Nearly 25% of N.J. Residents Lived in Poverty in 2010

This report is more realistic than the federal standard for measuring poverty – which I believe is outright ridiculous no matter where you live in the U.S. – N.J. defines being poor as making less than $36,620 for a family of three — twice the federal poverty rate. New Jersey has a higher cost of living than most other states particularly because our exorbitant property taxes, which also reflect on rental costs.

Nearly a quarter of N.J. residents lived in poverty in 2010, study shows | NJ.com.

There are a number of factors which have contributed to this imbalance in one of the richest states in the nation. But all the factors, fundamentally, find their roots in the complicity of the two dominant political parties in holding wages stagnant and fleecing the public. In other words: A lot of people, even those not comprised in the low 25%, are making too little money and paying too much to the political octopus that rules New Jersey.

Note that the 2000 or so government entities of New Jersey devour more than 10% of the state GDP of about $650 billion. And we do not even have defense expending!

This reality has had two major consequences after two decades or so:

1. A lot of people borrowed beyond their means to maintain the illusion of prosperity.

2. Disposable income plummeted and with it went aggregate demand, thus pushing the economy into an endless period of anemic performance.

Since government – and all its local subdivisions –  also borrowed left and right, New Jersey has entered a period when the high degree of leverage has the effect of quasi paralyzing both the public and private sectors. There are budgetary problems and people are taxed out. Even if millionaires are taxed, as the democrats call for, that additional revenue would amount to considerably less than $1 billion.

The millionaire surtax has become more like a political football to keep the masses distracted and pretend that there is a major difference between the two dominant political parties. It is theatre.

The democrat-proposed increase in the minimum wage – possibly to blunt my message because I am the first who has mentioned minimum wage in the last decade – would be the first in I-don’t-know-how-many-years and it is clearly insufficient to have any economic impact.

Both parties have proposed tax reductions: Christie his ubiquitous income tax across-the-board cut, which of course favors his political base, and the democrats their property tax cut. Both plans are better than nothing; the democrat plan slightly better. But the grand problem is that the state is not in a sound enough fiscal position to – responsibly – adopt either plan.

If a tax cut – any of them – is implemented, it will amount to a tax deferment rather than a tax cut. When such tax becomes due, 10, 20 years from now, it will also come with accrued interest so we will end paying more for this meaningless relief today.

While both political parties endeavor in buttering up the voters in back-to-back election years, I am presenting  – in this website – my program of reforms, which I believe are the minimum essential to save New Jersey.

Citizens of New Jersey beware: Our problems are complex. Any politician that presents a simple solution to a complex problem is eminently dishonest.

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Is Governor Christie a Leader or a Pusher?

He is certainly a consummate divider. Do we want 4 more years, after November 2013, of this mismanagement of the state? Or do we want the democratic opposition, which have been accomplices if not the protagonists in the undoing of the fiscal health and economy of New Jersey?

The tentacles of both parties are suffocating New Jersey.

New Jersey is still stuck in the 43-46 position in the national unemployment roster, tied with Florida, Georgia, and Mississippi. Christie is indeed pushing the state backwards.

Unemployment: Where does your state rank? – CNNMoney.

We have the highest property taxes in the nation. We can not have growth without significant reforms in our tax and political systems.

Of Home Rule in New Jersey

Home Rule is as old as New Jersey and the concept was borrowed from mother England and perhaps Holland. England had the counties and their respective counts which probably dated back to the Norman invasion of 1066. The system in turn was copied from the French who were the inventors of feudalism. In New Jersey, a colony with its vastness only sparsely populated by natives and even fewer colonists, small towns surged from the first settlements and by the time independence was gained from Great Britain in 1783, most of the system we have today was already in place.

Jump to 1947 and the Framers of the last State Constitution chose to maintain what we call Home Rule.

Jump to 2010 and I introduce my program which among other things, calls for the elimination of county governments, transferring all the taxing authority from the municipalities to the State (thus eliminating property taxes), consolidation of police forces and boards of education.

A few months later, governor Christie floated the idea of municipalities sharing services. He might not have been the first one who proposed this but he probably was the loudest. Nonetheless, with minor exceptions, his call fell on deaf ears and his tool-kit aiming to facilitate the process was for the most part ignored by the N.J. Legislature However he managed to pass a property tax cap of 2% although such cap caps nothing: It has a number of exceptions – the expensive ones – so it is pretty much meaningless as homeowners have discovered to their chagrin.

I don’t believe for a minute that I invented the idea of government consolidation nor was I the first discovering that the current system is untenable and that it places a tremendous burden on the people of New Jersey and the state economy. But I believe I am the first who has approached the issue with a radical plan which eliminates entire layers of government rather than executing flimsy unions of 2 or more DPW’s, fire or police departments, or some other local functions.

But moving on: The N.J Senate leader, Mr. Sweeney, has gone one step further and proposed an approach more Draconian that Christie’s although bland compared to mine: He has introduced a measure that would force local governments to share services or face a loss of state aid equal to the amount of the consolidation savings they passed up.

Sweeney has been pushing the shared-services agenda for some time. In October 2010, Sweeney spoke on the subject at a press conference with Assembly Speaker Sheila Oliver about arbitration reform, hammering away at municipal government. Quite simply, he said, there was too much of it. And he was ready to turn towns “upside down” to bring about some changes.

Such unions, where they have occurred, have clearly shown that they do not save much if anything at all.

But from Sweeney’s – or any other member of the political establishment – point of view, that is the ideal diversion because it places all the onus on the taxpayers, focuses on the lowest workers rather than on the political hacks, and maintains the huge mantle of government layers intact. No one; Not Sweeney, or Christie, or anybody else talks about doing away with the medieval relics of county governments. They know that the more government layers, the more opportunities to place political appointees in public jobs. For the two political parties, their ability to dole public jobs is the very essence and foundation of wealth and power.

What I propose is the only plan which would yield significant results rapidly: A constitutional amendment that would not touch the independence or identity of municipalities except for the fact that they would not collect property taxes any longer and their police stations would be manned by Police of New Jersey rather that the local police department, although the officers will be the same individuals.

I would propose the unification of all boards of education into a New Jersey BOE. If New York City can do it, so can we.

I would propose the elimination of county governments and the takeover by the State of New Jersey of county schools and hospitals. The county DPW’s would go under the NJ-DOT. The counties divisions of Taxation would remain as state agencies of the Department of the Treasury to collect some property taxes which would remain (Example: property owners who are not New Jersey taxpayers.)

With the abolition of property taxes and a tax credit for renters, inevitably, income tax would increase and so would be the tax on dividend that does not originate in economic activity in New Jersey. For more information please refer to my pages relevant to this topic in my website.

The typical property tax pie is roughly 25% for the town, 25% for the county, and 50% for the local board of education. If we want to achieve big relief, we must be willing to take big steps. For the political class, that is rocking the boat. But there is no choice: We must cast at least part of the political ballast over the side.

Christie Prepares to Second-Mortgage New Jersey

Christie faces hurdles over state budget plan : page all – NorthJersey.com.

That is what the proposed tax cut is: A mortgage, or rather another mortgage on New Jersey’s future, to be paid by this generation a few years down the road, or the next generation who are barely reaching the voting age now and still can not even buy a beer legally in the state.

Of course there are other mortgages on New Jersey: The Whitman Tax Cut bonds mentioned in the article above, other State bond issues, the underfunded Public Pension System, the unfathomable debt incurred by counties, municipal governments and independent authorities. The State of New Jersey has failed to fill the coffers of the Unemployment Insurance Fund, the Transportation Fund, and lacks any significant liquidity to spur economic growth. New Jersey, as its political structure exists today, lacks any capacity to maneuver fiscally: To clothe A, it must strip B.

It is economic growth that should be the center piece of any fiscal or tax measure. Considering the composition and structure of the economy of New Jersey, the first principal goal should be to raise aggregate demand. To increase aggregate demand, the fiscal or tax measure must be directed, primarily, to significantly benefit the lower and middle classes. That is simply because they are the majority of consumers.  The tax cut, as proposed by the governor, fails to do so. So does the democratic counter-proposal of applying an equivalent amount of money toward property tax relief. In the end, what ails both plans is their common point: They are too small. That is to say, too small to have any significant impact on the economy but they still create a hole in the budget.

Obviously Christie is covering all the political bases so he can further his political career. If President Obama is reelected in November 2012, it is very likely that Chris Christie will be among the republican contenders for the White House in 2016. However, if either Romney (the money) or Paul (the ideas) – the only two republicans that have a chance to beat Obama – is elected in November, it is rather unlikely that Christie will challenge a fellow republican in the 2016 primary. In that case, Christie will most likely run for re-election in New Jersey, 2013.

I do not expect that Romney will select Christie as VP. A republican presidential ticket formed by two moderate conservatives from the Northeast may not gather the necessary support from conservatives from the South and Midwest to have any hope of victory in November.

That is why the proposed tax cut. Christie is trying to butter up his base of donors/voters to keep all his options open. It is the typical move of a career politician. Christie may not be very competent at governance but he certainly is competent as a politician.

There is always the possibility that the growing economies of the states which surround us may rub some of their growth on New Jersey and our tax revenue may increase somewhat. Perhaps our higher than average unemployment rate declines as well. But until there is a certainty that those things are occurring, the governor should postpone any proposal for tax cuts which from an economic point of view are useless. I do hope that such a prudent retreat from the reckless proposal of the State of the State address is what we will hear from the governor on February 21.

Christie Claims Abbott Districts Get 70% of the State Aid

PolitiFact N.J.: Chris Christie claims former Abbott districts get 70 percent of the state aid | NJ.com.

The real figure is around 60%. So where is the great revelation in Christie’s statement? The Abbott districts are urban with a higher density of people and therefore a lower property tax per/capita. It is mathematical: They have more students per square kilometer, higher population density, overcrowding, whatever form we want to put it. They raise less money in property taxes for more students than suburbia.

Then they may have more special ed. and second language students too. May be there is more bureaucracy, political corruption, and more students repeating grades, etc

Christie makes it sound like he invented the wheel. What the court has done is to force the state to make up for that deficiency caused by higher density and the other factors above. The court is enforcing a constitutional clause.

That is why property taxes are an anachronism and should be replaced with the income tax. There would be no Abbott’s then. All districts would generally get the same amount of funding per student.