Monthly Archives: November 2008

A pension pickle

It’s official folks.

New Jersey’s history of pension mismanagement and fiscal shell games have joined forces with the current economic climate and begun dragging the state and its residents into an ever-deepening pension fund sinkhole.

Following some massive hemorrhaging in recent months, the entire fund is now valued at around $57 million, at a time when current obligations require at least $118 billion.  Yes, you read that correctly.  It is worth less than half of the value that will eventually need to be paid out to public sector workers.

And instead of moving forward with reforming the entire system, Gov. Jon S. Corzine has instead suggested allowing municipalities to defer payments into the fund until a later date.

That may sound like a nice idea, but all this really amounts to is more strangling of the pension fund.

Under Gov. Corzine’s plan, the pension fund will only suffer further losses as the already dismal investment declines are compounded by another revenue shortfall, caused by the deferred payments. The system will get worse, not better, while municipal and state officials get to delay the payments and associated but perhaps necessary tax increases until the 2009 gubernatorial and Assembly election is over.

The real solution that seems to be escaping the governor is what many have already recommended: end the pension system as it is currently constituted for new hires, by no longer providing defined-benefit pensions and switching to defined-contribution programs, like 401(K)s, like the rest of the world.  If that means the state has to sweeten state worker salaries or provide other incentives to attract talent away from the private sector, so be it, as long as that “it” costs less than the current system.

Old pension obligations and financial promises to current state workers must be kept, but what is going on with the fund now proves that things just cannot go on in that way. Reform, and not gimmicky payment holidays, is the real solution.

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Gang czar contract resurfaces

With what appears to be a solid City Council majority of rubber stampers in hand, Palmer administration officials are poised to bring forward a resolution awarding former city gang consultant Barry Colicelli a contract to work at his old position once again.

The resolution, which is on City Council’s Tuesday docket in the amount of $71,149, probably would not have been placed there were Mayor Douglas H. Palmer not totally assured of its passage, so its emergence likely means that one of the councilmen who voted against the contract earlier this year has flipped his position.

That man could be Councilman Gino Melone.

Mr. Melone demonstrated a new outlook on administration initiatives earlier this fall when he voted for the confirmation of Police Director Irving Bradley, Jr., despite lingering questions about Mr. Bradley’s residency, Mr. Melone’s own formerly strong position on residency, and other red flags about the appointment.

It should be interesting to hear Mr. Melone’s comments, if there are any, during this vote, in light of what he said when he voted against the contract last February.

“I feel we have capable individuals” to fulfill Colicelli’s role, said Mr. Melone, who also cited cost and accountability during his previous negative vote on the contract, according to The Times of Trenton.

A lot has changed since that article, when the contract last surfaced.

The city faces a potential $28 million budget deficit, and every municipal department has experienced 10 percent budget cuts and the threat of layoffs. Crime, according to Mayor Palmer, is continuing to drop, so there appears to be little need to take on another expense.

Yet this is the time Palmer administration officials have chosen to bring back a hefty contract that City Council strongly rejected only 10 months ago.

With a yes vote this time around, council members better be prepared to tell their constituents exactly what has changed since the last time this albatross of a contract came up in City Council chambers.

Without justification, approval simply means that Mayor Palmer has wheeled and dealed and once again co-opted a majority of City Council members out of being the proper check on administrative power that they are supposed to be.

That is certainly a sad state of affairs for Trenton.

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Mortgaging the city’s future

Desperate times call for desperate measures, but for a city like Trenton, laying off 69 low-ranking municipal workers is a poor way of dealing with a million-dollar budget deficit.

Yet that is exactly what the city administration under Mayor Douglas H. Palmer has proposed to deal with a budget deficit that could become as large as $28 million, should a proposal to sell outlying Trenton Water Works infrastructure fail to pass muster with the state Board of Public Utilities.

The layoff plan, like the water deal, is highly indicative of the type of the reckless problem-solving offered by those great minds in the Palmer administration. It would be much better to cut a much lower number of high-paid and unnecessary positions in the administration – perhaps 10 – than to cut this rather high number of low-ranking positions.

Trenton has a residency ordinance, so it is safe to say that a high proportion of those 69 employees who face being laid off probably live within the city limits. The higher ranks may make more money but they also likely have tenure in excess of 15 years of service, exempting them from required residency and joining the taxbase.

Despite being at a lower position in the municipal hierarchy, the layoff-prone employees’ municipal work makes them relatively well-off given Trenton’s income levels and cost of living. It probably means they are contributing to the tax base through the ownership of city homes and property.

But due to Trenton’s overall economic and social conditions, it is also safe to say that many of those employees will seek work and shelter elsewhere once they are laid off and freed from residency.

In sum, the city is reducing future tax revenue to deal with a shortfall in present revenue, by allowing property owners and taxpayers to flee the city when there are better-paid and unnecessary positions available for cutting. These higher positions are just one of a host of other cost-saving measures that don’t carry nearly the same economic penalty as layoffs. Culling the city’s municipal vehicle herd is a good example.

This whole layoff plan is very similar to the strategy the city is employing in eliminating the future revenue generated by the outlying water infrastructure from future use to fulfill a need for present revenue, by selling off that same infrastructure.

Both plans illustrate a reckless disregard for the city’s future financial stability, in that both are examples of dealing with long-term financial problems with short-term, one-time solutions.

It may be fine for Mayor Palmer and his cronies, who seem to have already begun departing to faraway places where they won’t have to deal with Trenton’s fiscal woes. But sadly, their solutions fail to take into account the welfare of the 80,000 people who will remain in Trenton. What about us?

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Bryant goes down

Former State Sen. Wayne Bryant, who was one of the state’s most powerful legislators at one point, was convicted Tuesday of using his clout to steer millions of dollars in extra aid and support to a state medical school in exchange for receiving a no-show, pension-padding position there.

R. Michael Gallagher, the former dean of the University of Medicine and Dentistry New Jersey’s School of Osteopathic Medicine, was also convicted of numerous charges in connection with his hiring of the legislator for the no-show job after Mr. Bryant used his power to make Mr. Gallagher dean at the same school, U.S. Attorney Chris Christie announced Tuesday.

Under federal sentencing guidelines each defendant faces over 15 years in prison, although U.S. District Judge Freda L. Wolfson has discretion to impose sentences outside of the range provided by those guidelines.

The investigation revealed that Mr. Bryant, who had past connections with some powerful Mercer County Democrats, took salaries from the medical school, the Gloucester County Board of Social Services, and Rutgers University Camden, despite doing little to no work for any of the institutions.

At the Gloucester County Board of Social Services Mr. Bryant worked a little over 14 hours from 2002 to 2006 yet received $200,000 in compensation, plus contributions to his state pension. Similarly, Mr. Bryant worked roughly one day a week at the medical school and successfully boosted his pension from $28,000 in 2002 to $81,000 in 2006 through this fraud, Mr. Christie said.

Mr. Bryant becomes the latest in a series of high-ranking public officials to go down on federal corruption charges brought by Mr. Christie.

The U.S. Attorney, who has secured a conviction or guilty plea from every person he has prosecuted, is resigning his office at the end of this month to make room for President Barack Obama’s eventual attorney appointee and perhaps pursue a run at the Republican gubernatorial nomination for 2009.

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Then and now

A rather interesting New York Times piece that was written just before Mayor Douglas H. Palmer’s victory in the June 1990 runoff election has the man who remains the city’s mayor telling the Times that he was running to make “Trenton what it used to be in the 50s and 60s, a city of safe streets and decent housing.”

Such statements make it clear that few can honestly say that the mayor has had any real success in achieving that vision, and other content in the piece indicates that a chasm of discrepancies have developed between Mr. Palmer then and Mayor Palmer now.

What was promised then and what is happening now demonstrates an ever-lengthening record of reversals and failure.

The man who regularly lobbies the state government for handout dollars and assistance used to say that the city “was too reliant” on such assistance and that the city should turn away from that support through its own development, according to The New York Times.

But his pursuit of private development resulted in a record of dismal failure for the majority of development projects, whether they originated under the city’s direction or the direction of other entities.

Projects that experienced some success, like Waterfront Park and The Sovereign Bank Arena, were county-sponsored and orchestrated, and no similar successes are evident in the Palmer redevelopment portfolio.

The mayor has since turned back to the state and federal government. Besides the usual begging, he has frequently said the state does not delivers its fair share in payments in lieu of taxes for all the so-called “valuable” downtown property state buildings occupy, although one wonders what downtown – and Trenton for that matter – would be without the presence of the state.

More recently, the mayor told the feds that they have not done enough to support urban areas and should therefore pony up dollars to bail out city governments like his. So much for independence…

Also, since those early days, the mayor has become more and more a man that Trenton supports instead of a man who supports Trenton.

Perhaps out of recognition that fixing Trenton requires too much effort for his welfare and that national positions provide greater power, recognition, and less effort, the former county freeholder, school district purchasing agent, local guy, and Spring Street resident has taken to the national stage.

From there he pushes policies that have not benefited many in Trenton, while spending most of his time outside the city.

The domestic policies the man supported in his earliest days have failed, and he has since reversed both his identity and positions. He alternately clings to the city as a means of support, power, and fame and then abandons it for extended periods to bask in the exposure of the national stage, where his domestic failures are hidden.

While this has gone on, the city has continued suffering down the exact same road it was when he made grandiose promises about this “new vision for Trenton.” Perhaps it is time for both the city and the man to move on.

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A so-so record

Some Trenton City Council members planning on running for reelection or for election to other municipal seats in 2010 are probably going to have a tough time pointing out their legislative achievements when confronted by worthwhile opponents.

The body hasn’t really passed much of anything in the form of its own legislation recently, as many of its members have effectively served as a rubber-stamping operation for most of the past three years, save for a few triumphant and memorable moments.

Those “good” moments include standing up to the administration on the issue of renewing former Gang Czar Barry Colicelli’s unneeded service contract, questioning former Police Director Joseph Santiago’s residency, and saying no to purchasing hundreds of thousands of dollars worth of unnecessary police service weapons.

However, City Council has already begun to backtrack on many of these former triumphs.

In the case of residency, they recently went in reverse by affirming alleged residency breaker Irving Bradley as police director, and in Mr. Colicelli’s case, word is that the administration is planning to once again bring the ex-Newark cop and Santiago crony back in the fold, perhaps with the approval of a majority of council members already guaranteed.

Even on issues that council members themselves have promised to take action, little has been done. Councilwoman Annette Lartigue publicly vowed to push for reforming the city’s municipal vehicle usage, but she dragged her feet for so long that it was actually Councilman Jim Coston who finally began pushing legislation on the issue after weeks of stonewalling from the administration.

An even greater example of council inaction is the library funding debacle, in which Mayor Douglas H. Palmer nearly forced the closure of four of the city’s beloved branch libraries through a 10 percent cut to the library budget.

While many council members have expressed their support and even undertaken activities aimed at keeping the libraries open, few have spoken openly of properly using their statutory powers to control budgetary practices in injecting funds into the library system’s coffers.

Doing so would augment all of the wonderful private organizing and fundraising efforts that have emerged because of the closures, but apparently the current council members don’t see things that way.

This tendency to be reluctant or timid about using the powers of an elected office and remaining rather inactive are not the best attributes for elected officials. Maybe Trenton should look for people who have a contrary record when it comes to the makeup of the next City Council.

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STATEHOUSE UPDATE – Economic assistance bill advances

A General Assembly bill that would appropriate $22.5 million to fund food banks and soup kitchens, home heating assistance programs, and free legal services for low-income persons is advancing through the legislature, having been released by the Assembly Budget Committee this week.

The bill, if passed, would provide a tremendous boost to services that could be utilized by many of economically disadvantaged residents living in the City of Trenton and the rest of New Jersey.

The bill, No. 3374, provides approximately $3 million to the Department of Agriculture for what is known as the Hunger Initiative/Food Assistance Grant Program.

The program is one of the main avenues of support for many of the facilities that provide food for the state’s poor. The facilities have been increasingly stricken by falling donation levels and a surge in the number of families requiring help with food, as the economic crisis has worsened.

The second section of the bill provides $10 million to the Department of the Treasury to fund grants in the New Jersey Statewide Heating Assistance and Referral for Energy Services program, which helps fiscally-strained individuals with paying their utility bills.

The program, which is administered through approximately 150 community agencies, is the nation’s only statewide program that provides such grants to New Jersey residents, many of whom fall in an “in-between” income bracket that makes them ineligible for other types of utility assistance.

The final section of the bill provides $9.5 million in funds to the Department of the Treasury for the Legal Services of New Jersey, a non-profit group that provides low-income individuals and families with badly-needed legal services.

This non-profit agency has become especially helpful because of the mortgage crisis, which has resulted in thousands of foreclosures for many families that lack the financial resources to secure their own legal services while dealing with foreclosure proceedings.

The bill, which is part of a package of economic assistance requested by Gov. Jon S. Corzine, still needs to head to the full Assembly for an eventual vote for passage.

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