What's Cerf's Story Today?

Chris Cerf wants to be the new Commissioner of the NJ Department of Education. Apparently, keeping your story straight day-by-day is not a job requirement:

NEWARK — A controversial consultant’s report recommending that some of Newark’s worst public schools be replaced with charter schools was funded by a $500,000 grant from a California educational foundation at the behest of Mayor Cory Booker.

The revelation came in an interview with officials at the foundation late Wednesday. It followed two days in which the mayor declined to provide details about the report: who funded it or the amount spent on it.

Contacted by the Star-Ledger, the spokeswoman for the Broad Foundation in Los Angeles readily acknowledged it put up the money that was used to retain Global Education Advisors to conduct an audit of the city’s schools. The spokeswoman said she wondered why the grant was kept secret. 

[...]

The continuing questions and new revelations about the ties between Cerf, his former consulting firm, and the mayor — drawn from state campaign finance reports and interviews with city advisory board officials and others — came as parents and educators continued to rally against the recommendations that would remake the city’s school system.

Cerf said Wednesday there was no conflict with his involvement with Global Education Advisors, or his support of Booker, and reiterated that he severed his connections as soon as he was nominated.

A spokesman for Gov. Chris Christie said Cerf fully disclosed his ties to Global Education Advisors and described his involvement to the governor’s office.

"He explained it to us during the vetting process and that he would be ending the association. We were completely satisfied by that," said the spokesman, Michael Drewniak. "It has no conflict with his nomination to be education commissioner."

However, Cerf’s public explanations varied from earlier statements just a day earlier, when he said he had done little more than lend his address for the incorporation papers.

But the S-L isn't even getting the full picture yet, because this isn't the first time Eli Broad and Chris Cerf have run in the same circles:

And to further prepare him for his new role, Cerf had graduated from the Broad Superintendents Academy in 2004:

THE BROAD SUPERINTENDENTS ACADEMY IS RUN LIKE AN EXECUTIVE TRAINING PROGRAM. PARTICIPANTS ATTEND EXTENDED WEEKEND SESSIONS OVER THE COURSE OF 10 MONTHS WHILE CONTINUING TO WORK IN THEIR CURRENT JOBS. IN ADDITION TO ATTENDING SESSIONS, FELLOWS WORK WITH A FACULTY ADVISOR WHO PROVIDES LEADERSHIP DEVELOPMENT, COACHING AND SUPPORT.

The Broad Academy was established by Eli and Edythe Broad; Eli is known as an autocratic philanthropist who uses his billions to influence education policy all the way down to the local district level. The Academy actively seeks to bring administrators into school districts who do not have backgrounds in education - a perfect fit for Cerf.

So Cerf was trained by the Broads to take high-level education policy positions. Later, they came up with the money for Cerf's firm to push charter schools in Newark, knowing he had once been the president of one of the nation's largest charter contractors, Edison Learning. Cerf took their money and then proceeded to write a report pushing charter schools. And now, thanks in part to his training with Broad, he is set to become the most powerful education official in the state, and establish those very charters.

And, for good measure, he threw in a hefty campaign contribution to the Mayor of Newark, just 'cause he likes him so much.

This stinks on ice. Why the hell is Eli Broad, sitting in LA, allowed to have so much influence over educational policies in New Jersey? Why is an outside consulting firm being used to dictate policy choices for the Newark schools? And why does the presumed Commissioner of the NJDOE keep changing his story?

Anyone who has studied Cerf's background could not possibly be surprised by all this. When he was caught in a conflict-of-interest scandal in New York City, he brushed the entire thing off, acting wounded that his good name was being questioned, all while being evasive. Of course, it didn't hurt for him that the investigation into his improprieties was heavily redacted when finally released to the public.

But even more troubling is Cerf's predilection for slipping back and forth between the private and public education worlds. Is there anyone who thinks this guy won't run off to a cushy job in the emerging education-industrial complex the minute his tenure at the NJDOE is over, just like Joel Klein, Cerf's former boss?

Cerf needs a hard, serious public vetting at his confirmation hearings. Democrats, are you up to this challenge?

One more thing: I have been very, very hard on the Star-Ledger in the past, especially when it comes to education reporting. But Bob Braun (who is on top of another important story about Christie's abuse of power), Jessica Calefeti, and the other staff members on this story deserve great credit for pursuing it. As do their editors.

"Trust Me"

So says Chris Cerf:

Q. Do you view your connection to GEA as a conflict with your present post? Do you see where it might create a perception of a conflict? If not, why not?
A. I do not see it as a conflict. My very short involvement occurred when I was a civilian and ended when I was a civilian. The only work I did in that capacity involved generating a fact base on which others might make decisions. I have no current interest of any sort in the organization. 

I believe the perception of a conflict, if there is one, is traceable in large part to a misunderstanding of the underlying facts and the manner in which the story was reported.  

I might note that I have been entirely open and transparent about my work on the diagnostic. I met with the leadership of the School Advisory Board to brief them and had numerous public conversations about the work and my role in it. [emphasis mine]

So, all you did was set up the premises on which future decisions will be based. No big whoop.

Again: Cerf has a long history of this. We have been warned.

For Posterity

Just have to mark this for future reference, because it's so friggin' great:

A Harvard business prof and a behavioral economist recently asked more than 5,000 Americans how they thought wealth is distributed in the United States. Most thought that it’s more balanced than it actually is. Asked to choose their ideal distribution of wealth, 92% picked one that was even more equitable.

Shirley Turner Gets It

It's really very simple when she explains it:

State Sen. Shirley Turner has proposed a bill that would permanently raise the tax rate on households earning more than $1 million annually.

For every dollar earned exceeding $1 million, Turner’s bill would raise the tax rate from 8.97 percent to 10.75 percent. The revenue generated from the extra tax would be dedicated to property tax relief.

Turner first proposed the bill last week, but it was formally introduced Tuesday – the same day Gov. Chris Christie gave a budget address in which he urged the Democrat-controlled Legislature to enact sweeping changes to public workers’ health and benefits.

“We want him to have his actions match his words in terms of shared sacrifice. Everybody’s got to share,” said Turner (D-Mercer). “It’s not just the middle-class and lower income people who have to sacrifice.”

Now that wasn't so hard, was it?

Rich, Lying, and Loving It!

Our lying governor went on to his favorite lying media platform to engage in some good old fashioned lying:

Visit msnbc.com for breaking news, world news, and news about the economy

Let me be the first to say how sorry I am that multi-multi-millionaire and Wall Street scumbag Jim Cramer has to pay property taxes on his huge Summit house with a private gym that are more than his mortgage. Of course, this parasite probably could have plunked down cash for the house - how big do think his mortgage really is?

But, hey, it's better than paying that old millionaire's tax, which was conveniently gutted by... wow, what a surprise - Chris Christie!

Now, we all know that the media is completely liberal, but is it too much to ask that the wealthy Mika Brzezinski, the very wealthy Joe Scarborough, the really wealthy Mort Zuckerman, or the insanely wealthy Jim Cramer call the very wealthy Chris Christie on his bulls***?!?!

Because if every teacher took a pay freeze and paid 1.5% into their insurance, it wouldn't have covered 1/4 of the aid cuts Christie made last year. (look at p.25 and 26)

By the way - all of us teachers took the 1.5% for health care. Nobody liked it - who would? - but we took it. So stop with the "go to hell" crap. We've given far, far more as a percentage of our modest wealth to this state than Jim Cramer ever did.

The entire interview is sickening. Aside from the expected ass-kissing, Christie has the gall to say that the rich are already paying too much in NJ.

Again: Christie's favorite radio station reported that the middle class hasn't made an extra dime over the past 20 years while the top 1% has raked it in. But the Guv thinks they are already sacrificing so much, poor lambs....

But the problem is public workers who want to take their kids to the doctor and not run up the credit card. This country has lost its freakin' mind.

Assumed Truths

It really drives me crazy when people can't get the facts right, but it actually makes me more insane when unproven - and even disproven - assumptions are considered to be assumed truths. Case in point:

When host Mika Brzezinski noted that other governors -- like Connecticut Gov. Dan Malloy -- were going to raise taxes, Christie was nearly dancing in anticipation.

“I'll be waiting at the border to take Connecticut’s jobs when he does it,” he said.

The assumption here - one that seems to be universally accepted - is that tax policy is enough to drive business away from one state or locality to another. And that any losses in revenue will be more than made up by increased business activity.

Where is the evidence that this is so? Because it seems like everyone in charge of a statehouse these days believes it:

It should come as no surprise that Republican governors are ruling out tax hikes. According to a Stateline tally, at least 11 new Republican governors - and one Democrat, Andrew Cuomo of New York - made campaign pledges not to raise taxes. Several other governors of both parties have announced no-tax-hike intentions in state of the state speeches delivered to lawmakers in recent weeks. 

More surprising is that GOP governors in Florida, Iowa, Michigan and elsewhere want to go a step further. In what is widely considered the worst year yet of states' four-year budget crisis, these governors are promising big tax cuts for businesses and, in some cases, individuals. The proposals reflect their conviction that one of the best ways to spur business growth and job creation is to reduce taxes for those who do the hiring.

OK, it's their "conviction," but where's the actual evidence?

One of my favorite books - and by that, I mean a book that makes my blood pressure skyrocket - is David Cay Johnston's Free Lunch. It chronicles, in nauseating detail, the political class's fealty to the premise that all business tax cuts results in economic benefits.

But the evidence is virtually nonexistent:

According to the Center on Budget Policy and Priorities, a Washington, D.C., think tank that is critical of broad tax-cut plans, only Ohio has done what Scott is proposing to do in Florida - completely phase out its corporate income tax. That makes Ohio a prime test case for other states seeking to cut or abolish business taxes in the hopes of spurring growth. 

Michael Mazerov, a CBPP economist, found in a September study that "despite a more than $1 billion annual reduction in business taxes, Ohio's shares of national income, employment and investment have all fallen slightly since 2005," when the phaseout of the state's corporate income tax began. 

Ohio tax officials concede that the plan has not produced a windfall of new business activity. But they are quick to point out that they never expected one, predicting beforehand that eliminating the corporate income tax would amount to a net loss in revenue for the state, at least in the short term.

At least they're honest about it, like David Stockman and Bruce Bartett owned up about Reagan's tax cuts not paying for themselves. You'd think there would be something to learn from that history - apparently not.

Seriously - where's the evidence? On what basis are we to believe all these business tax cuts will pay for themselves many times over; so much so that teachers should cut their pay by up to 30% to pay for them?

Maybe my good friends at the Tax Foundation would care to weigh on on this?

Tax Foundation! Tax Foundation! Tax Foundation! Tax Foundation! Tax Foundation! Tax Foundation!


Let's see if they come running...

Cerf's Up

Acting NJDOE Commissioner Chris Cerf has a conflict of interest? I'm just shocked:

NEWARK — A consulting firm hired by Newark’s mayor to overhaul the city’s failing schools was founded a few months ago by Christopher D. Cerf, the state’s acting education commissioner, and still lists his Montclair home as its New Jersey address.

The firm, Global Education Advisors, is at the heart of a controversial proposal to open nearly a dozen new charter schools — a move that would reshuffle thousands of city kids and one that has already drawn angry response from parents.

Cerf acknowledged Tuesday that he had a hand in the creation of the firm, but said he was no longer connected with it. He said he is now merely lending his address to the consulting firm because it needed a New Jersey mailing address. "When this little consulting company was formed, I was part of the creation of it," he said. "I severed my relationship to it literally right after its formation. I have never received any compensation from it."

He said he never did anything with the company. "I have no presence or association with it. I have never taken a nickel from it," he said. "I never actually did anything with it, so I’m not in any way, shape or form related to it."

He asked The Star-Ledger not to publish this story because he said he did not think it was very important.[emphasis mine]

He just wants to make sure the S-L isn't wasting their time. What a guy.

You know, I seem to recall something similar in Cerf's past...

The full report from the Special Commissioner of Investigation is here. Cerf solicited a contribution from an executive at Liberty Partners: the same firm that worked out the buy-out of Edison using the Florida teachers' pension fund.

Now, in fairness, the report also makes this point:

By subpoena, SCI obtained documents from Edison and Liberty pertaining to the

stock in the privately-held company. According to Edison's operating agreement and information provided to SCI by Edison's counsel, before Cerf could redeem his Edison shares, Liberty would have to sell the company at a profit. The attorney also asserted that Cerf's Class B shares were worthless. He explained that in the event that Edison was sold, the company's creditors and several categories of Class A shareholders would receive preferential payment before Cerf's Class B shares could be redeemed.

The report states, however, that Cerf knew his shares could have value in the future. It also describes a deal where Cerf would be paid as a consultant after leaving Edison as amends for not being paid when Edison was bought out by Liberty.

I'm hardly a financial expert, and it may very well be that Cerf's shares of Edison were as worthless as he claimed. What the report does make clear, however, is that Cerf considered the charitable donation to the Darrow Foundation - which supports a wilderness camp for children - to be a quid pro quo for giving up his interest in Edison.

It's also quite clear that Cerf gave up his interest only when it became evident that he was about to be publicly embarrassed. Unfortunately, given the large parts of the report that have been redacted, the entire matter is hardly clear-cut.

This guy is slicker than snot. If you read my full report on his past, you'll find - over and over - that he always manages to work his web of connections to benefit his buds and himself as he continues to slip back and forth between the public and private education sector.

Again, we are fast approaching the days where our education system becomes a feeding trough for corporate interests, just like our military. We cannot let the Chris Cerfs of the world start erecting Haliburton Highs all over this state at the expense of the taxpayers and our children.

ADDING: NJ Newsroom has more. They skimped on Cerf's NYC years - read the Jazzman, folks, I'll get you up to speed.

Slick Chris

Very, very slick:

Working the Numbers

Christie’s willingness to make a $506 million pension payment early stems partially from the fact that state tax revenues, particularly income tax receipts, are running $500 million ahead of projections through December. But it also seems to have political calculations.

Normally, a $1.112 billion increase in revenue to $29.4 billion caused by an across-the-board surge in income, sales, corporate and miscellaneous taxes would be regarded as an unmitigated triumph -- a four-year high that signaled that state revenue was finally bouncing back in the direction of the $31 billion and $32 billion marks topped in the first two budgets of the Democratic Corzine administration.

Even with a final reduction of $876 million in Obama stimulus money, next year's state budget would rise to $29.926 billion -- up from $29.692 billion for the fiscal year that ends June 30, 2011.

That, however, would require Republican legislators – and Christie, if he decides to jump into the Republican presidential race – to run on a state budget that would be higher in Fiscal Year 2012 than it was in Fiscal Year 2011.

By shifting the $506 million pension payment forward into Fiscal Year 2011 – even if, for example, the state makes the $506 million payment on June 30, 2011, rather than the following day on July 1 -- the size of the current year's budget would conveniently go up from $29.692 billion to $30.198 billion, while the size of next year’s budget would just as conveniently go down to $29.420 billion. (See the chart.)

That fiscal sleight of hand enables Christie to assert during his budget speech and in his official budget documents that his budget represented "a 2.6 percent reduction in year-over-year spending." [emphasis mine]

This is the "straight talking" governor who isn't going to resort to games and gimmicks to balance the budget.

And the notion that he will make a token payment to the pension - something he has to do anyway - only if public workers give up compensation that they were promised in good faith is laughable.

"Rich" Benefits

If I win the lottery someday, I won't buy a boat or a fancy car or take a world cruise.

No, I'm going to go crazy and buy my family some health insurance!

The governor conditioned a doubling of the middle-class property tax rebate, for example, on the passage of changes that would make public employees pay 30 percent of the cost of their health insurance, compared with an average of 8 percent that Mr. Christie said many now pay.

He also offered to make a partial payment to the state’s woefully underfunded pension system, but only if the system was overhauled to require bigger payments from workers, smaller payouts and an increase in the retirement age.

“Please, let’s not pick the special interests over our overburdened taxpayers,” Mr. Christie said during his budget address.

Mr. Christie said that even in Wisconsin, where Gov. Scott Walker’s proposal to cut the benefits and collective bargaining rights of public workers had set off a firestorm of protests, officials “have decided there can no longer be two classes of citizens: one that receives rich health and pension benefits, and all the rest who are left to pay for them.”

Nice - either you get your property tax rebates or my kid gets to go to the doctor. Way to pull us together, Guv!

Personally, I don't have a problem with a transition to a federal employee-style health insurance plan - IF I'm getting paid a federal salary. An employee beginning in, say, law enforcement can weigh the TOTAL compensation of a state or local or federal job based on both their salary and their benefits. I've tried to find some data on this (I'll keep looking), but it seems to me we'd be hard pressed to find FBI agents if state troopers were making the same salary but getting cheap health care. It just doesn't make sense otherwise.

This is why everything Christie talks about isn't a freeze for teachers at all - it's a cut, and a very big one at that.

The pension payment is a joke: half a billion doesn't address last year's reneging on the pension payment, let alone solve the problem long term. Christie talks about how unfair it is for the unions to have compulsory dues, yet teachers and cops and all public workers must pay into a pension that he won't even come close to fully funding.

You'll notice no one save a few yahoos on his side is calling for unvested workers to opt out of the system. The reason, as the savvy ones all know, is that those mandatory contributions are all that's keeping the current system afloat. Take that away and the pension goes bust. So public workers are forced into a system they are told is unsustainable; great incentive to stay in public service, huh? Will this bring in all of those great, new, young teachers we need, Derrell?

But there's always money somewhere for another tax cut:

Most galling to union leaders, who argue that the governor is using them as scapegoats for an economic crisis they say was caused by Wall Street millionaires, was Mr. Christie’s call for $200 million in new tax breaks, including an increase in the estate-tax exemption to $1 million, from $675,000. The governor said this would help small-business owners.

Let's be clear on this: the "rich" benefits we're talking about here are health insurance and a modest retirement from a system workers are FORCED to pay into. That, apparently, is far, far too generous for the people who teach our kids or run into burning buildings or put themselves in the line of fire every day.

Instead, we need to make sure those who inherit $900,000 pay as much in taxes as those who inherit $900.

Who, exactly, are the "special interests" that are causing all of our problems?

The Other White Meat

Bruce Baker's been posting some fascinating stuff on school budget "pork."

What is School Finance Pork? School finance pork is state aid that is currently being allocated to districts that otherwise don’t really need that aid. In this case, need is defined in terms of the needs of the students to be served AND in terms of the ability of the local public school districts and its residents and property owners to pay the cost of those services. In overly simple terms, some local public school districts can easily pay for the full cost of their needed educational programs and services on their own and with much less effort (tax effort) than others. Allocating state aid to these districts while depriving others with greater student needs and the inability to meet those needs is inexcusable. Cutting aid to needier communities who are unable to replace those lost revenues, while retaining aid to the wealthy is inexcusable. That’s PORK. And like other political pork-barrel spending, it exists because state legislators negotiate for state aid formulas that bring something home to their own districts.

I'm down with all that, but I do think there's a useful political function for pork:

Take Social Security. It would be very easy to classify it as welfare, except for the fact that everyone gets it. Making it universal allows it to gain political support I don't think it would have otherwise.

Same with pork: if you know you're going to get some money back from the state for your district, you're going to be less likely to think all state aid is just a big transfer of wealth away from your town's district over to someone else's.

Of course, the analogy breaks down in that both the SSI benefit and the tax are capped; still, I'd think getting more aid to districts with more poverty is harder when there are some more affluent districts that are not getting a thing.

I'm thinking we'll see whether I'm on to something as we watch the inevitable budget fight coming up in NJ. Will Christie's 1% back to the 'burbs be enough to stop a war with the cities?