I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Friday, July 9, 2010

Bust a cap in your...

Here's my takeaway on all this:

Unless I am really misreading the bill - and I know there's a good chance I am - this whole thing changes nothing for school districts regarding annual school budget votes:

- You still have to submit your budget to the voters, whether it's above or below cap.
- If it's rejected, it still goes to your town council or whatever governing body you have for adjustment.

I've always felt this was unfair and a conflict of interest: less money for schools means more money for towns, so there is an incentive to town leaders to cut school spending and take more property tax money for the town's needs.

But even more to the point: this bill does nothing at the state level - nothing - to address the cost drivers for school districts or towns:

  • It does nothing to control health care costs
  • It does nothing to control pension costs
  • It does nothing to control special education costs
  • It does nothing to control energy costs
  • It does nothing to control insurance costs
  • It does nothing to force consolidation to rein in administrative costs (granted, it does encourage consolidation, but it does not force it)
  • It does nothing to cut back unfunded state mandates
"That's why we need the toolkit!" say the governor and his minions. Here's a pretty good summary of the toolkit - what do you see that addresses any of the above? Maybe #19, but does anyone think the state's going to be ponying up for expenses like NJASK testing any time soon?

The "toolkit" is about one thing and one thing only - reducing public workers' pay and benefits. We have been made the villains in all of this: not health insurers, not energy companies, not Wall Street, not the hacks who screwed up the pension.

So I don't want to hear from Christie again about how much he loves and values teachers, and he only has a problem with the union. This is a clear path toward cutting - not reducing the rate of increase, but cutting - our salaries.

The problem is this: it won't be enough. You can gut public employee salaries, slash benefits, destroy the pension - it won't be enough to either get us out of our hole OR cut taxes for the average family in NJ. Why?

Because we still fund our schools and towns primarily through property taxes.

We have the 3rd highest property taxes in the country, but we're 31st in state and local revenue as a percentage of personal income. You can cap tax levies all you want, but that won't change this fact. You can cut school spending and town spending and pensions and salaries and give public employees crappy health care, but it won't change this fact.

Look, I'm not saying there isn't room for spending reform (although I am saying it's stupid to think that towns are going to be achieve much more in meaningful savings, even with a "toolkit" - that's got to be the role of the state). But as long as we continue to rely on local property taxes to fund so much of our school and municipal needs, we can cut and cut and cut and we'll still have high property taxes.

Property taxes are inherently regressive and put more of the onus on the middle class - the ones who rely on public education and municipal services the most. New Jersey has an unacceptably regressive tax structure, and it's been made even worse by the repeal of the millionaire's tax (don't even try to tell me Christie didn't "technically" repeal it - he did). We give up at least $15 billion a year in revenue, and many of those tax breaks go to corporations and the wealthiest people in the state.

So you can put this on the shoulders of pubic workers - plenty in the millionaire celebrity press corps are happy to do so. But you're a fool if you think destroying our teaching corps - let alone the rest of our public workforce - is going to take the burden off of the middle class of this state. The crux of the problem we have in NJ is a regressive taxation system.

It would have been nice to have had someone - anyone - in Trenton point this out, rather than rolling over for Christie on this cap.

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