The Right Choice For The Wrong Reason

The Governor is, by and large, a pretty predictable guy. Since the Governor is trying to fashion himself as a textbook conservative -- smaller government, no new taxes, family values -- it's usually pretty easy to guess where the Governor will land on any given issue.

$7.5 million for women's health? It was never going to happen, because there was a scintilla of a hint that the money would support (but not fund) abortions.

Millionaires' Tax? No brainer. It was never going to happen.

But this predictability makes the exceptions stand out all the more. It was surprising when the Governor dropped his insistence on a Constitutional amendment to cap property tax increases. Pragmatic and effective, yes, but surprising.

And when a pattern starts to emerge in the Governor's surprises, I grab onto them like tea leaves in a very dry cup. And here's what has my attention now.

1. After initially proposing to cut it, the Governor found $55.5 million dollars to fund the Pharmaceutical Assistance for the Aged and Disabled program. The money came from changes to Medicare Part D under ObamaCare, higher rebates from drug manufacturers to the State and increased use of generic drugs by seniors.

2. When 950 people were dropped from New Jersey's AIDS Drugs Assistance Program, the Governor found a way to replace the $7.9 million needed to allow these people to continue to receive their life-saving drugs, $2.9 million from a new Federal grant program and $5 million from additional rebates from pharmaceutical companies. While this proposal would cover AIDS drugs, it would not cover any other drugs AIDS patients may need to counter the side effects of treatment.

What do these two things have in common? On the political front, both moves by the Governor allowed him to score points against Democrats. One of the stated rationales for the Millionaires' Tax was to fund the Pharamceutical Assistance for the Aged and Disabled program. By finding the money for the program, the Governor removed that piece of the Democrat's argument.

The Governor's announcement regarding AIDS drugs came a day after Sen. Joseph Vitale, a member of the Governor’s Advisory Council on HIV/AIDS, issued a public statement asserting that the expected increase in pharmaceutical rebates would be enough to maintain the ADAP program, meaning that AIDS patients would continue to receive all their current medications. In making his announcement, the Governor accused Sen. Vitale of playing politics with people's lives, saying that had the Sen. picked up the phone to call the Governor, the Sen. could have saved the paper the letter was written on. Of course, if the Governor had told the Governor's Advisory Council on HIV/ AIDS that a fix was in the works, things also would have been different. And if the Governor had found the fix BEFORE sending out letters to patients telling them they were being cut off at the end of July, this whole brouhaha could have been avoided.

So, it seems that the Governor will find the money for pharmaceuticals if it means he gets to score political points against Democratic legislators.

Also, while women's health is a decidedly liberal cause, prescriptions for seniors is neither conservative nor liberal. So funding prescriptions for seniors is politically productive for the Governor. And support for AIDS patients plays well in communities of color and in the churches of Camden and Newark, where the AIDS epidemic is thriving in New Jersey.

So, it seems that the Governor will find the money for health care if it is for a key voting bloc, such as seniors and communities of color, but not for anything associated with abortion.

Another coincidence is how the Governor funded both initiatives -- federal funds plus pharmaceutical rebates. And in both instances, the Governor claims to have "found" new Federal funds and "negotiated" increased rebates.

But at least with respect to AIDS drugs, the increased rebates were negotiated by the National Alliance of State and Territorial AIDS Directors -- not the Governor. That's how Sen. Vitale and the Advisory Committee knew about them. And as for new Federal grants for AIDS meds, that was announced in early July. In other words, the Governor didn't do anything except admit that cuts to ADAP were unnecessary.

And with respect to PAAD, the ObamaCare money was available before the Governor decided to cut the program. I can't say for sure about the pharmaceutical rebates, but clearly to some extent the Governor merely acknowledged the existence of money he had previously chosen to ignore.

So, it seems that the Governor is not telling the truth about how he funded these pharmaceutical access programs, or why. And what remains totally unclear is why both of these "surprises" had to do with pharmaceuticals. I mean, isn't there anything else the Governor has found a way to save, something that does not rely on ObamaCare and pharmaceutical company rebates?

Personally, I'm happy that seniors are getting their PAAD benefits and that AIDS patients are getting some of the medication they need. I just wish that the Governor was doing the right thing for the right reason. Because being able to consistantly expect the Governor to do the right thing for the right reason would restore my faith in government, which is being sorely tested these days.

It's The Cover-Up, Stupid

It was just a few days ago that the results of Federal Prosecutor Nora Dannehy's investigation into the firing of 9 U.S. Attorneys closed up shop, finding no evidence of criminal wrongdoing.

Not so fast.

Questions about the report were immediate. Why did Dannehy only focus on the firing of David Iglesias, and not on the fact pattern(s) pertaining to all 9 terminations? Why didn't Dannehy investigate what the other U.S. Attorney's were doing to keep their jobs in the politicized environment at Justice under Alberto Gonzalez? And why was Nora Dannehy chosen to run this probe in the first place?

The answers to these questions are not pretty.

Four days before Dannehy's appointment by Attorney General Michael B. Mukasey to head the DOJ probe into the allegedly politically-motivated terminations, a Federal appeals court ruled that a team of Federal prosecutors led by Dannehy suppressed evidence in a political bribery case involving Connecticut Treasurer Paul Silvester. This ruling resulted in the reversal of seven convictions against Charles B. Spadoni. Spadoni still faced a charge for obstruction of justice.

Normally, a Federal prosecutor found guilty of suppressing evidence in a political prosecution, or any prosecution, would face some sort of internal investigation. But Dannehy was instead given a high profile national assignment. A national investigation into the firing of Federal prosecutors who refused to bring politically motivated prosecutions. And an investigations into the politically motivated prosecutions being brought by the Federal prosecutors who were keeping their jobs.

Simply put, Dannehy was assigned to investigate herself. There was no way she could implicate any Federal prosecutor for their conduct in political cases without implicating herself.

And in an odd coincidence, Dannenhy's supervisor on the Spadoni case, John H. Durham, was also appointed to run a national investigation by Mukasey -- the suspected destruction of dozens of recordings of interrogations of alleged terrorists by CIA personnel. Not only is that investigation still on-going, it has been expanded by Attorney General Holder to include DOJ decision makers.

Conventional wisdom since Watergate has been that it's not the crime that gets you, it's the cover-up. So now the question becomes whether or not Dannehy's investigation, with its extremely limited focus, was itself part of a cover-up.

And there are a lot of people who want to know the answer to that question. Former Alabama Governor Don Siegelman, who claims to have been the victim of politically motivated prosecution, wants to know the answer. Former Alaska Senator Ted Stevens wants to know the answer.

And right here in New Jersey, Louis Manzo wants to know the answer. Former Assemblyman and Jersey City mayoral candidate Manzo was indicted along with 46 others in what Manzo claims was a politically motivated case aimed at bolstering the campaign of then-candidate and Federal prosecutor Chris Christie.

And I'll bet Senator Robert Menendez wants to know the answer. Then Federal prosecutor Chris Christie brought an indictment against a Bergen county anti-poverty agency with ties to Menendez that almost threw the 2006 election to Tom Keane, Jr. Menendez wants his name cleared, as the investigation is over and no charges have been brought.

So it looks like a few people are asking what Chris Christie was doing that not only kept him in his job as a Federal prosecutor under Alberto Gonzalez, but actually got Christie appointed as a member of Gonzalez' advisory panel.

Does A Refusal To Indict Mean Everything Is Alright?

The U.S. Justice Department has issued a report on the firing of New Mexico U.S. Attorney David Iglesias. To be specific, the report looked for evidence of public corruption, obstruction of justice, wire fraud and mail fraud in the firing of 9 U.S. Attorneys.

The report, submitted by Connecticut prosecutor Nora Dannehy, found that Iglesias was fired for political reasons. The head of New Mexico's Republican Party complained to the White House about Iglesias' refusal to bring voter fraud charges against the liberal group Acorn and his refusal to indict a local Democratic official. Former Senator Pete Domenici also made calls to the White House to complain about Iglesias.

Initially, Justice claimed that it had fired Iglesias for poor performance, but internal White House documents proved this not to be true. Iglesias was removed without anyone at Justice bothering to figure out if Iglesias had actually done anything wrong.

But, concludes Dannehy, that's not a crime, and it was not an effort to influence prosecutions. Apparently, there were no prosecutions to influence. Also, there was insufficient evidence to charge anyone with lying to Congress or to investigators, or evidence of any indictable wrongdoing. Which is what happens when the most frequent answer given is "I cannot recall."

This report is relevant to New Jersey today because Chris Christie was a U.S. Attorney at the time Iglesias was fired, and he was also an advisor to Attorney General Alberto Gonzalez. As such, Christie had a front row seat to the politicization of the Justice Department, if not an active role. Certainly he had a role in announcing an investigation that hurt Robert Menendez in the final months of the 2006 campaign -- an investigation that remains open while never resulting in a single charge.

And as the Governor seeks to collapse all State investigative power into the executive branch, seeks to bring all county prosecutors under the control of Trenton, intimidates the Judiciary by refusing to reappoint Supreme Court Justices who won't promise to decide school funding cases in the way the Governor chooses, seeks to purge experienced school administrators from the public school system, seeks to destroy failing public schools and replace them with taxpayer supported private schools (secular and non-secular), and seizes control of one of the States premiere tourist attractions, it is important to remember that this Governor knows how to politicize what are supposed to be independent entities within the bounds of the law.

There is a difference between saying that there is no indictable crime and saying that nothing wrong happened. But our Governor does not appear to acknowledge that he did anything wrong, or saw anything wrong, in the Alberto Gonzalez Justice Department. That is evident in the way the Governor continues to use every State agency as a means to a political end.

And while that may not be criminal, that's just plain wrong.

Governor Christie Finds Something Else To Take Over

The Governor has announced a plan to bring the Atlantic City boardwalk, including the casinos and entertainment facilities, under State control. Seeing as how the recently ended State takeover of Camden is generally viewed as a failure, one has to wonder why the Governor thinks this is a good idea.

There is the report of the Governor's Advisory Commission on New Jersey Gaming, Sports and Entertainment, which is the apparent impetus for the State takeover. But while that report recommended State oversight of Atlantic City, it did not recommend an outright takeover. The stated rationale for the takeover is that Atlantic City's local government is too inefficient and corrupt to effect change.

What is clear is that there is a definite trend of consolidating power in Trenton. All of the State's investigative power, with the exception of the State Commission of Investigation, is now in the executive branch. The State Commission was almost merged into the executive branch as well. It's entirely likely that before long control of county prosecutors will rest in the executive branch, under the auspices of the Attorney General. And now control of one of the State's premiere tourist attractions lies in Trenton. All of which has me turning into a bone fide conspiracy theorist.

Here's my latest totally unfounded conspiracy theory. Many people have wondered why Steve Sweeney and Chris Christie have formed such a tight bond. Perhaps a deal was made -- Sweeney's support for a 2% cap in exchange for an agreement to restrict all gaming to Atlantic City and to deny the State's racetracks the ability to operate slot machines, as they do in neighboring states. And now maybe the Governor has taken control of Atlantic City as a means to keep the state's most powerful Democrat in check.

And if there was a deal, how would taxpayers ever find out about it? In years past, perhaps the Inspector General would have investigated the Governor's actions. But now the Inspector General works for the Governor. Certainly the State Commission of Investigation could investigate. But seeing as how it just escaped the budget knife, would the SCI actively investigate the Governor now?

Perhaps the New Jersey Racing Commission or the Division of Gaming Enforcement would investigate. But those entities are within the Office of the Attorney General, who is about to have her power increased by gaining control over all the county prosecutors. Surely the Attorney General is not going to attack the Governor at this time.

If nothing else, this plan for the takeover of the Atlantic City casinos is a terrific illustration of the danger of allowing a Governor to concentrate State power to the extent this Governor has. It means the end of transparency and accountability in government.

So I admit it, my conspiracy theory is unfounded. But the impact of the consolidation of power in Trenton is real.

Quote of Note: The Campaign Against Competence Continues

Governor Christie has announced a plan to cap the salaries of public school administrators outside of the 16 largest school districts at $175,000, the same amount as the Governor makes. That means that 70% of the superintendents in the system are looking at a pay cut. The State aims to save local municipalities $10 million.

Salary limits would also apply to nontenured assistant superintendents and business administrators. In addition, Education Commissioner Bret Schundler suggests that this may encourage districts to share superintendents and staff. Both of these facts would yield additional savings.

Although merit-based pay increases will be possible, the bulk of compensation will be based on the number of students served, and merit pay would not be count towards pensions.

At its core, this legislation seeks to stop the bidding war among school districts for administrators. Says the Governor:

"People are bouncing around like free agents in baseball, and getting higher and higher salaries as they go. What we're trying to do here is to shift the paradigm."

For their part, superintendents say that they deserve their salaries through their specialized understanding of personnel, finance, curriculum, administration and school-construction issues. New Jersey School Boards Association spokesman Frank Belluscio says that the cap will put the State at a disadvantage in attracting qualified candidates.

In response, the Governor has said that if the sole reason an administrator is working in public education is the money, we don't want that administrator anyway.

And therein lies the theme here. As we saw in the Governor's treatment of Clifford Janey, as echoed on the editorial page of the Wall Street Journal, the Governor does not believe in public education "careerists." This is nothing short of an attempt to purge senior administrators from New Jersey's public education system. And since this plan can be implemented by the Governor without a need for legislative approval, it's a done deal.

So add this to the Governor's attempts to undermine public education in this State. The Governor seeks to make private school more viable through a voucher system that pulls money out of failing public schools, has already instigated a landslide of public teacher retirements through changes to pension benefits, and now seeks to limit the pool of experienced and qualified public school administrators.

Christie's Karl Rove Style Power Grab Continues

Showing a mastery of the Friday press release, on Friday the 16th the Governor announced a task force to study a State takeover of county prosecutors. The Governor is questioning whether or not the state needs 21 sex crimes units and 21 gangs units. State Attorney General Paula Dow will make the final recommendation.

On its face, this is a rational cost saving measure. In context, however, this is another step in a march towards consolidating investigative power in the executive branch, i.e., in the hands of New Jersey's Governor, who is already the most powerful Governor in the country by means of the New Jersey Constitution.

By way of reminder, as a Federal prosecutor Chris Christie was one of seventeen members of an advisory council to Alberto Gonzalez. As such, Christie had a front row seat to the politicization of the Justice Department.

And in 2006, shortly before the 2006 election, Federal prosecutor Christie brought an indictment against an anti-poverty organization in Bergen County with ties to Senator Robert Menendez. The indictment was announced a month or so before voters went to the polls to choose between re-electing Menendez or voting for his Republican rival, State Senator Tom Keane, Jr. Menendez and Kean were in a very tight race. Four years later, no charges have been brought as a result of the indictment, yet the indictment remains open and Menendez cannot clear his name.

Finally, this year the Governor moved to bring almost all of the State's investigative control under the wing of the executive branch. The Public Advocate has been eliminated, and both the independent Inspector General and the independent Medicaid Inspector General have been merged into the State Comptrollers Office, which is in the executive branch. The sole holdout is the State Commission of Investigation, which is housed in the legislature.

So will the county prosecutors be merged into a State agency similar to the Department of Justice? It depends on whether or not Paula Dow will choose to vastly expand her personal power and influence. In other words, there's a very good chance.

Which means that this Governor, who has a history of using the investigative power of the State and the power of the indictment for purely political motives is amassing a frightening amount of power.

News Flash: Republican Privatization Task Force Supports Chris Christie

A great deal of press attention has been given to the report issued by the New Jersey Privatization Task Force. In a nutshell, the report says that by engaging private contractors to provide for multiple services currently provided by public employees, the State could save about $210 million.

Now, the State budget is $29.4 billion dollars. This report is highlighting ways to save less than 1% of the State's annual costs. So at first blush, this seemed like much ado about nothing. But as I read the report, certain aspects of the analysis and certain facts leapt out at me.

First of all, this was a study about the privatization of services, not assets. While couched in terms about bringing competition into the provision of public services, it would be fair to say that this was a report analyzing how to take jobs away from public employees, i.e., another salvo in the Governor's war on public employee unions. In fact, the Civil Service laws and the Displaced Workers Pool are cited as impediments to privatization.

Second, there were 5 members of the task force. Dick Zimmer is a former Republican Congressman (and State Assemblyman and Senator). Todd Caligone is President of ANW/ Crestwood, a New Jersey paper company. Kathleen Davis is Executive Vice President and Chief Operating Officer of the Chamber of Commerce of South Jersey. John Galadank is President of the Commerce & Industry Association of New Jersey, a free enterprise advocacy group. P. Kelly Hatfield is a former Republican candidate for Congress.

The fact that this group issued a pro-privatization report is about as surprising as Donald Trump issuing a statement in favor of beauty pageants. In fact, this group is so pro-privatization that it is proposing privatization as a solution to problems created by privatization.

Third, this report makes clear that not every private service provider would be eligible to bid in this public service marketplace. Only qualified bidders with strong balance sheets would be eligible; contracts would be awarded based on merit-based criteria and follow a documented scoring system. So not only would there be no preference for minority owned businesses which have been locked out of certain industries for or small businesses, there would be an institutionalized bias against such bidders.

So make no mistake about it, this Report is a not a fact-finding endeavor, it is a means to promote Governor Christie's pre-existing policy goals.

For example, one privatization proposal is a school voucher program. It's a 5 year "pilot" program that starts providing 3,200 scholarships a year, and ramps up to 16,000 scholarships in year 5. Scholarships would be provided by private corporations and would be capped at the amount the scholarship-recipients' school spends per pupil. The scholarships can be used for public and private schools. Exactly what public service is to be provided by private service providers under this proposal is unclear. What is clear is that this same program has already been proposed by Governor Christie.

However, the proposal that pushes this report into the area of farce pertains to special education students. Those disabled students who are not making progress in their public schools could get a scholarship to attend either another public school or a private school. The scholarship would be capped at the lesser of the amount the unacceptable school spent on that student or the tuition and fees at a private school. There is no mention of the cost of transporting the child to and from the new school.

The problem is that, under current law, all students are entitled to a free appropriate public education. Which means that disabled students who are not making progress in their public school are entitled to attend private school on the public dime, i.e., at no cost to the student for tuition or travel. In other words, special education has already been privatized in this State.

But private schools charge too much. And private bus companies charge too much. So this particular venture into privatization has proven to be a budget buster for school districts, which are obligated to pay what the private service providers charge.

And so the solution is to partially privatize the payment of private school tuition, and shift the remainder of those costs plus the cost of transportation to the disabled student. Yes, this privatization proposal would increase the cost to the taxpayer of educating special needs students. A Special Needs Student Tax, if you will.

Clearly, this proposal is not about bringing competition into the special education services market. This is about reducing property taxes for the majority by making special needs students pay more for their own education.

Other privatization proposals suggest introducing the profit motive into areas that impact public health and safety. For example, the report suggests privatizing the investigation of Workmen's Compensation claims. I can just imagine the compensation of investigators being based on keeping awarded claims under a certain financial benchmark -- the way private insurance companies work. The report also suggests water and waste treatment facilities should be privatized, which gives rise to visions of accountants balancing the cost of completely purifying water against the cost of paying claims to the people who get sick from tainted water. And the report also suggests that hospital debt collection should be privatized. Which means people who cannot afford health care will now be hounded by private debt collectors.

This report is so blatantly biased and so transparent in its political motivation that one has to wonder whether or not the point was to actually promote privatization. Surely, the Governor knows that no proposals from so partisan a task force will be taken up by the Democratic-controlled legilature.

The only reasonable interpretation of this report is as a piece of campaign literature. This is Chris Christie polishing his far right credentials on the taxpayers' dime.

Now if we could only get Chris Christie to privatize his endless self-promotional activities and stop using the resources of the State to further his personal agenda and career.

Throwing Out The Baby With The Bathwater

Today's Sunday news programs were eye opening on a number of levels. First, on Meet The Press, I got to hear both Ed Gillespie and David Brooks discuss Chris Christie's austerity budget and his fight with public employee unions with approval. Clearly, what's happening in New Jersey is going to be discussed in 2010 elections across the country.

And on New Jersey Now I got to hear Marie Tasy speak in favor of the Governor's elimination of $7.5 million in funding for womens' health services.

Ms. Tasy is the Executive Director of New Jersey Right To Life-PAC, the State's largest pro-life political action committee. Ms. Tasy, and NJRTL-PAC, were not always supporters of Chris Christie. The PAC did not endorse either Christie or Lonegan in the Republican primary, as both were pro-life. And initially, NJRTL-PAC declined to endorse Republican candidate Christie because he selected a pro-choice running mate, Kim Guadagno.

However, in the late days of the election, as Governor Corzine closed to within a statistical dead heat with Christie, Ms. Tasy finally did endorse the Republican. Apparently, a pro-life Governor with a pro-choice Lieutenant Governor was better than a pro-choice Governor. Hardly a ringing endorsement.

So, with the eyes of the nation on New Jersey, Chris Christie found himself in need of stronger ties to the pro-life community. Hence his elimination of $7.5 million in womens' health funding.

The money would go to support reproductive health services at 58 facilities throughout the State operated by Planned Parenthood. While 3 of those facilities provide abortions, none of this money would be used for abortions. While the Governor and Ms. Tasy claim that uninsured women can get their health care at other facilities, the fact is that many will be forced to go to hospitals for their care. As the Planned Parenthood facilities conducted 70,000 breast cancer screenings and 65,000 Pap smears last year, the liklihood that hospitals could pick up the slack is small.

But to Tasy, this is a war against Planned Parenthood. She claims that by distributing literature to teens and providing education about birth control and STDs, Planned Parenthood encourages underage sex, thus creating the need for abortions. To Ms. Tasy, Planned Parenthood creates the demand for its clinics by coming between children and their families, and their family values. She sees it as a self-perpetuating vicious cycle. And any money that goes to Planned Parenthood supports that cycle, even if the money itself is not used for abortion services.

So this is how $7.5 million out of a $29.4 billion dollar budget becomes a national issue. A Governor with national ambitions needs to solidify his relationship with the pro-life community, so he cuts money for womens' health and sends the head of the State's biggest pro-life PAC out as his proxy.

As of right now, the Senate has reinstated the $7.5 million in funding for womens' health services with a veto-proof majority; the Assembly has reinstated the funding but by less than a veto-proof majority. The Governor has yet to act on the bill reinstating the funding.

And the country waits to see how far Chris Christie will go to mollify the pro-life right.

Deal Or No Deal

This Saturday, Governor Christie and Senate President Steve Sweeney held a press conference to announce a deal on a property tax cap. The agreement is a 2% cap on property tax increases with only four exceptions: (i) rising pension and health care costs, (ii) debt payments, (iii) rising school enrollment and (iv) states of emergency.

Two facts quickly emerged from this press conference. First, Assembly President Sheila Oliver is not on board yet. This is a deal between the Governor and the Senate President only.

Second, this compromise allows municipalities to increase property taxes for pension and health care costs. Which is a big win for public employee unions, who are now free to negotiate contractual increases without the limitation imposed by a hard cap. Which is why everyone's attention now turns to the "tool kit," which will strengthen the hand of municipalities in negotiating with unions.

So it seems that Chris Christie may have fallen into exactly the trap forseen by the Wall Street Journal on its editorial page this weekend:

"One temptation for Mr. Christie would be to settle for too little reform when his political capital is at its highest, which was Arnold Schwarzenegger's original mistake in California. When Arnold proposed more far-reaching reforms later, the public mood had changed and he was routed. Mr. Christie's best reform opportunity is now, and taxpayers everywhere should hope he succeeds."

So what we have is an odd form of political theatre. The Governor wanted to announce a deal before people started showing up for 4th of July fireworks that had been cancelled. So we have a cap that has a hole big enough to drive a union contract through and a deal with half of the legislature.

What this means for the Governor who was building a national reputation as a union buster, or for the taxpayers, remains to be seen. But, from my viewpoint, it is a shocking reversal of position for the Governor, who has been making teachers the scapegoat for the State's fiscal problems for some time now. Without a hard cap, the "tool kit" better include a sledgehammer.

I wouldn't be surprised if the Governor was once again faced with a revolt from within his own party. And if I were Sheila Oliver I would hold out for $7.5 million for women's health before agreeing to anything.

The Unitary Executive of New Jersey

This week should have been one of celebration for Governor Christie. He got a budget through the majority-Democratic legislature with close to 100% of his priorities intact. He also got a commitment from the Democratic leadership to work on property tax reform through the summer.

But the Governor is not satisfied. He used his power as Governor to call the legislature into meeting every day over the holiday weekend. And when the legislature refused, the Governor threatened to sue.

What could possibly be on the Governor's mind?

First, this July 4th weekend a lot of taxpayers are going to notice that there are no fireworks in their town, as there usually are. And parents sending their kids to summer school are about to get charged for what used to be a free service. In short, the pain from this budget will be felt in the very immediate future.

Which is why the Governor needs to be seen as doing everything he can to speed property tax reform, to show people that the pain they are feeling now will be followed shortly by gain. Hence the Governor's new willingness to forego a Constitutional Amendment. And hence the Governor's threat of legal action. Because, in all fairness, the Democratic leadership has hinted that they will be moving property tax reform forward at a measured pace, while politically the Governor needs a sprint to the finish line.

There is, however, a second motive at work here. The Governor is intent on exercising every single one of his Constitutional powers as Governor as a policy tool. And the Governor of New Jersey has more power than any other Governor in the nation -- all executive power in New Jersey is vested in the Governor. Our Governor even has a line item veto.

For example, the Governor gets to nominate justices to the Supreme Court of New Jersey. Where, in the past, every Governor has done so on the basis of merit, this Governor decided to use this power to pack the court so as to overturn the State's court-ordered school financing formula. When the Governor exercised his veto over the Millionaires Tax, he did so with a sense of theater within minutes of the bill's passage. And now the Governor is declaring that he has the power to call a special session of the legislature over the holiday weekend, and threatening to sue if lawmakers do not show up (which they did not, in droves).

This second issue is much more about the Governor's future plans than it is about governing New Jersey. By using every arm of Government as a policy tool to the maximum extent of his Constitutional authority and beyond, the Governor is publicly aligning himself with people, such as Dick Cheney, who believe that executives must be strong executive, and that the powers of the President must be unilateral and unchecked. He is, in essence, auditioning for the far right wing of the Republican party.

So when the Governor makes an issue of his Constitutional authority, to my thinking it's almost as if he knows that his policies will cause so much pain that he will be looking for a job in a few years and he's brushing up his resume. It's a sign of weakness.

Quote Of Note: The Most Famous Careerist In All The Land

In recent days, I have heard reports that Clifford Janey, Newark’s School Superintendent, may be out of a job. Janey is 2 years into a 3 year contract. However, Newark schools are under the jurisdiction of the Governor, which means that Chris Christie is Clifford Janey’s boss. And for reasons as yet unstated, Governor Christie has let it be known that, not only may Janey’s contract not be renewed, it may be terminated early.

I had filed this fact away as an interesting yet innocuous tidbit until I read an editorial in Today’s Wall Street Journal about Michelle Rhee, Schools Chancellor for Washington, D.C. Ms. Rhee has just concluded a negotiation with American Federation of Teachers President Randi Weingarten which has resulted in a noteworthy new contract. Among other terms, this new contract includes:

1. An abolition of “lock-step” pay;
2. The implementation of a voluntary performance-based compensation system;
3. Changes in tenure rules which allows bad teachers to be fired more easily and marginal teachers to be placed on probation for 2 years.

So what does this have to do with New Jersey? The WSJ editorial provides the following:

“Unfortunately, most school chancellors are careerists who don’t want to upset the unions because they are always looking for their next job. One example: Clifford Janey, whom Ms. Rhee replaced in D.C., went on to become the superintendent in Newark, N.J. whose schools may be worse than D.C.’s. Ms. Rhee, by contrast, came to her job as an outsider willing to endure the considerable abuse that the unions and their political backers threw at her.”

And so it seems that the Wall Street Journal has blessed, if not outright suggested, the replacement of Clifford Janey with an outsider who will take on the unions.

But here’s the thing. Newark teachers are not represented by the NJEA, which is adamantly opposed to merit pay and changes in tenure. The teachers union in Newark is the Newark Teachers Union, an affiliate of the American Federation of Teachers. Joseph Del Grosso, President of the NTU, has already gone on record as saying he is in favor of merit pay and is open to negotiation on tenure and seniority. In fact, Mr. Del Grosso did so in the Wall Street Journal.

So it seems to me that we have political theater in the making, courtesy of the Wall Street Journal and Chris Christie. Clifford Janey is being singled out as a “careerist” who must go to make room for an education industry novice. And when that novice reaches an agreement with the NTU that includes merit pay and changes to tenure rules, the Wall Street Journal and the Governor will trumpet a victory over the status quo, a victory over public employee unions and a victory over “careerists” everywhere -- conveniently overlooking the fact that the key concessions were made during Janey’s time on the job.

The Wall Street Journal has already proclaimed Chris Christie a national hero on its editorial page. But this incident seems to suggest a certain give and take between the editorial staff and the Governor that bears watching. I just find it difficult to believe that, of all the public school “careerists” in the land, the Wall Street Journal chose to make an example of the same superintendent the Governor wants to replace.

Dear Trenton: This Is Why Voters Are Turning Independent

So there's a State budget in the legislature which has a $570 million hole in it. And no one in Trenton seems to care. Everyone intends to move this budget forward on the assumption that the money that isn't coming will eventually arrive. Call it the bi-partisan Tooth Fairy approach to budgeting.

Governor Christie does not want to raise the issue because:

1. After campaigning against balancing the budget on one-year fixes and other gimmicks, the Governor will have to admit that he used a one-time increase in Medicaid money to balance his budget;

2. While more than 30 states are in a similar situation, i.e., facing budget holes because of the failure of Congress to approve additional FMAP money, this Governor will be forced to admit that while he has been speaking in favor of forcing government to live within its means he has been willing to let the Federal government give New Jersey money borrowed from taxpayers in order to close New Jersey's budget deficit; and

3. The Governor is facing a mini-revolt within his own party because of the tax increases in this budget, and were he to admit to a $570 hole while pushing a budget that includes now-unfunded programs demanded by Democrats he may lose even more votes from within his own party.

New Jersey Democrats do not want to raise the issue because:

1. They do not want to jeopardize the funding for their pet programs they just got reinstated in the budget compromise with the Governor; and

2. When it turns out that this Governor's budget, voted for by every Republican in the Senate and Assembly, has a hole roughly equal to the amount of money the Millionaires Tax would have brought in, Democrats expect to make political hay.

And so it becomes apparent that there are two holes in Trenton. One is a $570 million hole in the budget. The other is the gaping distance between our government and the taxpayers.

The taxpayers want the budget done right. They don't care who is in and who is out, they don't care who is seeking national office, they just want their government to put the taxpayers first. And knowingly passing a budget that the State cannot afford is just bad government.

To the Republicans and Democrats in Trenton, a pox on both your houses. We taxpayers are ready to take our medicine and live within our means. Please put your personal ambitions and petty grievances aside and for once give us an honest budget we can afford.

Washington Republicans Blast A Hole In New Jersey's Budget

There’s a gaping hole in New Jersey’s proposed budget.

Last night, Republicans in Washington refused to allow HR 4213 to come to the Senate floor for a vote – they filibustered it. HR 4213 is primarily thought of as a bill to extend jobless benefits for the long-term unemployed. However, the bill also included a 6 month extension of enhanced Federal Medical Assistance Percentages, i.e., more money for the states.

The budget currently under consideration in the New Jersey legislature relies on that extended FMAP money. In fact, it may be these very funds Governor Christie relied on when he restored a prescription drug benefit for seniors. And he restored that program to blunt the Democratic push to extend the Millionaires Tax.

There is no fallback plan in place to restore those lost FMAP dollars, which may actually exceed $570 million. A few weeks ago, David Rosen, legislative budget and finance officer for the Office of Legislative Services, observed that if the enhanced FMAP money evaporated New Jersey would have a serious issue.

Since the Governor is already facing some rebellions from Republican legislators who object to the tax increases already in the budget, the Governor is going to have a tough time replacing those lost FMAP dollars.

UPDATE: Treasury spokesman William Quinn has been quoted as saying that the Governor will move forward on the assumption that the $570 million in FMAP money is still on the way. But since the surplus is only $300 million, that's one risky assumption. Apparently, no one has the political will to actually get the budget right this late in the game.

Quote Of Note: The Governor Sends A Message

The New Jersey Chamber of Commerce is a pro-business lobby that has been advocating against government regulation and taxation since 1911. One would think that a pro-business lobby and a pro-business Governor would be natural allies.

At first blush, this seemed to be the case. Almost every Republican in the State who spoke in favor of allowing the Millionaires Tax to expire repeated information from the Chamber. The Chamber commissioned a Boston College study that has been widely cited as evidence that the Millionaires Tax caused New Jersey to lose $70 billion in wealth (in point of fact, the study found nothing of the kind, as discussed in an earlier posting).

However, there has been a sizable rift between the Chamber and the Governor since the Governor took office in January. The Governor felt that the Chamber in general, and Chamber President Joan Verplanck in particular, had distanced themselves from Christie during the campaign, essentially betting that Governor Corzine would win re-election. When Christie won, it was payback time.

So the Governor boycotted the Chamber’s annual train ride to Washington, D.C., an event which Governors past attended regularly. And Christie made it known to business leaders throughout the State that that he was unwilling to cooperate with the Chamber so long as Verplanck remained President. A post the 64 year old Verplanck has held for the past 15 years.

And so, yesterday, Verplanck announced her resignation.

State Senator Joseph Kyrillos, former chairman of Chris Christie’s gubernatorial campaign and now a key Christie advisor, is quoted as saying:

“The various groups have gotten the message that they need to be full partners in making New Jersey competitive again. The Chamber and all business groups in this State need to re-brand and reinvent themselves.”

So forcing the resignation of the long-standing President of the New Jersey Chamber of Commerce was done to send a message. It’s not enough to agree with, support and promote the Governor’s agenda. You have to be a “full partner.”

When it comes to Chris Christie, either you’re in or you’re out. As George W. Bush once said, “Either you’re with us or agin us.” And that’s how Chris Christie treats his allies.

As I write this, certain Republicans in the Senate and Assembly are deciding whether or not to support the compromise budget the Governor and the Democrats have reached. Republican Senator Michael Warren has said he does not support the budget. Republican Assemblyman Patrick Carroll and Republican Assemblywoman Alison Little McHose have announced plans to vote against the budget. And the Governor needs every Republican legislator to vote for the budget in order for it to pass.

Those three Republicans may be joining Joan Verplanck at some local Trenton watering hole in the very near future ruing the day they ever dared cross Chris Christie.

Got the message?

Budget Nuggets

I’ve come across two interesting facts while reviewing the compromise budget now working its way through the State legislature.

First, the Governor has agreed to refrain from cutting the budget of the State Commission of Investigation.

According to the web site for the SCI:

"The State Commission of Investigation was established in 1968 as an independent fact-finding agency. Its mission is to identify and investigate organized crime, corruption and waste, fraud and abuse of taxpayers' dollars. The SCI is required by law to pursue these investigations beyond the sphere of political influence or favoritism. The law also requires the SCI's findings to be made public through written reports and/or public hearings."

The Governor had wanted to merge the SCI with the State Comptroller, the only government watchdog working under the jurisdiction of the executive branch. The Governor had also wanted to merge the Inspector General and the Medicaid Inspector General with the State Comptroller, effectively bringing all of the State’s investigative powers under one roof – his roof.

None of this should be surprising to those who have followed Chris Christie’s career. As a Federal prosecutor, Chris Christie served as an advisor to Attorney General Alberto Gonzalez. Christie was privy to, if not actively involved in, the politicization of the Justice Department. In fact, in the final months of the 2006 campaign, US Attorney Christie brought an indictment against an anti-poverty agency with ties to Senator Robert Menendez, who was in a tight re-election campaign against Tom Kean, Jr. To date, that investigation remains open, although no charges have been brought.

So the concept of the Governor holding the purse strings of the State’s investigative powers, and controlling the paychecks of the investigators, was disconcerting, at best. This is a Governor who believes in using any and all means available, even means arguably not within his powers, to push forward his personal agenda.

But, for now, SCI is safe. And that’s a good thing.

The second fact to emerge from the compromise budget is that New Jersey Network, the public television station in New Jersey, will lose its State funding after December.

NJN serves a unique function. As New Jersey falls within both the Philadelphia and New York media markets, a great deal of the public broadcast programming available is geared to those states. NJN has a nightly newscast and weekly public events shows, as well as other programming, all geared towards events in New Jersey.

Currently, the State owns NJN. The idea of spinning off NJN into a private not-for-profit corporation is not a new one. In fact, it was originally proposed in 2008 by the people who run NJN. They seem to think that NJN will do better as a stand-alone entity.

Details remain to be worked out as to how the spin-off will occur. The State owns the physical assets of NJN, including broadcasting equipment. And there certainly is a scramble on to find alternative financing in the 6 months or so before the State stops providing funds.

But now more than ever, it is important that New Jersey have an independent media outlet focused on New Jersey stories. Otherwise, it would not be long before this Governor found a way to use NJN to advance his own agenda.

The Budget Debate Gets Unionized

Tomorrow, the State Assembly will attempt to override the Governor's veto of the so-called "Millionaires Tax." And the Democrats will lose that battle. But they are hoping that this will be a strategic loss in a larger war.

It seems that something akin to a Democratic party strategy is emerging. And while I'm thrilled that the majority party in the State legislature has elected to abandon its "deer-in-the-headlights" posture, I not quite sold on this new direction. Because it seems designed more to achieve political points than it is to serve the taxpayers.

So, all the Republicans in the Assembly will go on record as refusing to override the Governor's veto. From what I can make out, the idea is to tag each and every Republican with personal liability for refusing to extend the Millionaires Tax. And then to make it clear that the main objective of each plank in the Governor's platform is an anti-union one, thus turning those tags on Republicans in the Assembly into anti-union albatrosses. How will the Democrats do that?

1. The Democrats will not put the Governor's 2.5% property tax cap on the ballot this fall, and will not pass the Governor's 33 "tool kit" laws. That means that every municipality will be faced with intransigent public employee unions with no money to pay them and no new State laws to strengthen the municipalities' negotiating hands.

2. The Democrats will not move the Governor's school voucher plan forward. That means that all the extra money the Governor sent to failing public schools will stay in those public schools, and not be transferred to private schools. Which will be boon to the teachers' unions.

3. Finally, the Democrats will propose their own 2.9% cap property tax cap as an amendment to existing law, rather than a Constitutional amendment. Notably, this cap would retain the exemption for increased health care costs for public employees, to which the Governor has openly objected.

So, at the end of the day, the Democrats intend to let the Governor have his budget, but deny the Governor his victory over the unions. The Governor has been attempting to make a national name for himself as something of a union buster, and this strategy will make it more apparent to voters the extent to which Chris Christie's anti-union agenda is more important to him that is getting a vastly reduced budget.

But I can't help thinking that somehow the taxpayers are losing out here. It will be impossible to get real property tax reform unless the unions are brought to the bargaining table. The Governor's union bashing leaves the unions little option but to hunker down and wait for 2012. The Democrats' strategy allows the unions to do just that.

And the taxpayers? They just keep paying.

To Merge Or Not To Merge

In recent weeks, there's a topic that has been broached by sources which don't usually agree on much. That topic is the unusually high number of school districts in New Jersey and the effect that fragmentation has on the State's property taxes. By one count, the State has 566 towns and 588 school districts.

Tuesday's Wall Street Journal ran a front page story about the different ways school districts across the country are managing budget shortfalls. The article focuses on Downe Township, New Jersey. Downe Township has a school district for students from preschool through eighth grade. There are 236 students in the district. For high school, the students travel to nearby towns.

This year's budget cuts will hit certain students the hardest -- kids who are not eligible for special education but still need extra help to keep up. Downe Township had been running a very successful remedial program after school, which will have to be cut. Also being cut are basic skills classes.

In its report which recommends against Cap 2.5, the Center for Budget Policy and Priorities highlights the high number of New Jersey school districts as a significant contributor to the State's high property taxes. CBPP finds that New Jersey's small school districts suffer from duplication of services and administrative structures, and weak bargaining power with unions and health care providers. CBPP also cites the high cost of sending special needs students out of district as a significant factor contributing to high property taxes, a situation which might be improved if districts combined their special education programs, if they do not combine outright. Interestingly, the CPBB finds that teacher salaries are not the cause of high property taxes; state policies and inefficiencies are the culprits.

And in a recent address in Perth Amboy, Governor Christie noted that Cap 2.5 might encourage smaller school districts to combine. When these inefficient school districts no longer have the option of raising property taxes, reasons the Governor, the districts may finally choose to share administrative, superintendent and business services.

The advantages of merging small New Jersey school districts may be one of the few ideas that has supporters on the right and on the left. That being said, the idea was so soundly trounced when Governor Corzine floated it that no one is willing to shout it from the rooftops. Yet.

The Christie Brand

Monday's Wall Street Journal ran an interesting piece on Chris Christie. It seems our Governor is making a name for himself by being one of the most anti-union leaders in the nation. Apparently, the Governor's penchant for referring to "mindless, faceless union leaders" has not gone unnoticed.

Understanding that union-busting is the issue on which the Governor seeks to stake his reputation is key to any attempt to understand the Governor's actions and priorities. Just ask Bret Schundler, who dared to compromise with the New Jersey Education Association on merit pay and tenure.

Using this "union-buster" image as a lens, certain aspects of the Governor's proposed Constitutional amendment that would cap property tax increases at 2.5% annually, using Massachusetts as an example, leap to the foreground. First, let us pause to consider the irony of a conservative Republican using Massachusetts as an example for anything. Then, let us consider the statements of Governor Christie's detractors who say that in 1980, when Massachusetts adopted its cap, state unemployment was at 5.8%, nowhere near the current New Jersey rate of 9.8%. And that the Massachusetts economy was growing at the time. Finally, let's remember that the State recently passed a 4% cap on property tax increases which is beginning to show results.

The Governor acknowledges that Cap 2.5 will cause a lot of pain to municipalities across the State, especially so in light of the state of the economy. To soften the anticipated blow, the Governor has devised a "tool kit" for local governments. And a big piece of the tool kit is giving municipalities the ability to bust unions. The tool kit would restore the ability of municipalities to bind unions to a "last, best" offer in negotiations after all attempts at mediation have failed. And the tool kit allows municipalities to opt out of civil service laws.

So, while Cap 2.5 is aimed at reducing property taxes, the clear subtext is to undermine public employee unions. Because reducing the State budget without raising taxes is not enough to build a national reputation for Chris Christie. Any tea-party courting far right Governor can do that. The Governor needs to imprint the plan with his "brand" -- Chris Christie, union buster.

Oh, and the existing 4% property tax cap? Governor Christie says that that cap allows for too many exemptions. Like exemptions for money to provide public employees with better benefits.

And after all, the Governor has a reputation to keep.

Bret Schundler Gets Schooled

Anyone following any New Jersey news media in recent weeks has had to have learned of the clash between Governor Christie and Education Commissioner Bret Schundler over the State's application for Race To The Top funds.

By way of background, Bret Schundler is a former mayor of Jersey City and a former Republican gubernatorial candidate. He was a champion of New Jersey's charter school law, and is widely viewed as a conservative Republican. At least conservative for New Jersey.

Earlier this year, New Jersey submitted an application for a share of the first round of Federal funds available under the Race To The Top program started by President Obama. The State got no money from that application, largely because the State had not secured the cooperation of the New Jersey Education Association.

Commissioner Schundler, in preparing the State's application for a share of the second round of Race To The Top funds, sought to find a compromise with the NJEA that would entice the union to sign on to the State's application. Because Commissioner Schundler thinks that getting Federal funds for education would be a good thing. And the commissioner did find a compromise. However, that compromise included an agreement by the State to withdraw its plans to compensate teachers on the basis of merit and its objection to tenure for teachers with seniority.

In his public disavowment of the deal and of the Commissioner, the Governor said that he was standing up for what he believed in and what he had campaigned on. In his view, teachers were making self-preservation more important than the kids, and the NJEA was protecting its own members at the expense of the State.

The entire episode reminded me of David Gregory's recent interview with Tim Pawlenty, Governor of Minnesota and something of a front-runner for the 2012 Republican nomination for President. Minnesota had a $3 billion budget shortfall in its current budget cycle, and the state legislature wanted to plug part of that hole by allowing Minnesotans to enroll in Medicaid a few years earlier than they otherwise would have under current law.

But Tim Pawlenty said "no." The Governor explained to David Gregory that, since Pawlenty does not believe in big government, it would have been dishonest of him to take that Federal money. So he turned down Federal funds and cut $1.9 billion from the state education budget. And while this 2-year budget was balanced, the next 2 year budget for Minnesota faces a $5.8 billion dollar budget gap.

So, how could Bret Schundler have gone so wrong? By ever believing that there was a compromise with the NJEA that Chris Christie would approve. The Governor does not want Race To The Top funds. He does not want anything that will help the NJEA avoid layoffs for its members, and he does not want anything that makes it possible for the State to meet its school funding obligations under Abbott vs. Burke.

No, what the Governor wants is to use educational policy as a weapon. By that I mean that, just has he did as an advisor to Alberto Gonzalez, the Governor uses every arm of his administration, and sets every policy, towards one goal -- remaking this State into a place where government is not responsible for providing a level playing field, where business is free to function without having its gains redistributed to the less wealthy and where public schools are free to fail.

What Bret Schundler, and quite frankly the rest of us, have to grasp is that these Governors, Christie and Pawlenty, and their far right ilk want to bankrupt the states, to starve the beast of government so that it is incapable of interfering in the marketplace. These guys are playing to a national audience, and are courting voters who will never have to clean up the mess these men leave in their wakes.

And on the national stage, Bret Schundler is no conservative. Compared to Chris Christie and Tim Pawlenty, Bret Schundler is Nancy Pelosi.

Quotes Of Note: A Lost Generation Of Students

In the past few months, much has been written about a study released by the Manhattan Institute supporting Cap 2.5, the Governor's proposal to amend the State Constitution so that no municipality can increase property taxes above 2.5% without approval from the voters. The Manhattan Institute is a conservative, market-oriented think tank.

In a publication entitled "Do Property-Tax Caps Work: Lessons For New Jersey From Massachusetts," the Manhattan Institute's Josh Barro writes that Massachusetts’s experience with capping property tax increases at 2.5% annually could significantly restrain tax growth without hurting educational outcomes in New Jersey. While the rate of increase in Massachusetts' property taxes has slowed significantly since the implementation of the cap, current educational test scores are slightly better than those in New Jersey.

Governor Christie was happy to present this study to the public as proof that New Jersey can cap property taxes without sacrificing excellence in education. However, the Governor failed to highlight one key fact. In an endnote to his report, Mr. Barro writes:

"Readers may be interested to know: If high spending does not explain Massachusetts’ unparalleled educational success, what does? A full answer is beyond the scope of this paper. But policy experts have pointed to a series of curriculum and testing reforms in the 1990s that appear to have significantly improved performance."

So, to be clear, property taxes were capped in 1980, but Massachusetts' educational success stems from curriculum and testing reforms enacted over a decade later. So what happened between the time property taxes were capped and educational reforms were enacted?

The Center on Budget and Policy Priorities has reviewed the Manhattan Institute's report and provided an answer to this question.

"Schools suffered in Massachusetts between the adoption of the [property tax] cap in 1980 and the 1993 [state education policy] reform. In 1991, the state's Board of Education warned that there was "... a state of emergency created by grossly inadequate financial support of the public schools..." and that "[c]ertain classrooms simply warehoused children at this time, with no effective education being provided."

The CBPP goes on to find many flaws with the data and methodology of the Manhattan Institute. (To be fair, the CBPP is not without its critics on the right.) However, both reports seem to be indicating the same thing: the state policy reforms of 1993 are responsible for Massachusetts strong public education program, not the property tax cap of 1980.

But what is most devastating about both reports is the inescapable fact that from 1980 to 1993, public education was on a downward trajectory. So a Massachusetts student who entered the first grade in the fall of 1980 and graduated high school in the spring of 1993 spent his or her entire academic career in a failing public school system. That's an entire generation of students who have been poorly served.

Governor Christie wants to impost a property tax cap in New Jersey, but has yet to put forward a plan for maintaining the quality of education in our public schools in the face of a changed funding environment. In fact, all Governor Christie has put forward is a plan to send public school students and dollars to private schools.

So the outcome is clear. Cap 2.5, as currently proposed, will be a disaster for our schools.