Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

[BK]

Governor Christie received nationwide acclaim for holding down taxes and limiting property tax increases to 2% - is now appearing to be a mirage.

The law that Governor Christie signed in 2010 - had a couple of extra clauses that are biting Property owners in the rear-end in 2012.
1. The new law exempt cost increases for health-care, pensions, debt service,states of emergency, and increased school enrollment.
2. Banking of Tax increases for years there is no increase - if you go two years without increasing taxes - then you can increases taxes by 6% in the 3rd year. Some Communities have discovered the best approach is to spent down the Town/City rainy day fund for 1-2 years and then hit the Property owners with a 5-6% Property Tax increase in one year. 2012 seems to be the year that lots of communities are in need of Property Tax increases of 5-6%.

ttp://www.northjersey.com/news/119579784_Town_creating_rainy_day_fund_for_future_ municipal_budgets_.html

From a New York Times article from 2010
"The new law exempts cost increases for health care, pensions, debt service, states of emergency and increased school enrollment. It also considers increases over three years, so that a local government that raises taxes by less than 2 percent in one year can “bank” the difference and exceed the cap over the following two years. Otherwise, the government would need voter approval to exceed the limit."

http://www.nytimes.com/2010/07/13/nyregion/13taxes.html

[wayiwalk]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

....and thank god for that!

I live in a very well run school district, and one of the best in the state, both in terms of performance and cost ($/student slightly below state average). However, upon entering the recession a few years back, we get hammered each year by the regulatory limits on increasing our school budget to cover the noted cost increases for health care, pensions, and increased enrollment (the other noted items don't apply to us). It hurts to enter tough times already lean - the law minimizes how much you can increase your taxes to pay for things that are out of your control.

With a combination of cuts in non-essential programs (ie, reducing the number of languages offered, reducing electives, increasing class sizes) the district has managed to squeek by.

In general the law tries to address these issues well....I'm pleased to see Christie and the legislature worked well to write a decent law, and that he was able to raise important issues (it is sound to fight "big education" on certain issues) and still alow for ability to increase taxes.

Face it, Christie is easy to hate for some - he's grossly overweight, a straight talker, intelligent, and republican. But I'd say if this country had a dozens of congressmen with his approach from both sides of the aisle tackling problems instead of ignoring them, we'd be better off.

[BK]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

wayiwalk,
I generally like Governor Christie. But, as you point out your school system is still struggling with Pension -benefits and wages that are unaffordable in the long run. The Governor did a good job at attempting to deal with the problem - but, ultimately hasn't he just kicked the can down-the-road? Any law attempting to really deal with the Public Teacher Unios would never have passed in the Assembly.

Perhaps the Property Tax bill is Gov Christie's - Romney Care moment. It was an admirable attempt that ultimately doesn't deal with the problem and conitunes to let the cost run ahead of what society can afford to pay. I suspect we disagree and I'm regularly wrong.

Most Communities in New Jersey are headed for a Greece moment in the future - but, perhaps the Feds will find a few more ways to funnel cash to keep the game going.

[wayiwalk]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

"Most Communities in New Jersey are headed for a Greece moment in the future - but, perhaps the Feds will find a few more ways to funnel cash to keep the game going. "

That probably depends on who the next president is....

My perspective on NJ school costs is skewed by the fact that I spent most of my life on Long Island....where teachers do REALLY well, both salaries and pensions.

You look online at teachers salaries in NJ, and especially in my district - and I can't see how teachers in the ranges they're paid can also live in the state, unless they're married and their spouse works.....not that I'm much better off

Agree- it may be a Romney care moment. He's got a leg up on Romney in that he is a heck of alot more fun listening to him.

[photon555]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

Isn't all of this moot? The system has reached the inevitable consequence of basing a monetary and economic system on debt. I thought that this is what iTulip is all about, a debt based system is unsustainable. The only question is how long can the Fed and the Treasury string out the crash so they can claim a "soft landing". Unless, of course, another major war is in the works.

[don]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

Isn't all of this moot? The system has reached the inevitable consequence of basing a monetary and economic system on debt. I thought that this is what iTulip is all about, a debt based system is unsustainable. The only question is how long can the Fed and the Treasury string out the crash so they can claim a "soft landing". Unless, of course, another major war is in the works.

Aka the neoliberalism endgame. Local politicians can put their spin on the Neo apple but fruit, in the end, is only fruit . . . . leave the meat to others.

[gnk]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

A few years ago, a brother of mine told me that there was a facebook page from our elementary school in NJ. I checked it out to find one post made by some kid referring to the same gym teacher (recently retired) I had 30 years earlier as "Dr." Why was he a doctor and why did the students call him Dr. instead of Mr. (Mister)?

I'll tell you why. In NJ, each degree earned by a public school teacher comes with a corresponding increase in salary. This gym teacher probably took a bunch of courses and over a good part of his career earned some sort of doctorate. At the time I found a website that has all public employee names and their pension payouts. I found this gym teacher and to my surprise, he is earning a $90,000 a year pension and health benefits. Of course, he will get social security as well.

If you work in the private sector, I hate to say it, but you're a sucker. This guy is making a 90K pension for gathering kickballs and jump ropes. A babysitter, of sorts. Sorry if I offended anyone. I respect teachers, but there's a limit to how much they should be paid.

I won't even begin to mention in detail the typical NJ school system bureaucracy and duplication of positions that are well over 100K a year. No surprise that NJ has the highest property taxes in the US. Are NJ schools great? On average, I think so. But that success is not entirely due to property taxes alone. There is a lot of waste.

[BK]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

Teaching kickball - is dangerous work!

[wayiwalk]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

As far as NJ public pensions are concerned - the system was ripe for abuse. I thnk all public pensions should be capped.....not sure the right number, but something like $50K with COI adjustments would be more than enough for a taxpayer paid 25+ year vacation :-)

[thriftyandboringinohio]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

As far as NJ public pensions are concerned - the system was ripe for abuse. I thnk all public pensions should be capped.....not sure the right number, but something like $50K with COI adjustments would be more than enough for a taxpayer paid 25+ year vacation :-)

Seems to me that all defined-benefit pension plans both public and privater are abused. The public ones are over-promised and under-funded, with a dose of larceny by financial consultants who hoodwink the bumbling govt managers for fat fees. The private pension funds are over-promised and under-funded, with a dose of larceny by corporate raiders who plunder the pensions and dump the obligations on the taxpayers at the Pension Benefits Guarantee Corp.

Your solution is as good as any, so long as what is promised to the employee is actually delivered.

[dcarrigg]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

Your solution is as good as any, so long as what is promised to the employee is actually delivered.

Why deliver it when you can reneg on any deal with no consequence? The employees have no legal recourse, that much is clear.

If you're in the top floor corner office, it's better to put a pension as a significant component of a "total compensation package" knowing you never intend to pay it. That way there it looks like you're generous and you can attract better workers with worthless paper. Besides, you'll be out of there before it really hits the fan anyways.

Plus when you go to take away the benefits you contracted out to employees, you simply have to whip the 401(k) employees into an anti-pension frenzy after they get hosed by the market. That's why you spin-off a 527 from a trade organization and call it "Taxpayers for a Better Tomorrow" or some such thing.

All the while, you keep raising the salary and benefits of the top brass (be they C-level officers or elected officers), exempting them from the process. Low interest rates will let you claim a high "unfunded liability" and pull a chapter 9 or 11 just in time to reneg on everything and still get out with a golden parachute or a sweet consulting gig.

It's pretty easy to do. It'll be legal (but, just to be sure, they won't touch the judges' pensions). It'll be popular. It scares people. And it splits the public right down the middle. As long as you can keep the civil servants, the private-sector bureaucrats, and the actual small-business owners fighting amongst themselves, you can rob them all blind. If the public opinion moves against you, just exclude a couple more groups (cops are a good choice - you don't want them turning on you) from the pain...for now.

So far it seems to be working quite well.

I will make this prediction for all of you right now.

When they take pensions away, your property taxes continue to increase.

It'll work just the same as the auto industry. You'll cut pay in half, strip pensions, and somehow still come out with a product that's more expensive and less reliable than ever before. And you'll still be bankrupt in a few years.

That's because instead of:
- providing a quality product or service (even government),
- finding legitimate ways to increase quality and keep costs down, and
- looking to expand opportunity

You focus instead on:
-lawyering,
-gaming the system, and
-clawing back liabilities from the balance sheet.

It means you took your eye off the ball. It's corrosive to organizational culture. It destroys any organization that becomes obsessed with it.

Let's look at the local/state example.

Despite ZIRP and "unfunded liabilities" (a.k.a. a projections by pencil-necks about what will happen 30 years from now based on divining what the fed will set interest rates at), pensions aren't the biggest force driving the state/local budget gap today. It's healthcare. It's Medicaid. It's reduction in local aid to cities and towns from states as Medicaid grows to gobble everything up.

What are they doing about Medicaid? Nothing. What are they doing to provide better services? Nothing. Because they're busy taking away pensions. The eye is off the ball.

The biggest rise in personnel costs in both the public and private sector in the U.S. is healthcare, not retirement.

If an organization has had bigger growth in retirement costs than healthcare costs, then it hired some really, really poor investment managers. And whose fault would that be?

And for those of you who would tell me that unfunded liabilities are a real number, ask yourself why they haven't calculated the "unfunded liability" of healthcare costs for an organization's employees or for Medicaid over 30 years based on current growth rates. Let them show you how big that hole is compared to the pension hole. It'll be like pulling a skiff up to an aircraft carrier. We're talking somewhere in the ballpark of $25 trillion mark by the 30 year out mark - more than half of U.S. future annual GDP at 4% growth for Medicaid alone. A quarter of the economy just for healthcare.

Obviously that ain't happening. But I'm sure I could find an actuary to insist on it if they weren't busy calculating unfunded liabilities of pension funds.

So, as long as we're gaming the system instead of providing better products and services, what is promised to the employee will rarely actually be delivered. After all, we're trying to game liabilities off the balance sheet for a living. This is especially true as long as the law says its okay.

Bankruptcy, rather than being a fair negotiation, benefits only the powerful now. It works one-way only.

You can't get out of student loans, but you can get out of either public or private contractual obligations to employees. You can even take all the money that they paid in as payroll deductions over decades. Maybe if you're in a bad spot you'll have to "vest" them in a system that still pays out a fraction of what they paid in, but you can claw most of it back if you cry poor enough.

Lady Justice might be blind, but she sure can feel the fat cats tip those scales.

[charliebrown]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

Its a pleasure to have you back DC. Given the history of pensions over the last 30 years, I really think they need to be sun-setted. They are a good idea,
but the people who run them cannot be trusted, either public or private. With a retirement savings account in each person's name, at least I know the principle can't be stolen.

The Dr. Monopoly has to be broken. There are many times I and my family go to see a Dr. for a school physicals, adjust a maintenance med, need some anti biotics,
etc. Dr. visit now costs $150, and add the inflated meds on top of that. Some sort of Dr. Jr. could do this. In fact for my meds, I can self adjust, I just can't
write my own script. Sometimes the take care clinic at Walgreens works, sometimes it doesn't. When my kid got a sinus infection the bill was something like, 400 bucks. Two office visits, and two price inflated bottles of anti-biotics.

This might have a good effect on the insurance industry also. If simple med visits go down in price less people will file claims for simple visits and we cut mr. insurance
man out of the loop too.

[photon555]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

In 1973 my wife had our first child in Springfield, MO. She was in the hospital for five days because her doc was old and old-school, and used general anesthetic on her. But the point is that those five days cost us about $360; yes, that's right, for less than you can get an aspirin in an ER today, my wife spent five days in the hospital in 1973, including a labor room for about a day, and the delivery room. No wonder citizens aren't having as many children today as then; we had five children. Of course, if you are illegal or legally broke(on welfare), your hospital bill is given to those who work.

[dropthatcash]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

I live in Michigan and we could use the savings of cutting all teachers, cops and firemen to $100,000 a year. Typical cop makes $99,000 cash and another $35,000 benefits and teachers with a BA and by year 10 are getting $81,000 plus $39,000 in benefits on a contract required 945 hours. Total pay is $127 per hour worked. Can you say one percenters?

[dcarrigg]

Re: Gov Christie Tax Reformer Hoax- Property Tax Hike Banking

In 1973 my wife had our first child in Springfield, MO. She was in the hospital for five days because her doc was old and old-school, and used general anesthetic on her. But the point is that those five days cost us about $360; yes, that's right, for less than you can get an aspirin in an ER today, my wife spent five days in the hospital in 1973, including a labor room for about a day, and the delivery room. No wonder citizens aren't having as many children today as then; we had five children. Of course, if you are illegal or legally broke(on welfare), your hospital bill is given to those who work.

The latest figures I'm looking at show the welfare bill not too much bigger than the uncompensated care bill (people not on welfare who don't pay up...the state eats it more often than not). You can't ask doctors to turn ill people away. I'm glad about that. But we have to figure out a better way of paying.

My recent experience was totally random. A bill for $7.46 for the portion of a pair of crutches that wasn't covered after a surgery for a broken leg. If you pay for broken leg surgery, the cheapest crutches should be included, non? A bill for $1,100 for the anesthesia, because his rates were higher than your insurance co. accepted. A bill for $35 a visit from the PT guys, etc. Half the papers say "this is not a bill" until the collectors call. Nobody told you what any of this would cost before hand, or what your options and prices were because nobody knows any more.

I swear that the last time I was in the hospital (13 years ago) the bills were fewer, more simple, and more orderly. It's so opaque now that it's a gamble even with a working man's "cadillac" health insurance plan, that I am lucky to enjoy, and that costs $11k per year. Even at that price it has paid for 50% of its premium. God forbid the worst happen...

If the libertarians are true about wanting the "free market" to take over in healthcare, they'd better have a plan to come up with pricing and choices that patients and their families can look in the face and make hard decisions about. This probably includes something along the lines of the much reviled mythical "death panels" for it to work at all. But if one can die in dignity in ones eighties, maybe spending $400k to drag it out another week or two isn't worth it after all.

That's the meanest thing I've ever written here. I have strong feelings against writing it. But we may have to come to the point as a society that is similar to that nasty, horrible point many of us eventually have to come to as those with power of attorney over relatives. Sometimes one has to stop the tests and administer the morphine. It's ugly. It sucks. But it's reality. Ignoring a problem never makes it go away...

But the sound bite is so repulsive and reviling, and rightfully so, that we'll never get there the way things are now. It's such a difficult thing - such a hard question - that nobody wants to face it. But we will have to. I hope we can mature collectively before that time comes. We have but a decade or so as Americans.