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6-26-15 Legislature Passes Controversial Budget, Governor To Red Line Veto Much of It Today

NJ Spotlight - Democratic Lawmakers Add Last-Minute Funding for Pet Education Projects…Nearly $40 million in spending tacked onto proposed state budget sent to Gov. Christie   '...Some lobbyists said they wished the Legislature would take a broader view in its budget deliberations, saying the needs are widespread.“The reach of these changes are pretty limited,” said Lynne Strickland, executive director of the Garden State Coalition of Schools, the suburban schools group. “As opposed to building more aid into things like special education, where the impact would be for all. It’s not that these special interests are bad. But by no means are they reaching a majority of kids.”  '

John Mooney | June 26, 2015

Spending on public schools –- one-third of the total state budget – would appear to be pretty much unchanged in the Democrats’ proposed spending plan sent to Gov. Chris Christie last night.

But there were a few notable spending additions in the Democrats’ plan – amounting to nearly $40 million, and each tied to specific legislators and their interests.

Assembly Speaker Vincent Prieto (D-Hudson) won an additional $7 million for vocational schools, a pet cause that saw a package of bills passed this year.

Assemblyman Gary Schaer (D-Bergen), chairman of the Assembly’s budget committee, secured $5.2 million in additional funds for non-public schools, including funding purportedly for security to protect religious schools from potential terrorist attacks.

The biggest dollar winners were state Sen. Nellie Pou and Assemblyman Benjie Wimberly, who won nearly $20 million for their home school district of Paterson, where more than 300 layoffs are planned.

“It saves a lot of jobs, it saves hundreds of job,” Wimberly said. “We have to do what we have to do.”

A late addition to the proposed expenditures came from state Sen. Nia Gill (D-Essex), who saw $1 million added to her home school district of Montclair under “achievement gap” funding. Gill has successfully won this extra funding for Montclair under Democratic governors in the past, maintaining that the district’s efforts toward closing the achievement gap are address a statewide issue and and are even a statewide model.

“Montclair has a history of getting this money, and I think that was why it won the support of the caucus,” Gill said yesterday.

Still, the budget language allowing the move is intriguing in itself, basically setting criteria that only fit Montclair, but without naming the district outright.

Of course, Christie may veto each spending item when he announces his budget response today at a midday press conference. But Democrats said it was worth a try, even if trying to win approval of the extra spending is a bit of a reach.

“I think the governor gets it,” Prieto said of his package for the vo-tech schools, which includes $4 million in restored aid for adult education programs.

The governor has already vetoed the measures in the form of individual bills, Prieto acknowledged, but he noted that was outside the budget process.

“He said we should work this out in the budget, and that’s what we did,” Prieto said.

Such has been the process for school funding over the last few years, with Christie putting forward state aid figures in the late winter, then not much more than tinkering around the edges afterward.

For a vast majority of schools, state funding will be essentially flat, which has been the common theme in recent years.

State Sen. Teresa Ruiz (D-Essex), chair of the Senate’s education committee, won an additional $2 million in the budget to sustain two grant programs, one for professional development related to teacher evaluation and the other for technology support for the new PARCC exams.

Also a member of the Senate’s budget committee, Ruiz conceded that these were miniscule changes to what is a $9 billion aid package for the state’s schools.

“It’s nothing, but it’s at least an acknowledgement from this Legislature that we can do better,” Ruiz said of the specific grants.

In the bigger picture, she acknowledged there is little opportunity for changing the aid for most school districts, especially with a calendar under which school districts set their budgets in early spring.

“By the time we get the information (from the administration), districts have already submitted their own budgets to the Department of Education,” she said. “We end up having no say in the process.”

“If we really want to have an impact, we have to change the way we do budgeting,” she said.

Some lobbyists said they wished the Legislature would take a broader view in its budget deliberations, saying the needs are widespread.

“The reach of these changes are pretty limited,” said Lynne Strickland, executive director of the Garden State Coalition of Schools, the suburban schools group. “As opposed to building more aid into things like special education, where the impact would be for all. It’s not that these special interests are bad. But by no means are they reaching a majority of kids.”

One legislator spurned in the Democrats’ budget was state Sen. Thomas Kean Jr. (R-Union), who was called on by the governor in his budget address to shepherd a $2 million appropriation for a pilot school-voucher program – a perennial bid that has yet to succeed.

The Democrats cut the $2 million, and even Christie’s veto pen can’t save it at this point, as the governor can only subtract from the Democrats’ budget, not add to it.

“It’s extraordinary that the majority continues to block this avenue of opportunity for kids,” Kean said of the Democrats. “They were uniformly opposed from the get-go. We fought very hard to get this pilot initiated, and for the majority party, it wasn’t even an area of interest.”

When asked whether he would keep trying in the years ahead, maybe with a different proposal, Kean said there aren’t many options left after what has become a decades-long struggle.

“We have looked at stand-alone bills through this, we’ve looked at tax credits,” he said. “I don’t know.”

Here’s the full list of last-minute budget additions:

  • $20 million for high enrollment-decreasing ratable districts (Paterson, Egg Harbor City)
  • $5.2 million for non-public schools security, nursing and technology.
  • $4 million for adult education at vo-techs
  • $3 million for county vocational partnerships
  • $2 million for technology and professional development grants
  • $1.5 million in federal funding for Learning Ally, a program for dyslexia instruction
  • $1 million to “achievement gap” programs (Montclair)
  • $550,000 for extra aid to Pinelands districts
  • $435,000 to supplement AP exam fee waivers.

The Record - N.J. Democrats send Christie $35.3 billion state budget

June 25, 2015, 9:47 AM    Last updated: Thursday, June 25, 2015, 11:39 PM

By SALVADOR RIZZO  STATE HOUSE BUREAU

The Democratic-controlled Legislature sent Governor Christie a $35.3 billion budget for the coming fiscal year on Thursday, along with some familiar tax increases that seemed destined for his veto pen.

Christie, a Republican, had proposed a leaner, $33.8 billion plan earlier in the year. Instead of going along, Democratic legislators included an extra $1.5 billion in spending that would be financed mostly through higher taxes on businesses and millionaires.

Under the Democratic plan, almost all the extra money would go to the state’s distressed pension system for public workers, and nearly $200 million would be spread out among public schools, higher-education investments and a few pet projects for Democrats’ political allies and hometowns.

The last word on the budget, however, belongs to Christie, who vowed to slash spending with his line-item veto before signing the budget into law, which is expected today. The final product, Christie predicted, would be a budget below $34 billion.

“I think it’s safe to say that they have spent a lot of money that we don’t have and that we’re not going to be able to spend,” he said Thursday night on his monthly radio show on 101.5 FM, after the Democrats passed the budget in both houses. “This is what happens when the Legislature refuses to negotiate a budget with me, and they pass what they pass, and it’s left to me to decide what stays and what goes. I think it’s a foolish thing to do.”

The Senate approved the budget by a 24-16 vote, with all Democrats in favor and all Republicans against. The Assembly vote was 47-31, also along party lines. The budget would take effect Wednesday.

For the fifth year since Christie took office, Democrats and Republicans spent the day debating the pros and cons of raising taxes — making the same arguments, quoting the same academic studies and passing the same bills in the same party-line votes.

If Christie follows through with his promised vetoes, the outcome will also be the same: a spending plan with modest funding increases for schools and health care programs, and one that covers $1.3 billion in pension costs for public employees currently in the workforce.

The Democrats’ $35.3 billion budget plan is 8.9 percent larger than the one Christie signed last year. It includes a pension contribution of more than twice what Christie has proposed.

Democrats said they had no choice but to raise taxes to cover mounting costs, most especially in the pension system, which may run dry in a decade after years of neglect by two generations of governors and legislators.

Although Christie signed a pension-reform measure into law in 2011, promising a seven-year cash infusion of billions of dollars to rescue the retirement funds from collapse, he cut $2.4 billion from those payments in the last two years amid weak economic growth.

Sen. Paul Sarlo, D-Wood-Ridge, said the higher pension contribution meets the requirements of the pension reform law. Although the state Supreme Court this month declined to enforce the payments that were promised in the law, Sarlo said many Democrats and all Republicans voted in favor of them four years ago and should not shirk their responsibility now that “the bill has come due.”

“There is no excuse – the state should balance its budget and pay all of its bills,” said Sarlo, chairman of the Senate budget committee.

Sen. Kevin O’Toole, R-Cedar Grove, said that if Democrats were concerned about the pension system’s health, they would not have thrown “$200 million in add-ons” into the budget for pet projects and cash infusions in their home districts.

Assemblyman Declan O’Scanlon, R-Monmouth, called the Democratic plan a “phony, unsustainable, economy-killing budget” built on one-shot sources of revenue. At one point, he compared the $35.3 billion plan to his cuff links. “They don’t do a damn thing, but they’re really cool, just like this budget,” he said.

Not to be outdone, Assemblyman Jay Webber, R-Morris, said Democrats have known for years that there was no way Christie would sign off on tax increases. He called them “phony-baloney tax increases” and a “fake promise” to public workers worried about their pensions.”

Business groups complained that even talk of raising taxes has a chilling effect on economic growth. Environmental and commuter groups complained that the Democrats’ plan kicked the can down the road on funding for roads, bridges and mass transit.

Union leaders praised the Democrats for including the higher pension payment, saying 773,000 public workers and retirees are depending on the system, which faces $40 billion in unfunded liabilities.

“We are at the moment of truth in New Jersey,” Wendell Steinhauer, president of the New Jersey Education Association, said.

Star Ledger – N.J. Legislature sends Christie bill requiring quarterly state pension contributions

By Samantha Marcus | NJ Advance Media for NJ.com The Star-Ledger
Email the author | Follow on Twitter
on June 25, 2015 at 9:13 PM, updated June 26, 2015 at 12:56 AM

Trenton — State lawmakers on Thursday sent to Gov. Chris Christie a bill that would require the governor to make quarterly payments to New Jersey's public worker pension system, rather than one year-end lump contribution.

The change would make it harder for the Christie to make last-minute cuts to balance the budget and increase investment earnings on the money.

Christie vetoed a similar bill late last year, and lawmakers ran short on votes for an override. State Sen. Robert Gordon (D-Bergen), who sponsored both bills, had said spreading out the payments would increase the likelihood the money would make it into the ailing system.

Christie slashed payments into the pension fund last spring after tax collections came up short.


RELATED: N.J. Legislature sends $35.3B budget, tax increases to Christie


"It is important that we do everything we can to ensure the fiscal stability of the pension funds for the hundreds of thousands of public employees who have paid faithfully into the system every paycheck in the expectation that their retirement would be secure," state Sen. Linda Greenstein (D-Middlesex) said in a statement.

The bill (S3100) passed the state Senate 25-15 and it cleared the state Assembly 52-6, with 16 abstentions.

Under the legislation, the state would make payments on the first of the month in August, November, February and May of each year, generating $100 million in additional investment income next year, Gordon said.

The potential investment returns would continue to rise as the state's annual pension payment grows, he added.

The state would have to borrow money for the first two quarterly payments up front, but the investment rate of return would easily outpace borrowing costs, the Senate Democrats office said in a statement. It could expect to spend about $13 million in interest — at the current 0.52 percent rate on the state's line of credit, it said.

State Assemblywoman Maria Rodriguez-Gregg (R-Burlington) warned the Assembly that payment schedule could "cripple our state's cash flow," and it would be more reasonable to require quarterly payments in an amount available at the time.

"This approach still leaves the executive with the discretion to manage the state's cash flow while still requiring the quarterly payments," she said.

In vetoing the similar bill in December, Christie called it "an improper and unwarranted intrusion upon the longstanding executive prerogative to determine the appropriate timing of payments."

"Simply wishing in a law that sufficient funds will be available on specific future dates does not change the fiscal realities of revenue collection during the course of a 12-month year," he said.

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Samantha Marcus may be reached at smarcus@njadvancemedia.com . Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.

 

NJ Spotlight - Warns He’ll Be Watching ‘All the Spending’…Extensive line-item vetoes expected, but the real surprise may be what the Dems didn’t include: fully funded school aid and relief for depleted Transportation Trust Fund

John Reitmeyer | June 26, 2015

After months of arguments and anticipation, Gov. Chris Christie and state lawmakers finally took action in Trenton Thursday, with legislators working into the early evening to present him with a $35.3 billion 2016 budget. Christie indicated that he would act on it today, which will allow him to use the budget bill to illustrate his political positions when he announces his candidacy for the presidency on Tuesday.

And while there’s been a great deal of speculation about Christie’s political future, the fate of the budget crafted by the Democrats who control the Legislature carries little suspense. Christie, a Republican, implied that there would be heavy edits coming via the state’s constitutional line-item veto when he spoke last night on his monthly radio show.

“I’m going to take a look at everything,” Christie said on NJ 101.5 FM. “All the spending.”

“This is what happens when the Legislature refuses to negotiate a budget with me,” he said.

Christie today is also expected to outright reject two revenue-increasing measures that won approval during floor votes in both the Assembly and Senate yesterday.

But while Christie’s cuts may be easy to predict, the budget that the Legislature sent to him is more notable for what it omitted that what it included.

For starters, the Democrats did not fully fund the state’s school-aid law and included no stable source of revenue for the state’s Transportation Trust Fund, which pays for road, bridge, and rail improvements. Funding for property-tax relief remained flat, and the budget will let a 9 percent New Jersey Transit fare hike go into effect.

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Democratic Budget Plan Likely to Raise Christie’s Ire -- and Veto Pen

 

Sweeney and Dems build a budget that boosts funding for pension payments and adds money for education and family planning

Christie is also likely to reduce funding for the public-employee pension system down to $1.3 billion, the total he included in the $33.8 billion budget he proposed in February. Democrats, using more than $1 billion in revenue that would be raised from increasing taxes on corporate earnings and personal income over $1 million, put $2.8 billion for the pension system in their budget. And a separate piece of legislation also approved yesterday would appropriate another $300 million for pensions from the current fiscal year, which ends June 30.

The pension issue has been a key one for Christie since he took office in early 2010, and it will likely be heavily scrutinized if he becomes a viable candidate in the GOP presidential primary. Christie enacted separate pension-reform laws in 2010 and 2011 and afterward held up those efforts as a national model for other states struggling with heavy pension debt; New Jersey’s pension system has an unfunded liability measuring at least $40 billion.

But last year Christie reversed himself on a major component of the reforms, deciding not to increase state contributions to the pension system after New Jersey failed to produce the budget growth that was expected when Christie and Democratic lawmakers committed to making the bigger payments. In response to the cuts, the state suffered several downgrades by major Wall Street credit-rating agencies, but Christie cast a state Supreme Court decision released earlier this month that upheld his right to reduce those payments as a victory.

Democratic lawmakers in the State House yesterday said they were being responsible by putting the additional revenue from the proposed tax increases into the pension system.

“This is a budget that meets the state’s responsibilities,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen) during debate on the Senate floor yesterday.

“There is no excuse. The state should balance its budget and pay all of its bills,” Sarlo said. “I think it’s a solid fiscal plan.”

But Sen. Anthony Bucco (R-Morris) said raising taxes doesn’t provide a long-term fix for the pension-funding issue -- costs are projected to increase for several more years according to actuaries -- and will have a significant impact on the state’s economy.

“It is our responsibility to pass a budget that serves the interests of all New Jerseyans, not just the public sector,” Bucco said. “New Jersey residents who are in the private sector are equally important and vital to our state economy. They need to be supported also.”

The debate in the Senate went on for nearly an hour before the budget passed 24-16 along party lines.

The budget discussion in the Assembly, meanwhile, got started much later in the day and lasted much longer. And with all 80 Assembly seats on the November ballot this year, the debate also drifted into political messaging at times.
Democrats said the issue came down to living up to the funding promises that were made to public workers, who they noted have also been paying more for their pensions as a result of the reforms. But Republicans said the budget problems should have been solved with spending cuts instead of the tax hikes embraced by Democratic leaders.

“The fact is, they didn’t take the hard choices, they took the easy road,” said Assemblyman Anthony Bucco Jr. (R-Morris).

Democrats countered that if Republicans wanted to reduce spending they should have sent them a list suggesting the areas to cut. And they noted that their budget, based on Christie’s original proposal, still leaves unresolved the other problems, including the gaps in funding for transportation and education.

“The question is, what is the alternative to the tax hikes? Shall we simply say we’re not paying the bills?,” asked Assembly Budget Committee Chairman Gary Schaer (D-Passaic.)

“We can no longer delude ourselves by postponing the inevitable,” Schaer said. “It’s not a perfect budget, but it’s a good budget.”

The Assembly vote ended up 47-31, also going along party lines.