ Spotlight - Another District Gets Fiscal Monitor to Try to Solve Budget Woes
John Mooney | May 14, 2014
Belleville schools are latest ordered, following audit, to submit to state oversight of finances
Just two weeks after the Christie administration assigned a fiscal monitor to the Lakewood school district, it announced yesterday that it’s sending another one to oversee finances in the Belleville schools.
Acting state Education Commissioner David Hespe said he was sending the monitor to the Essex County district to address “repeated findings and material weaknesses of internal controls” found in financial audits.
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It is the eighth fiscal monitor that the state has dispatched into troubled school districts. The move is seen as being far more temporary and less wide-ranging than a full takeover. The state now has full or partial control in four districts.
But that doesn’t necessarily make the monitor intervention less complex, as Hespe and his staff are learning in the Lakewood district.
In that case, the district had reported a $5 million deficit going into the end of the year and intractable challenges in trying to address a population where 20,000 children -- mostly Orthodox Jews -- attend private schools, while less than 6,000 attend the public schools.
One of the financial pressure points has been the state requirement that the district pay for transportation of the private school students, at a cost of nearly $20 million a year, as well as special education and other services.
Hespe met with the monitor, Michael Azzara, and local Lakewood officials this week.
He said in an interview yesterday that among the issues to be addressed is that the Jewish private schools have separate bus routes for boys and girls. Others issues stem from the schools not taking advantage of staggered starts and other potential efficiencies.
But when asked whether he would order an overhaul of the transportation system, Hespe said there was far more discussion to take place.
“There are certainly some complexities that we are trying to understand first,” Hespe said. “All of these things are things we need to take a look at.”
A more immediate issue is how to close the $5 million budget gap.
Hespe said Azzara was first trying to find savings in the existing budget. He said a possible loan or emergency aid was not yet being considered.
“Ultimately, we’d have to work with the district to find available money, but we’re not there yet,” he said.
The Belleville monitor, Thomas Egan, will face his own challenges in that district, which has 4,600 students and nine schools. Egan currently serves as the monitor in Elmwood Park as well, and will double up as monitor in Belleville.
Among his tasks will be addressing 24 audit findings of accounting irregularities and a coming up with a plan to address an impending deficit in a $62.5 million budget for this school year. The state said the amount of the deficit is yet to be determined.
The other school districts currently with fiscal monitors are Asbury Park, Trenton, Pleasantville, Garfield, Elmwood Park, Elmer and Woodbine.
