Steve Fulop's callousness on state aid and property taxes
I think it's going to take a lawsuit. Municipal pols answer only to the voters in their own towns. State pols pander to the towns with the most voters. The only branch of government where an equity argument might be considered on the merits is the judiciary.
breal said:
I think it's going to take a lawsuit. Municipal pols answer only to the voters in their own towns. State pols pander to the towns with the most voters. The only branch of government where an equity argument might be considered on the merits is the judiciary.
Pretty much. Though it'll be a tough sale considering we have (relatively) high incomes around here.
When I was on the Board we looked into the possibility of a lawsuit and concluded at the time that it would not fly. The only constitutional right implicated is the right to a "thorough and efficient" education and there's no plausible argument that kids in SOMSD are not getting one. This is not like the original Abbott case where students were obviously receiving a vastly inferior eduction than their suburban counterparts. An equal protection argument is doomed, as there are simply too many rational bases to claim as a reason for the current system. Finally, as inequitable as the system is, a wealthy upper middle class community like SOMA is not going to get a lot of sympathy in court.
Maybe if property tax payors in our "wealthy upper middle class" district (with 3 or 4 Title One schools last I checked) could stop subsidizing 2 years of free pre-k for the investment bankers' children in JC, and stop subsiding Mayor Fulop's property taxes, we could help the approx 30% (?) free lunch kids in our own district get even one year of free pre-K. Maybe if Chase Bank of Jersey City paid its share of JC school taxes, JC schools would need less State aid. I do not feel charitable toward Mayor Fulop. I do not feel charitable toward Chase.
For decades, now, govt housing policy has tried to break up concentrated poverty in cities by migrating low income families to inner ring suburbs. And for decades now, the money, apart from housing subsidies, has not followed the school children in those families. It should. We could really do a lot with that money to try to lower the achievement gap.
I'm not convinced that a lawsuit has to be successful in the courts in order for it to help the SOMSD. A lawsuit would generate research, publicity, and attention to our plight and then, possibly, a solution.
---
I have been doing a lot of research of my own lately into the Abbott lawsuit and its effects and I am more convinced than ever that the Abbott lawsuit was misguided.
Jim Florio had originally wanted to give the poorest districts in NJ money to bring their spending up to about the 60th percentile, but the NJ Supreme Court ordered that spending be brought up _ABOVE_ what the wealthiest districts spend. Florio had wanted to treat all low-resource/high-needs districts equally, but the Abbott lawsuit only gave additional aid to the 28 (later expanded) districts that participated in the Abbott case. Florio and the legislature had wanted to calculate aid based on the actual costs to run a school, but the Education Law Center and the NJ Supreme Court said that the aid should automatically equal whatever the highest-spending districts were spending, even if those districts were spending it on astroturf and other fancy stuff. Had the New Jersey Supreme Court respected the executive and legislative branches the state's property tax and school budget picture would not be as bad as it is.
The Education Law Center and the NJ Supreme Court were wrong about the importance of money to academic success. If you compare test scores in the Abbotts with the brutally underfunded and high-poverty districts that didn't participate in the lawsuit, such as Guttenberg, Prospect Park, East Newark, and Belleville, you will see that there are no wide differences or any differences.
I am NOT saying that money doesn't matter. In fact, I badly want the underaided non-Abbotts to get more money, but there is a point where more money produces diminishing returns and the Abbotts are beyond that point.
For instance, in Guttenberg 82% of students are FRL eligible. Guttenberg isn't an Abbott and its per student spending is $11,116. Jersey City’s (75% FRL) is $17,859. Hoboken's (49% FRL) per student spending is $24,000. Union City's (95% FRL) is $17,400. Harrison's (81% FLR) is $16,600. West New York (data incomplete, but prob 82% FRL) is an Abbott, but it only spends $14,800 per student.
Guttenberg gets only $150,000 for Pre-K. Probably enough for ten kids. In the Abbotts Pre-K money is universal even for the kids of investment bankers.
Despite the underaiding and underfunding, Guttenberg’s students perform at the 29th percentile in statewide academic achievement. Jersey City’s students score at the 26th percentile. Hoboken’s schools score at the 19th percentile. Union City’s are at the 28th percentile. West New York’s are at the 30th percentile. Harrison’s are at the 25th percentile.
North Bergen (61% FRL), where Guttenberg kids go to high school, also outperforms the Abbotts. Its students score at the 38th percentile.
Belleville is "only" 60% FRL-eligible, which is lower than most Abbotts, but it only spends $10,800 per student. Despite that its schools still perform at the 27th percentile.
Even one of New Jersey’s most underresourced districts, East Newark (88% FRL), does not lag that significantly behind the Hudson County Abbotts. East Newark only spends $9,980 per student and desperately needs more aid. However, even with that shameful underaiding, its students still scores at the 20th percentile. This is not good, but it is significantly ahead of the highest aided Abbott, Asbury Park, which spends $28,229 per student, and yet whose schools are at the 1st-3rd percentiles.
Prospect Park is also low-resource/high-poverty and it is also at the 19th percentile. This is better than Neptune, Long Branch, and Keansburg. (I don't have the time to figure out the academic achievement in the big Abbotts like Newark, Trenton, Elizabeth, Paterson, and Camden.)
I want to pull out Hoboken's scores. Hoboken's 49% FRL rate is barely above the state average and it is one of the highest spending districts in the country. If Hoboken students do that poorly compared to poorer kids in schools that sometimes spend half of what Hoboken does, I can't help but think that the Education Law Center and NJ Supreme Court exaggerated the importance of money. (The state has to do something about Hoboken's segregated charter schools, but even with middle-class kids disproportionately going to charters there, a 49% FRL rate in the public schools is not that extraordinarily high.)
JBennett said:
In the Abbotts Pre-K money is universal even for the kids of investment bankers.
This kind of assistance should be based on the incomes of the individual families rather than the income profile of the municipality. If that were the case, then SOMA would get more assistance, for our poorer families, and the JC folks who NEED it would still get the support. But how to get that implemented???
sac said:
JBennett said:This kind of assistance should be based on the incomes of the individual families rather than the income profile of the municipality. If that were the case, then SOMA would get more assistance, for our poorer families, and the JC folks who NEED it would still get the support. But how to get that implemented???
In the Abbotts Pre-K money is universal even for the kids of investment bankers.
I agree 100% with you that this kind of assistance should be based on income of the parents, not income of the municipality. Yeah, it'd be great if Pre-K could be universal, but since the state has limited resources, that's impossible for the time being.
SFRA was supposed to give free Pre-K to all children living in districts with more than 40% FRL rates, but then the recession hit, the pension tsunami rose up, and the plan to expand Pre-K was abandoned by Jon Corzine before it even got off the ground. As of 2015 the Abbott districts get 90% of all Pre-K money and Jersey City alone gets more Pre-K money than all the non-Abbotts combined. ($67.5 million)
As NJ's pension crisis actually hits the state starting in ~2020 (when the first pension fund zeros-out) there are sure to be cuts to overall state aid. In this environment the Pre-K guarantee in the Abbotts becomes extremely troubling. For 2015-16 Jersey City is getting another $2.7 million for Pre-K, even though the state could come up with only another $8 million in total Pre-K and K-12 aid. Jersey City's Pre-K population is expected to increase by another 25% in the next five years. If the increase in Pre-K money is proportional to the $67.5 mil JC already gets, that will be another $17 million.
$17 million isn't a huge amount compared to the overall state budget, but in an era when overall education aid is cut it is completely unfair and awful.
Everyone in NJ needs to WAKE UP about the fiscal crisis that is going to hit us. We are going to have to accept higher taxes too, but Abbott is unaffordable and it is sick of the NJ Supreme Court to take cuts to the Abbott districts off the table. It is equally sick of the state legislature to not update the list of Abbott districts.
Thank you, JBennett, for your thorough analysis of how school funding in our state grossly shortchanges our district while unfairly benefiting others. I think the only solution at this point may be to repeal Abbott and replace it with a funding method that reflects the current needs and realities of each district. Abbott has been a train wreck for SOMA. I have family in Neptune Township and Pemberton Township, both Abbott districts with plenty of middle class folks, and the Abbott spigot never stops. This may have been a good ruling at the onset, but it has long degenerated into a money grab based on bad politics, not to mention a building boom for the Abbott districts themselves. A petition, plus national coverage, are needed to address this shameful situation. The viability of our district is at stake.
Why would Education Law Center, for whom I have tons of respect, be against more equitable distribution of Abbott aid (and pre-K funding) to under privileged children ACROSS the state rather than limiting it to certain districts? Calculation of aid based on number (or a percentage) of FRL students in every district would benefit much greater number of kids in need. So what is their rationale?
xavier67 said:
Why would Education Law Center, for whom I have tons of respect, be against more equitable distribution of Abbott aid (and pre-K funding) to under privileged children ACROSS the state rather than limiting it to certain districts? Calculation of aid based on number (or a percentage) of FRL students in every district would benefit much greater number of kids in need. So what is their rationale?
You will have to ask the ELC why they take their stances, but here's an example of them attacking the state for being slow in finding places and money for _every_ Pre-K child in Hoboken.
http://www.nj.com/hudson/index.ssf/2013/07/every_pre-school_in_hoboken_school_district_must_get_a_place_education_law_center.html
Dozens of Hoboken parents who registered their 3- and 4-year-olds for pre-kindergarten in the city's public school system were surprised to receive a notice in the mail that said their kids have been placed on a waiting list.
"That's shocking," said Sharon Krengel, spokeswoman for the Education Law Center in Newark, a group that advocates for school funding and equal educational opportunities for all students.
Continuing:
“The state is ultimately responsible to provide the funding, including facilities, and temporary facilities if necessary, for every child that applies,” Sciarra said. “The district needs to go the state and provide state with information on how many additional children need to be seated. This is a state-funded program and additional resources might be necessary to meet that need.”
Continuing:
"Frankly, the state DOE is at fault here," said Sciarra. "If a district is putting kids on a wait list, (the state) should be telling the district they can't do it."
Shocking, she and the group's Executive Director David Sciarra say, because by law Hoboken -- one of 31 so-called "Abbott" district schools that receive special state funding -- must provide pre-K classes to everyone who registers.“A Supreme Court ruling made it clear there can be no waiting lists,” Sciarra said. “If additional parents want their children to attend pre-school, funding and space must be provided to accommodate the children otherwise their rights to attend the program are being violated.”
I don't even think this was the state's fault. It was up to the Hoboken BOE to find space for the kids. And yet, I don't blame the Hoboken BOE. Hoboken is in a baby boom. I'm not shocked that it's hard for the Hoboken BOE to keep up.
I am shocked, and so is everyone I talk to, that in NJ a child growing up in poverty in a non-Abbott gets NOTHING for Pre-K or that children of affluent households in Hoboken get two years of "free" Pre-K paid for by taxpayers, including the poor, living elsewhere?
I am also shocked that Hoboken gets $4200 a student (not counting PRe-K) when it is the highest ratable district in NJ. The SOMSD gets $600 a student. Bloomfield gets $3300 a student.
But have no worries!! Affluent parents in Jersey City and Hoboken have sympathy!!!
Check out this story about parents queuing up in line for "free" Pre-K in Jersey City!
The humanity of this parent is incredible!
Josh Bryant, a 39-year-old tattooed creative director at a publishing company, used to wait in line to see bands like The Clash.
"I sort of regret the fact that I am able to take two days off work to sit here. Not everybody can do that," said Bryant, who started waiting at 11 a.m. Thursday.
Josh Bryant, you are my hero! And here I was worried about poor kids outside of the Abbotts getting nothing! I was worried about my own ability to save for college+retirement while paying $16,000 a year for Pre-K! I feel so selfish!
http://www.nj.com/hudson/index.ssf/2015/05/jersey_city_parents_are_waiting_in_line_for_two_da.html
ELC's response to the specific situation in Hoboken could be due to several possible reason. But given their unwavering mission to bring educational equity to ALL children in NJ, it's hard for me to believe that they are OK with the children of wealthy Hobokenites getting free pre-K education when thousands of poor kids across the states aren't. Perhaps their strategic plan may be that, by getting the state to actually honor the Abbott agreement (which they know isn't a perfect system), they are trying to get the state to devote bigger slice of the public funds to public education and increase the chance of current Abbott districts continuing to be funded at current level but state aid eventually making its way to non-Abbott districts with significant FRL kids (like SOMSD) as well. Or they may be just being defensive, given that Abbott agreement has been constantly under attack, both directly and indirectly.
xavier67 said:
ELC's response to the specific situation in Hoboken could be due to several possible reason. But given their unwavering mission to bring educational equity to ALL children in NJ, it's hard for me to believe that they are OK with the children of wealthy Hobokenites getting free pre-K education when thousands of poor kids across the states aren't. Perhaps their strategic plan may be that, by getting the state to actually honor the Abbott agreement (which they know isn't a perfect system), they are trying to get the state to devote bigger slice of the public funds to public education and increase the chance of current Abbott districts continuing to be funded at current level but state aid eventually making its way to non-Abbott districts with significant FRL kids (like SOMSD) as well. Or they may be just being defensive, given that Abbott agreement has been constantly under attack, both directly and indirectly.
The ELC has staunchy defended the Abbott decision even after it's flaws and unaffordability became obvious to the rest of the state. The ELC opposed SFRA from the start and took its anti-SFRA crusade all the way to the NJ Supreme Court. Even in 2011, when the state had a $4 billion loss in tax revenue and the Abbott list was 30 years old and barely resembled the list of the poorest districts in NJ, they sued to prevent any cuts being made to any district, but their plaintiffs were still just the Abbotts. On their own website the ELC says:
In July 2010, ELC, on behalf of the Abbott Plaintiffs, filed a motion with the NJ Supreme Court to enforce the conditions established in theAbbott XX ruling, given these budget cuts. After oral arguments on the motion, the Court ordered an expedited hearing at the trial court level on the issue of whether districts could still deliver a thorough and efficient education as required by the constitution with the cuts in state aid. After two weeks of hearings, the Special Master in the case, Judge Peter Doyne, filed his report on March 22, 2011, finding unequivocally that schoolchildren across the state are not receiving a constitutional education.
On May 24, the New Jersey Supreme Court issued the Abbott XXI ruling, concluding that the State had violated its Abbott XX directive for full funding of the SFRA formula for the first three years. The Court also ordered the State to fully fund the formula for next year -- 2011-12 -- but limited the scope of the ruling to Plaintiffs, the 31 urban (former Abbott) districts. ELC had sought to enforce the full funding mandate for, at the very least, approximately 240 districts spending below the "adequacy" level set by the SFRA.
The NJ Supreme Court (in Abbott XXI) only ordered the cuts reversed for the Abbotts, an amount that cost the state $500 million.
One problem with the ELC is that they are blind to the recession and the pension crisis. If you read their newsletters and websites they repeatedly condemn Chris Christie for not fully funding SFRA without a single reference to the economic and budgetary situation.
The progress and performance of the Elizabeth Public Schools have made them a national model of a successful high poverty district. These hard-won gains for Elizabeth students are now in jeopardy, however, as the district faces painful budget cuts from Governor Chris Christie’s continuing refusal to provide the funding required by New Jersey’s weighted student formula – the School Funding Reform Act (SFRA).
Refusal? How is Christie supposed to fully fund SFRA when the state has $83 billion in pension debt, when we are $4 billion below the actuarial recommendation for what we should be putting in? The Judges' pension fund goes broke first in 2019-2021. The Teachers fund, the biggest, goes broke in 2027. Where else should Christie cut? Medicaid? Higher ed? Every governor has underfunded the state's ed formula, no matter what it is.
If we raise taxes for SFRA, how much room do we have to raise taxes for pensions? (which we are going to need to do)
I am not making a straw man argument about the ELC being indifferent to the state's economic problems.
Read this "Background: New Jersey’s Retreat from Funding Adequacy: 2009-2013"
Do you see the words "recession," "budget deficit" or any equivalent?
Background
New Jersey’s Retreat from Funding Adequacy: 2009-2013
In 2008, the New Jersey Legislature enacted a statewide, weighted, school funding
formula: the School Funding Reform Act (SFRA).1 The formula is driven by
determinations of the cost of resources for all students to achieve the state’s
academic standards, with the understanding that some students, including those
who are economically disadvantaged or who are learning English, are costlier to
educate. A central premise of the SFRA is that schools that serve larger populations of these students require a greater level of resources in order to achieve State standards. The formula delivers extra funding to school districts based on the number of students living in economic disadvantage, limited-English proficient (LEP) students, and students with disabilities enrolled in the district. If properly implemented, the SFRA would serve as a unitary system of school funding that is equitable and predictable....
Unfortunately, the SFRA has been consistently underfunded. In 2010, the New
Jersey Legislature adopted a budget for FY11 that cut over $1.1 billion, or almost
15%, in state aid from the SFRA formula. Subsequent budgets have failed to
properly implement the school funding formula, providing minimal and
unpredictable state aid increases that do not comply with the law. The Education
Law Center (ELC) estimates that New Jersey’s schools suffered an accumulated
funding deficit of almost $4.5 billion from 2010 through 2013.2
Due to consistent underfunding of the formula since 2010, many of New Jersey’s
school districts have funding levels that are further below adequacy than in 2008,
when the formula became law. This is the opposite trajectory of what the SFRA
promised. School districts are also facing rising costs, and many are experiencing
enrollment growth. These factors have left many district budgets well below what is needed to deliver State academic standards.
Brigit said:
Thank you, JBennett, for your thorough analysis of how school funding in our state grossly shortchanges our district while unfairly benefiting others. I think the only solution at this point may be to repeal Abbott and replace it with a funding method that reflects the current needs and realities of each district. Abbott has been a train wreck for SOMA. I have family in Neptune Township and Pemberton Township, both Abbott districts with plenty of middle class folks, and the Abbott spigot never stops. This may have been a good ruling at the onset, but it has long degenerated into a money grab based on bad politics, not to mention a building boom for the Abbott districts themselves. A petition, plus national coverage, are needed to address this shameful situation. The viability of our district is at stake.
I agree with this, especially, "I think the only solution at this point may be to repeal Abbott and replace it with a funding method that reflects the current needs and realities of each district." NJ did, however, do this in 2008 with the School Funding Reform Act (SFRA) (which the Education Law Center and every urban Democrat in the legislature opposed), but SFRA essentially Abbottizes the whole state and is hopelessly unfundable.
I also agree that the Abbott spigot never stops (or at least it didn't until 2013-14.)
From 1996-1997 (when comprehensive data becomes available) to 2000-2001 the state increased Abbott aid from $1.9 to $2.5 billion. Even the early 2000s recession put no dent in Abbott funding, with funding increasing even more rapidly as the Pre-K mandate kicked in, reaching $4.1 billion a year 2004-2005 and $5.1 billion now. From the mid-1990s to 2010, the percentage of state education aid going to the Abbotts rose from 45% to 61% even as their share of the state student population fell from 25% to 20%.
The Pre-K mandate is dangerously unsustainable. Jersey City gets $67.5 million now for Pre-K and is expected to have a 25% increase in Pre-K kids. That means that JC is going to get another $17 million at least at a time when other NJ school districts are probably going to lose state aid.
For 2015-16 JC is getting another $2.7 million for Pre-K. That might not sound like a lot compared to the whole state budget, but the increase for all state aid was only $8 million. That means that JC is nabbing a third of the increase.
Well, putting the "millionaires" tax back in place would would have generated about $800 million per year starting in about 2011. That would have been a good start. Raising the gas tax to rebuild our crumbling roads would have helped, too, as it would have improved our infrastructure and put people to work.
The millionaires tax is a possibility with a different governor. But Governor Peacelove Happy-Tree (D) wouldn't have the political will to try for a gas tax increase.
I just get tired of hearing we can't pay for these things when it's simply not true. We won't pay for these things and it goes back to the idiots who voted Florio out and Whitman in. I think that in addition to tax cuts, she promised everyone a pony.
Steve said:
I just get tired of hearing we can't pay for these things when it's simply not true. We won't pay for these things and it goes back to the idiots who voted Florio out and Whitman in. I think that in addition to tax cuts, she promised everyone a pony.
Steve,
No doubt there's a difference between "can't pay" and "won't pay," but it's up to the electorate to decide what the difference is. All of Florio's mechanisms to pay for Abbott, eg, the local assumption of pension costs by wealthy districts, the massive redistribution of state aid, and the tax increases were decisively rejected by the electorate and the NJEA and reversed.
Abbott *could* have been affordable if there had been caps or restraints on suburban education spending, since the amount of money the Abbotts got was set by average spending in 100+ wealthy districts. Local assumption of pensions and the redistribution of aid were intended not only to free up money for the Abbotts, but to restrain the suburbs. After the restraints were gone and the suburbs continued to increase education spending the deluge to the Abbotts became greater than it would have been otherwise.
Yes, Whitman is more responsible than any other governor for the pension crisis, but even though Whitman cut taxes, she still left them higher than they were pre-Florio. Pre-Florio the top rate was 3.5%. After Whitman's tax cuts were phased in the top rate was still above 6%. Also, this study gives the cost of Whitman's tax cuts at $14 billion over 10 years. I cannot find out how much money the Abbotts got in 1994 or 1995, so I can't do an exact comparison, but from 1996-1997 to 2005 the Abbotts got $26 billion in operating aid and $6 billion in capital money. They probably got $4 billion in the two years I don't have data for.
Whitman's tax cuts may have gone too deep, but Abbott spending also went too high. In light of the lack of difference in academic performance between the Abbotts and poor non-Abbotts, I judge the excessiveness of Abbott funding more harshly than I do the tax cuts. Also, the tax cuts were created by democratically elected bodies; Abbott was created by an extraordinarily activist Supreme Court led by Robert Wilentz. Everyone in NJ blames our governors for the pension crisis, but I think people are looking at the wrong branch of government.
Pre-Abbott NJ put $750 mil a year into the pensions. By 1997, when the Abbotts reached parity in spending with the suburbs the pension contribution was $100 mil. By 2001 the pension contribution was $0. I don't think that the the imposition of Abbott and the abandonment of the pensions was a coincidence.
JBennett said:
Pre-Abbott NJ put $750 mil a year into the pensions. By 1997, when the Abbotts reached parity in spending with the suburbs the pension contribution was $100 mil. By 2001 the pension contribution was $0. I don't think that the the imposition of Abbott and the abandonment of the pensions was a coincidence.
I don't think the connection between Abbott and the pension shortfall is a coincidence either. This is really scary stuff. A millionaires' tax might help in shoring up the pension fund in the short term, but we need a long-term solution to how we fund our schools. Now. Pretty much every governor since Florio has kicked the can down the road on this.
Brigit said:
JBennett said:I don't think the connection between Abbott and the pension shortfall is a coincidence either. This is really scary stuff. A millionaires' tax might help in shoring up the pension fund in the short term, but we need a long-term solution to how we fund our schools. Now. Pretty much every governor since Florio has kicked the can down the road on this.
Pre-Abbott NJ put $750 mil a year into the pensions. By 1997, when the Abbotts reached parity in spending with the suburbs the pension contribution was $100 mil. By 2001 the pension contribution was $0. I don't think that the the imposition of Abbott and the abandonment of the pensions was a coincidence.
And we talk about Greece. With the state pensions NJ managed to put itself in the same hole as Greece.
I don't see how the pension debt of 83 billion can possibly be resolved. That's about 9500 for every resident in NJ. A millionaires tax isn't going to fix that. And its getting worse year after year.
BG9 said:
Brigit said:And we talk about Greece. With the state pensions NJ managed to put itself in the same hole as Greece.
JBennett said:I don't think the connection between Abbott and the pension shortfall is a coincidence either. This is really scary stuff. A millionaires' tax might help in shoring up the pension fund in the short term, but we need a long-term solution to how we fund our schools. Now. Pretty much every governor since Florio has kicked the can down the road on this.
Pre-Abbott NJ put $750 mil a year into the pensions. By 1997, when the Abbotts reached parity in spending with the suburbs the pension contribution was $100 mil. By 2001 the pension contribution was $0. I don't think that the the imposition of Abbott and the abandonment of the pensions was a coincidence.
I don't see how the pension debt of 83 billion can possibly be resolved. That's about 9500 for every resident in NJ. A millionaires tax isn't going to fix that. And its getting worse year after year.
I agree.
What bugs me about the "Pension Blame Game" is that New Jerseyans have a way of "explaining" the pension crisis that goes like this: "NJ has a pension crisis because the governors underfunded the pension funds." Ok, isn't that circular logic? Isn't that like saying "She's wealthy because she has a lot of money" or "He's a good student because he gets good grades"? Also, governors aren't dictators of revolutionary states; they work in a political environment and have to deal with the legislature, the NJ Supreme Court, and the mistakes of their predecessors.
John Bury of the Bury Pensions Blog is an actuary and a bona fide pension expert. According to Bury, the pension plans now pay out over $9 billion a year and that's rising rapidly. Active employees contribute $2 billion. Localities contribute $2 billion. That leaves $7 billion that comes from depleting the saved assets in the fund. Once the funds zero-out there is no realistic way for the state to find that money for retirees without unprecedented service cuts and tax increases. The cuts and tax increases will force thousands of layoffs, send ripples through the economy, force more people to retire out of state, and be high enough to induce a recession and dig NJ's hole deeper.
Some people blame Whitman's tax cuts for the disaster. Yes, they play a part, but Whitman's tax cuts have already been cancelled whereas Abbott is still on the books. In 2011 (the Abbott XXI decision) the NJ Supreme Court disallowed the Abbotts from getting aid cuts along with every other district in NJ. The Abbotts still get 90% of NJ's Pre-K money.
Also, Whitman's tax cuts were proposed in her campaign and at least passed by normal legislative means with bipartisan support. The Abbott enabling legislation and tax increases were never discussed in Florio's campaign, were passed in a four week legislative blitzkrieg, passed the State Senate by one vote, and were a Supreme Court diktat.
Also, the Abbott decision has been shockingly ineffective. High-poverty/low-resource non-Abbotts like Guttenberg, Dover, Red Bank Boro, and Belleville match or outperform their higher-resourced Abbott peers.
Bringing this all back to Steve Fulop: I find it very disturbing that he shows so little awareness of how Abbott privileges enable him to pay a 1% property tax rate while people in the rest of the state pay dramatically more than that. If he doesn't understand Abbott, the origins of the pension crisis, and the state's insane distribution of school aid then he doesn't deserve to be governor.
JBennett said:
According to Bury, the pension plans now pay out over $9 billion a year and that's rising rapidly. Active employees contribute $2 billion. Localities contribute $2 billion. That leaves $7 billion that comes from depleting the saved assets in the fund.
If my math is correct that's $5 billion rather than 7, but what's a couple billion among friends? (Doesn't solve the issue, of course.)
sac said:
JBennett said:If my math is correct that's $5 billion rather than 7, but what's a couple billion among friends? (Doesn't solve the issue, of course.)
According to Bury, the pension plans now pay out over $9 billion a year and that's rising rapidly. Active employees contribute $2 billion. Localities contribute $2 billion. That leaves $7 billion that comes from depleting the saved assets in the fund.
Oops, too many huge numbers flying around and I messed up. The actual payout in 2014 was $9.65 billion, up from $8.71 billion in 2012.
But my bad math will be correct in only a few years.
I certainly agree that Abbott funding is a mess. I also think it was unfortunate that the "solution" was court-imposed rather than the result of legislative compromise. But the legislature has no one to blame but itself. The state of education in NJ's inner cities pre-Abbott was abysmal. Schools were literally crumbling. They were unsafe. Little or no education was going on. Tens of thousands of kids were being "left behind." No objective observer who surveyed the state of urban education in 1985 could conclude that inner-city kids were getting a constitutionally mandated "thorough and efficient" education. And, yet, the legislature, dominated by suburban interests, did nothing. Most city governments were corrupt, dysfunctional and with only a hollowed out tax base to rely on. The court was the only part of government willing and able to address the problem.
The legislature and various and sundry governors have had thirty years -- an entire generation -- to step up to the plate. They still haven't done so.
davidfrazer said:
I certainly agree that Abbott funding is a mess. I also think it was unfortunate that the "solution" was court-imposed rather than the result of legislative compromise. But the legislature has no one to blame but itself. The state of education in NJ's inner cities pre-Abbott was abysmal. Schools were literally crumbling. They were unsafe. Little or no education was going on. Tens of thousands of kids were being "left behind." No objective observer who surveyed the state of urban education in 1985 could conclude that inner-city kids were getting a constitutionally mandated "thorough and efficient" education. And, yet, the legislature, dominated by suburban interests, did nothing. Most city governments were corrupt, dysfunctional and with only a hollowed out tax base to rely on. The court was the only part of government willing and able to address the problem.
The legislature and various and sundry governors have had thirty years -- an entire generation -- to step up to the plate. They still haven't done so.
Stepping up to the plate doesn't seem to be a good move politically these days, in most cases ... sadly.
Clearly fault lies with the electorate, the electorate that wants to have everything and pay for nothing. It was not just the income tax that Whitman cut, she drove Florio out of office on the sales tax. As I recall, he raised it to 7% and that is what got him bounced out. Whitman brought it back to 6% and then followed that up with the income tax cuts and cuts to local aid. That's why we have huge pension liabilities and extraordinarily high property taxes.
Eta: what David Frazer said, too.
Don't worry guys, we've only got one, maybe two more boomer governors.
RobB said:
Don't worry guys, we've only got one, maybe two more boomer governors.
And then what will happen to fix all this mess?
For Sale
-
REVO luggage $100
More info -
2007 Honda Fit $4,400
More info
Free Items
Featured Events
-
Go "Back to the '70s" with The Maplewood Glee Club and Special Guests from CHS
May 19, 2024 at 4:00pm
Advertisement
I can't really fault Fulop for fighting for as big a piece of the pie as he can get for his constituents. While in an ideal world he might adopt Jeff's magnanimous attitude toward the greater good, he'd be tossed out in the next election.
The inequitable school financing system in held in place by the fact that for every SOMSD that gets screwed there's a JC or Hillsborough who benefits. Politically, they cancel each other out. The only way to break the stalemate in my mind is through good ole fashioned legislative horse trading. If the Abbots, the rural districts and the Shore are going to take a hit, they are going to need to get something else in return on some other issue. Otherwise, why would their reps ever vote for change?