Christie Administration Now Probed on Port Authority Funding of Pulaski Skyway Rehab

Media outlets continue reporting that Gov. Chris Christie and his administration is being investigated for how the Port Authority funded the Pulaski Skyway rehabilitation project.

New Jersey got the Port Authority to shift funds originally meant for the ARC tunnel to go to rebuild the Pulaski Skyway. That happened when Gov. Christie cancelled the ARC project in 2010, and it's a decision I agreed with because NJ Transit could never keep to a capital budget and New York was not contributing to a project that would benefit immensely from the added tunnels, as well as the fact that the project design was flawed with no through-running trains to Sunnyside Yards for maximizing train access into Manhattan during the morning rush hour and additional trains for the PM rush back to New Jersey.

The Pulaski Skyway was one of the first superhighways designed and opened in 1932. It connected Newark to Jersey City across the Hackensack River and Meadowlands, along with providing direct access to the Holland Tunnel. The bridge was determined to need massive rehabilitation, particularly after the collapse of the bridge in Minnesota a few years back.

The rehabilitation project is indeed a worthy and needed project, but New Jersey didn’t want to raise its own taxes or fees to cover it. That would have put Gov. Christie in a tough position had he wanted to run for President. So, it appears that Gov. Christie and his appointees at the Port Authority got the Port Authority to issue a ruling that the Skyway was an access road to the Lincoln Tunnel, which would be a valid use of Port Authority funds. But the reality is that it’s a stretch to call it a Lincoln Tunnel access road since it directly leads to the Holland.

This has consequences for the bond offerings by the Port Authority since it would be a material misrepresentation of what the bond offerings were for.

Now, a complicating factor is that the Port Authority doesn’t answer to Christie alone. It’s a bistate agency and New York Governor Andrew Cuomo would ordinarily need to sign off on the deal through his representatives on the Board.

Bridgegate showed how the system inside the Port Authority has completely broken down and how New York's appointees on the authority were outside the loop for the GWB lane closures. Is it possible they’re outside the loop on the Skyway funding deal?

I consider that possible but highly implausible because all the major news outlets reported on how Port Authority funds were going to be reallocated to do the Pulaski project. That would seemingly implicate Cuomo as well. These issues should have been raised back then and there were questions about how the money was reallocated, though no one appeared to have raised the question about whether the reallocation was legal from a securities offering perspective.

How wouldn’t it implicate Cuomo? If the New Jersey cronies were the ones who ginned up the legal authority to shift the funds, ignoring other counsel, then the prosecutors might be able to isolate the culpability for the deal to Christie and his allies inside the Port Authority.

Frankly, the way Gov. Cuomo has screwed with regional transit and played games with MTA funding, I wouldn't be shocked if both were involved in these actions and that there was a quid pro quo for the Port Authority to spend a similar amount of funds on New York based projects.

Time To Fix New Jersey's Broken Transportation Policy

Gov. Chris Christie refuses to fix the state's chronically underfunded transportation system out of the state's own revenues. This includes roads, bridges, transit, and rail systems. Rather than increase the state's low motor fuel taxes and risk the ire of Republicans who would complain about the tax hike, he's used his sway at the Port Authority to use money originally tasked to building a new rail tunnel into Manhattan to fix several bridges that aren't part of the Port Authority's mission, including the historic Pulaski Skyway.

Fixing those bridges were overdue, but it means that funds that should have gone to expanding the state's crumbling infrastructure were instead devoted to projects that should have been covered by the state's transportation trust fund but for the fact that the fund is essentially bankrupt with no relief in sight.

Christie orchestrated a fare and toll hike at the Port Authority and then turned around to use some of those funds to go and fix the Pulaski Skyway, Wittpenn Bridge, and several other roads that are considered approaches to the Holland Tunnel, even though they are miles from the facility itself.

That's why New Jersey residents need to take matters into their own hands. If Gov. Christie wont increase the motor fuel tax or raise revenues to dedicate to transportation matters in the state, then voters need to petition to amend the state constitution to raise the needed revenue for dedicated purposes.

By fixing the state's own revenue situation, it can help get the Port Authority to refocus on the bistate projects it was designed to do. It would free up revenues to maintain and expand its facilities, including the Port Authority Bus Terminal, contemplate assisting in the construction of the Gateway Tunnel to double capacity on the Northeast Corridor, and expand PATH to Newark Airport while keeping its infrastructure in a state of good repair.

Currently, New Jersey imposes a 10.5 cent per gallon gasoline tax and 13.5 cent per gallon diesel fuel tax. It's a rate that is unchanged since 1989, and the purchasing power has seriously eroded. Together, they generate about $540 million annually. This amount has actually fallen in recent years because of declining driving and increased fuel economy.

If we assume that drivers will maintain their current amount of driving, a tax increase of $.10 per gallon on each of the gasoline and diesel tax would potentially raise about $500 million annually. It would not only replenish the transportation trust fund, but it would enable the state to fund sorely needed road and rail projects without resorting to deficit funding, fiscal gimmicks, and raiding the Port Authority to do projects.

To this end, voters should consider the following ballot question:

Constitutional amendment to set a state minimum wage with annual cost of living increases.
Do you approve amending the State Constitution to set a state motor fuel tax equal to 20.5 cents per gallon for gasoline and 23.5 cents per gallon for diesel and other motor fuels. The amendment also requires bi-annual increases in that rate if there are annual increases in the cost of living.
Yes
No

The interpretive statement would run something along the lines of:
This amendment to the State Constitution sets the State gasoline and motor fuel taxes at a level sufficient to fund state transportation projects. Half the funds would be dedicated to road, bridge, and tunnel projects across the state, while the other half of the funds would be devoted to supporting mass transit projects, including NJ Transit operations that have the effect of reducing motor vehicle usage, congestion, and pollution statewide. The level of the tax would be adjusted every other year to account for cost of living adjustments.

Residents know that the state's roads, bridges, and tunnels, are a mess, but Gov. Christie refuses to take the necessary actions to improve the structural problems with how the state funds its transportation and infrastructure budgets. Putting the question to voters would go a long way to fixing the problems.

For those concerned that the tax would be an economic hit, one should also count the economic harm done by having a crumbling infrastructure, where roads and bridges can no longer handle modern traffic loads, road damage to vehicles costs drivers hundreds, if not thousands of dollars in damage, and the state can't address its backlog of critical projects that need adequate funding.

The tax increase proposed would still mean that motor fuel purchased in New Jersey is cheaper than those of all the neighboring states by a wide margin. Including federal tax of 18.4 cents, New Jersey regular fuel costs motorists 33 cents a gallon in taxes overall. In Pennsylvania, it’s about 60 cents, and in New York nearly 70 cents, the group says. The 10 cent hike would still mean that New Jersey drivers would pay nearly 30 cents less per gallon than New York and 17 cents less than Pennsylvania.

End the Magical Balance Fairy Shutdown Myth

Let's go straight to the video tape.

Breaking News

That's from This Week With George Stephanopoulos this past weekend (10/04/2013) - starting around the 3 minute mark.

The transcript:

STEPHANOPOULOS: But Mr. Speaker, he says -- and he said it publicly on many occasions, that you came to him back in July and offered to pass a clean government funding resolution, no Obamacare amendments, that was $70 billion below what the Senate wanted. They accepted it. And now, you've reneged on that offer.

BOEHNER: No, clearly there was a conversation about doing this.

STEPHANOPOULOS: Several conversations.

BOEHNER: Several. But--

STEPHANOPOULOS: And you offered a clean resolution.

BOEHNER: But I and my members decided the threat of Obamacare and what was happening was so important that it was time for us to take a stand. And we took a stand.

STEPHANOPOULOS: Did you decide it or was it decided for you?

BOEHNER: I, working with my members, decided to do this in a unified way. George, I have 233 Republicans in the House. And you've never seen a more dedicated group of people who are thoroughly concerned about the future of our country. They believe that Obamacare, all these regulations coming out of the administration, are threatening the future for our kids and our grandkids. It is time for us to stand and fight.

STEPHANOPOULOS: But Mr. Speaker, this is clearly not what you want. I want to go back to several points you've made about this over the last few -- here you were right after the election with Diane Sawyer.

(BEGIN VIDEO CLIP)

BOEHNER: It's pretty clear that the president was re-elected. Obamacare is the law of the land.

If we were to put Obamacare into the CR and send it over to the Senate, we were risking shutting down the government. That is not our goal.

(END VIDEO CLIP)

STEPHANOPOULOS: So right there, you say that's not your goal. You don't want to put Obamacare on the CR. You did it.

BOEHNER: George, I have made it clear to my colleagues. I don't want to shut the government down. We voted to keep the government open.

Clearly, the Speaker admits that he had the opportunity to pass a budget, but refused because he and the rest of the Republicans decided to make it about defunding/delaying/destroying Obamacare. They had more than 40 attempts at repealing it, and failed on every single one, so their strategy became to tie the defund/delay/destroy to the annual appropriations cycle.

And it's time for all the media to quit playing that this is something that both sides made happen, or that the President and the Senate are responsible for this. The Speaker gave the game away and admits for all the world to see that the House GOP blew up a deal on a budget over Obamacare.

The Speaker has tied his legacy to the extremists in his party. He has become one of them by allowing them to dictate the terms of a deal that would end the shutdown. He has the power to end the shutdown by opening up the floor to a clean vote.

He refuses to do so, claiming that the votes aren't there.

If that's the case, then he has nothing to lose by letting the Democrats expend political capital in a failed effort to have a vote that wouldn't succeed. He'd gain politically by knowing that the count doesn't work in his favor, except that he, and everyone else, knows that this isn't true.

The math doesn't work in his favor. The votes are there, but the votes would undermine his ability to lead a fractured Republican caucus. So he's doing all he can to cast Democrats as the problem even though he clearly acknowledges that a deal was in hand but for the Republican insistence on destroying Obamacare as a precondition to a deal.

It's the poison pill provisions that the Republicans have offered up that have led us to this critical moment.

It's a clarifying moment - exposing the GOP extremism and extortion for what it is. It's an attempt to rewrite how government does business outside the regular legislative and electoral process.

Republicans will only agree to have these negotiations in a context where a government shutdown and the threat of default do give them that added leverage. This is an objective statement of the GOP position. Dems have offered Republicans the negotiations they want, once those conditions are lifted. Republicans have refused. Therefore, their position is that conditions which continue to threaten widespread destruction, giving them leverage, must remain for any talks to proceed.

The key tell is that Cantor and Ryan don't directly defend this position. They elide it. To be sure, both repeat the claim there have been negotiations attached to debt ceiling hikes in the past. But as Jonathan Chait explains, that isn't the same as dangling the actual threat of default and untold economic havoc as a way to extract massive one-sided concessions. Republicans cannot defend this tactic because they will not acknowledge they are actually employing it. John Boehner already allowed in March that the debt ceiling will and must be raised, because: "I'm not going to risk the full faith and credit of the federal government." But on ABC on Sunday, when Boehner was pressed on whether he'd actually allow default if Dems didn't give him what he wants, he repeatedly fudged, saying he would not allow a vote on a "clean" debt limit bill. What happens if default is the only other option? We just don't know.

Either Republicans are actually prepared to allow default and to use this frightening prospect as a weapon with which to get what they want, in which case such tactics cannot be rewarded, because they will all but ensure extensive destruction later. Or Republicans are not prepared to allow default, in which case the very notion that they have leverage here is a sham. Republicans are trying to use this ambiguity to their advantage. On the one hand, the uncertainty it creates is supposed to force Dems to give in to their demands. On the other, it is meant to obscure their actual intentions and thus shield them from politically potent charges that they are actually willing to place the country at grave risk to extract concessions they couldn't get through conventional channels.

The Democrats don't need to offer up anything other than a clean budget resolution on the terms they agreed to in July. That was already a concession on $70 billion on spending. The GOP took that offer and tossed it in favor of a political fight they cannot hope to possibly win.

The fight is already wearing down Republican polling and ratings for Congress in general. While Republicans are cheering that the President's approval ratings are at 37%, the Congress rates only 5% approval. The President doesn't face reelection and has a freer hand to use the bully pulpit to attack the Republicans for bringing about this crisis because they are trying to unite the base in opposition to health care reforms that would expand access to health insurance to millions of people.

The GOP has to engage in cognitive dissonance on a massive scale to reconcile its positions - that it wants to end the shutdown, avoid default, and recognizing the economic harms that those actions are having all while advocating for those same things and claiming that the damage is minimal. The GOP has to lie to itself and everyone else to do so, and the public is seeing through the lies.

The video clip above highlights the problems succinctly. Republicans who agree that the default will lead to widespread destruction, yet use this as leverage by refusing to deal unless the GOP demands (preconditions) are met are the worst of the worst in this ongoing saga. They're putting politics and passion over reality, economics, and national security.

Any Republican who hews to this position needs to be run out of office. And that's a list that is significant.

It includes none other than Speaker Boehner himself. He's claiming that he wouldn't let the nation default because of the harm done, and yet he's completely going along with the Tea Party wing in demanding that the Administration and Democrats accept their demands or else.

Or else what? Economic catastrophe if we don't do what the GOP says? It's extortion. And it's economic folly. The Speaker knows it, but by continuing to pander to the extortionists, he's one of them.

The GOP and the Speaker are guilty of target fixation. They've determined that destroying Obamacare is paramount, and are willing to do whatever it takes to destroy it. That might help keep the extremists in the party happy, but it is having tremendous damage to the polity and even greater damage is on the horizon if the debt ceiling is not increased.

It's all part of a larger fight by the GOP to slash and burn government spending at all levels, and it's a fight that the Tea Party relishes because they believe that they have a mandate to chop government spending, even though they are a minority within their own party. The tools that were supposed to get the parties to compromise and come to agreement have instead been used by the Tea Party to institute far harsher cuts and more destructive policies than if a compromise had been worked out.

The sequester is case in point. A refusal to work out a deal that targeted cuts and offer up even the slightest bit of tax increases or reductions in tax credits and incentives was rebuffed and refused. Instead, across the board cuts were instituted, and the GOP won the day. The Senate and the Administration are now working off the sequester figures - accepting the cuts. The GOP won that fight, and that's what's driving them here too. The GOP and Tea Party have flipped the tools and events that should force compromise into ones that bring about the very policies that they endorse - smaller government.

It's a worrying trend, and one that may lead the nation into default. With no reason or intention to compromise, the GOP will take the nation over the cliff. One can only hope that voters realize who's taking them for this dangerous ride.

The GOP.

Cross posted at LGF.

Obamacare Rolls Out Even As GOP Seeks Defund/Delay/Destroy Poison Pill Provisions In Budget and Debt Ceiling Talks

Yesterday marked the beginning of the Affordable Care Act's (ACA) health exchange rollout. While some refer to this as Obamacare with derision (and there are polls that indicate that people have a much more favorable view of the term ACA than Obamacare even though they refer to the same program/law), the purpose of the law is to provide access to affordable health insurance for more than 20 to 30 million people.

The rollout yesterday was not without its hiccups. Some people were met with overloaded servers so that they couldn't complete the registration, and there were some bugs in the process.

That is to be expected with any rollout of any major software/website. It shouldn't be a surprise given how the Republicans have sought to defund, delay, and destroy the ACA at every opportunity.

They've attempted to repeal the ACA more than 40 times in the House alone.

Years of litigation over the constitutionality of the law was concluded with a landmark decision that found the central provision, the individual mandate, constitutional. The GOP claimed that this was unconstitutional, even though the GOP and the Heritage Foundation had made the individual mandate a central part of their alternative plan to Hillarycare when that proposal was rolled out in the early 1990s. Republican Mitt Romney made the individual mandate part of the MassCare program.

But, the moment that the Obama Administration made it a central tenet of the ACA, the GOP savaged it as an affront to personal liberty. We'd have to have collective amnesia to follow the Republican argument and logic. We'd have to ignore that the ACA is modeled on the very successful MassCare, which has reduced the number of uninsureds in Massachusetts by expanding access to affordable health insurance.

Then, we get to the claims by the Tea Party extortionists who think that this is some form of socialism or worse.

The government created health exchanges where private insurance companies offer policies that include minimum levels of coverage that protect against catastrophic health costs to the individual that would otherwise bankrupt them or deny them further insurance. Insurance companies were instrumental in shaping the law, which is why the taxes and fees imposed by the act were written the way they were. Insurers wanted to be part of this - and they're going to be key facilitator to the Obamacare's success. Obamacare created an entirely new market that didn't exist before. That's a market capitalism failure. Obamacare sets up a situation where insurers can profit from millions of new insureds and their premiums (including the subsidies that help those who are eligible afford the insurance).

At the same time, insurance companies can no longer deny policies due to preexisting conditions or include lifetime limits. That's key to millions of people across the country who have had diagnoses for mental health issues, cancer, and other chronic conditions. Someone who was diagnosed with cancer as a child or young adult will no longer be denied insurance because of their cancer diagnosis. Someone who was diagnosed with lung or kidney disease that needs ongoing care will no longer be denied insurance.

People who are under the age of 26 can still be covered on their parents' insurance. That eliminates a period of time when many are in college and allow their insurance coverage to lapse (before the ACA, many insurers didn't allow dependents to stay on parents' insurance beyond age 21).

People with small businesses can now find insurance for themselves or their employees because the purchasing power of the exchanges helps reduce the costs to them.

And for those who think insurance costs are going up solely because of ACA have amnesia because health costs have been soaring for years (and this chart goes back decades). This isn't a new trend that began suddenly in 2009. It has been going on for decades as the cost of health care outraced the rate of inflation.

With this as the backdrop, the Tea Party extremists and the GOP have conspired to shut down the government with the extortionist demand that Democrats defund, delay, and ultimately destroy Obamacare in exchange for a short continuing resolution that allows government to continue operating. Thus far, Democrats have been resolute in defeating the GOP efforts, and some in the GOP are realizing that this is a losing hand and that they've screwed themselves and the nation of an opportunity to actually reform some of the problems with the ACA. The GOP's extremism in seeking defunding, delaying, or destroying Obamacare puts Democrats in position of having to defend the entirety of the program. They're willing to do this, even as some parts of the program should be further reformed. But a better situation than before the ACA is not the opposite of the perfect. The GOP claims that ACA needs to be repealed ignores the fact that the health insurance situation in the nation was a disaster and bleeding hospitals dry for indigent care.

Some Republicans are beginning to realize the damage being done to their party. This includes Rep. Peter King, who announced he was running for President, but also suggested that the government shutdown is the result of a cadre of extremists in his party who refuse to view the President as legitimate and are looking to roll back every single one of the President's achievements. They're willing to burn the government to the ground to achieve their ends.

The government shutdown is a minor trifle compared to the fact that the same Republican extremists are pushing poison pill provisions into the debt ceiling argument. They refuse to accept anything less than a defund/delay/destroy Obamacare for raising the debt ceiling, despite the fact that this Congress has already appropriated the funds. It is an incontrovertible fact that granting the hike does not authorize any new spending and failing to grant it does not cut spending.

These facts, and the fact that the polling doesn't favor the GOP, doesn't faze the Tea Party extortionists who think that if they take this to what they think is the logical conclusion that the Democrats will cave and they'll get the delay they seek. The polling suggests otherwise, but the GOP and its leadership are unwilling to confront the Tea Party cadre and put down this nonsense once and for all. In fact, expect the extremists to take the brutal punishment they're getting in newspaper opeds and editorials today as a badge of honor in rattling the mainstream media's cage.

However, House Speaker John Boehner can't or wont take those sensible measures because the Tea Party threatens to primary anyone who isn't sufficiently conservative enough. These extremists think that if only they have enough pure conservatives that they can succeed in taking down President Obama and his signature achievement in health care reform. Heck, there are reports that the Speaker wont allow a clean CR to come up for a vote because of the fear it might pass. That would effectively put Boehner in the extremist camp because he's catering to the very extremists who are shutting down the government.

Yet, he might be pushing this now, because if the debt ceiling isn't increased, it will result in damage that both sides acknowledge - a loss in credit ratings, increased borrowing costs, and tremendous damage to the US economy.

After all, if the leadership in the House drops the Hastert Rule, a bipartisan continuing resolution to fund government would happen today. If they adopt the Gephardt Rule, the nonsensical debt ceiling negotiations would be an afterthought since the budget appropriations process would allow for a concurrent increase in the debt ceiling to cover the contingency of the government spending more than it takes in revenue. In doing both, Speaker Boehner would marginalize the tyranny of the minority TP Extortionist camp, allow Congress to focus on the business of governance, and signal that the TP movement is nothing more than a bunch of nihlists who are willing to torch government in furtherance of a goal of denying access to health insurance for millions of people.

Cross posted at LGF. (Edited to add more link attributions to buttress the argument)

Gov. Cuomo Sets Course For Reelection Campaign With Tax Cut Gambit

Gov. Andrew Cuomo is hoping to win over some voters upstate with a plan that would cut somewhere from $2 to $3 billion in New York State taxes and fees.

In a surprising announcement scheduled for Wednesday morning, Cuomo will appoint former Gov. George Pataki and former Democratic state Controller Carl McCall to head a task force charged with finding ways to cut between $2 billion and $3 billion in taxes next year, a source with ties to McCall said Tuesday night.

Cuomo wants to announce an aggressive tax-cutting plan as he heads into his reelection run next year.

On the face, this makes perfect sense. New York has a reputation as a high tax state, but when you look under the hood, the tax cuts would do New Yorkers a tremendous disservice. There are several high profile projects around the state that are in dire need of funding, and some or all of the money to be cut would go a long way to funding those projects.

I'm talking about critical infrastructure improvements.

In New York City alone, there's Phase 2 of the Second Avenue Subway that needs to be funded so that the East Side of Manhattan commuters get relief beyond a stub line. Throw in bridge repairs and infrastructure improvements in the wake of Hurricane Sandy, and there's a pretty long list.

Then, there's Gov. Cuomo's pet project - the Tappan Zee Bridge replacement. It's waiting on confirmation of a federal loan program to fund the project, and the state has already borrowed nearly a billion dollars to get the project off the ground.

Upstate infrastructure needs significant investments, including sewer and water treatment facility upgrades, road rebuilding, and bridge repair or replacement.

Instead of cutting these revenue sources altogether, redirect some or all to fund infrastructure projects that will help modernize the state's crumbling infrastructure and to protect its residents from the effects from tropical storms and hurricanes.

Crumbling Infrastructure Watch

This morning, New Jersey commuters trying to get to the Holland Tunnel found themselves navigating a maze of detours and major delays as a key route was shuttered.

The emergency closure was the result of concrete falling from the covered roadway on Route 139 which is one of two major highways leading to the tunnel. Emergency repairs are underway, but the fact is that the roadway needs significant repairs. Replacement of the structure is more than needed as concrete continues to fall away from overhead.

Failing to invest in basic maintenance and upkeep plays a role in this. Heavy traffic pounds on these structures on a daily basis forming cracks that allow water to seep into the structures and begin the process of separating concrete from the reinforcing steel.

The closure in New Jersey is just the latest in a string of infrastructure failures across the state. Water main failures are a common occurrence and one that wastes a key resource and disrupts business in the affected areas. Water utilities and municipalities that manage their own water supplies are also failing to maintain their infrastructure - repairing emergency water main breaks rather than proactively replacing the oldest sections of mains and sewers to upgrade the system.

Heck, Newark has hundreds of fire hydrants that are inoperable because they lack sufficient water pressure or are otherwise damaged in some fashion. That affects public safety and yet there's an insufficient budget to address the concerns.

Far too many people want to see low taxes but ignore that the costs for maintaining an aging infrastructure have grown exponentially requires a growing budget to address those needs.

In New York City, the mayoral race has given little more than lip service to infrastructure and mass transit, which are keys to economic development and community vitality. The City has failed to restore funding to the MTA to help fund capital construction programs and has forced the agency to borrow to make ends meet. That has to change, or else the agency will find itself managing a system that increasingly is falling behind its attempts to get the system into a state of good repair. Hurricane Sandy exposed significant problems with the infrastructure, and not enough effort has gone in to make sure that the lessons are learned and applied to the system.

The Infrastructure Mess

Infrastructure and public safety once again come to the forefront with the collapse of the I5 Bridge in WA. It's looking like investigators are focusing on a truck that passed through the area shortly before the accident and whether it struck the overhead supports, knocking the span out of alignment. That would take quite a bit of force, unless other issues were at play (including corrosion and a lack of redundancy in structural support).

Time will tell what happened, but thankfully no one was killed in this collapse.

It's a reminder that we are spending far too little on maintaining and upgrading existing infrastructure. The amount we as a nation are spending on infrastructure has fallen to levels not before seen as a percentage of GNP over the past twenty years after peaking during the Stimulus period. We are spending far less in both real dollars and as a percent of GNP than other developed countries, despite critical areas that are not getting support.

Moreover, we're not getting out money's worth (bang for the buck) based on the costs compared to similar projects overseas. Two of the biggest projects are the East Side Access and 2d Avenue Subway lines. Both will improve access to NYC and reduce congestion by carrying hundreds of thousands of commuters each day, but for the cost of the first segment of the 2d Avenue line, several countries in Europe have been able to build out entire subway lines. The NYC subway system is the oldest in the country and essentially operates 24/7/365 with no lines shut down overnight as some of its counterparts elsewhere do. That's beginning the change with the FasTrak service to get repairs done faster and cheaper, but trying to add capacity to an already built-out system in a densely populated area is costly.

Yet, there's room to grow. There's a proposal floating around to get the outer boroughs connected using underutilized rights of way that the MTA doesn't currently use. The Triboro TX would loop through Brooklyn, Queens and Bronx, and link up lines so that commuters don't have to cross into Manhattan to get to their destinations. It makes tremendous sense, and could relieve congestion through Manhattan and wouldn't cost nearly as much as a new subway through Manhattan, except that the MTA doesn't have room in its capital budget to do it - and the lack of political will to get it done either. NIMBYs have been trying to get some of that turned into park, rather than revert to subways that would increase property values of neighborhoods along the routes and prospective station locations. Turnover at the top of the MTA isn't helping either.

But it still comes back to costs for infrastructure. We want it. We need it. It's indispensable, and yet we refuse to pay for it and politicians aren't going to do anything when they can't do ribbon cuttings (so basic maintenance gets shafted).

But big projects like bridges, tunnels, subways, and mass transit are just the tip of the iceberg on infrastructure and public safety.

In light of the tornado that destroyed the town of Moore outside Oklahoma City, there are some calls to require construction of storm shelters and storm cellars in new buildings and retrofit existing structures.

The Oklahoma Governor Mary Fallin is refusing to support a mandate that would require storm celler/shelter construction in new or existing structures. It's absolutely mind-boggling.

Despite the life-saving potential of personal storm shelters, the cost remains a deterrent. So, too, does a general resistance to government mandates in politically conservative states such as Oklahoma, where tornadoes are most prevalent. Even the director of an association of storm shelter manufacturers, based in Texas, is opposed to a storm shelter mandate for new homes.

"Any time a governmental entity says 'thou shalt' and tries to take an individual decision into the public domain, it's going to get pushback, and you're also going to raise the cost of things," said Ernst Kiesling, executive director of the National Storm Shelter Association and a retired civil engineering professor Texas Tech University.

The science of storm shelters has advanced considerably since Dorothy failed to make it to the tornado cellar at Aunty Em's Kansas farm in the 1938 movie the Wizard of Oz. Some shelters still are dug underground in the backyard. But they are increasingly made with specially fabricated concrete and steel doors to meet Federal Emergency Management Agency specifications. And they aren't necessarily underground. In some cases, closets or bathrooms are being fortified to double as "safe rooms" that can withstand furious winds even if the rest of the house is blown away.

In 2011, Oklahoma announced the SoonerSafe incentive program, offering federally financed rebates of up to $2,000 to residents who install storm shelters. The state uses a lottery-style drawing to select rebate winners from among the thousands of online applications. Sherry Wells said she won this year. She and her husband decided to get the biggest shelter available- a vault-like box with wooden benches - at a cost of $4,800. The project was so freshly finished that the Wells hadn't even submitted their rebate forms when the tornado hit on Monday.

"If it wasn't for the hand of God and the cellar, we wouldn't be here," Wells said as she sorted through the rubble of her home Thursday.

A little over 3,000 residential storm shelters are registered in Moore, a city of about 56,000, said community development director Elizabeth Jones.

Moore Mayor Glenn Lewis wants to propose a city ordinance requiring all new homes to have storm shelters. But realistically, he said, city officials may be able to require them only in new assisted living facilities and apartment complexes because of cost concerns. Contractors will be part of the conversation with the City Council to see whether a broader requirement is possible, Lewis said.

"We want to be competitive," he said. "We don't want to price them out of the market."

Asked at a news conference if a similar mandate might be considered statewide, Oklahoma Gov. Mary Fallin quickly shot down the suggestion.

Their primary concern is cost.

It would cost anywhere from $3,000 to $5,000 to integrate a storm room into a new build. That is the difference between life and death. In fact, one family who won a lottery to get a rebate for a storm shelter survived the Moore tornado just weeks after finishing the work but before they were able to submit the rebate paperwork. That family is alive because of the storm shelter.

The cost definitely works in favor of installing and mandating the shelters, as compared to the funeral costs for those folks who were killed.

This isn't about a lack of money. It's about lacking the will to make it happen and adjusting priorities to focus on public safety and well being. The state of Oklahoma, along with the other Tornado Alley states have no statewide requirements for requiring storm shelters in new buildings, let alone retrofitting them into existing structures. The costs can be depreciated and spread out over the life of the structure, and moreover, the costs can be absorbed simply by reducing the square footage of a private residence with the structure built in by 30-50 square feet.

NYC and TLC Making Mess of Taxi and Transit Systems

On top of a trial court decision yesterday that claims that the payroll tax used to fund the MTA is invalid, the Taxi and Limousine and New York City are doing their best to screw up the transportation system in the region.

The TLC has been updating the look for the ubiquitous yellow cabs. They've already signed off on a new design that isn't fully ADA compliant - because not every new cab will be required to be accessible.

Now, the TLC has decided to streamline the logos and information provided on the side of the cabs by stripping away all extraneous information.

T is for taxi, and that's good enough for the TLC. The look of the New York City taxi cab is changing again, and no we aren't talking about the Taxi of Tomorrow. Five years after the Taxi & Limousine Commission turned to Smart Design to create a new logo and graphics for NYC cabs they've gone and streamlined their work. We hope you don't like checking the current price of a taxi ride on the door of a cab!

Yup, going forward the fare panel on the side of taxis are no more. After all, we now have Taxi TVs to tell us that information (sigh). Also going away are the last vestiges of the checkered cabs as those black and white checks on the back are going away. Oh, and the word taxi. Yup, now cab doors will simply say NYC T (with the T in a black circle), not NYC Taxi.

"We have no doubt that a yellow car with a roof light with a big T will be understood as a New York City taxicab," TLC chair David Yassky explains. "Even the greenest of greenhorns will know that it’s a taxicab."

The cabs will now have a logo "T" and the cab identifier, but no other information.

They used to have Taxi written out, along with rate information.

Okay, they're trying to play around with branding, and a logo can be branded, but the word taxi can't. If that's part of the plan, then I get that.

But why drop the rate information? At a time when Mayor Mike Bloomberg has been pushing restaurants to include calorie counts on menus, he's allowing a policy that takes relevant information to commuters off the outside of cabs? How is that customer friendly? It's an asinine consideration, and the design team that came up with the plan spent just how much to revise the logos and information? It was a waste of money.

Meanwhile, back to the payroll tax. Ben Kabab highlights the multitude of problems with the ruling invalidating the tax. It is a huge hit to the MTA, which is funded in part from the tax. If it's upheld by the Appellate Division or State Court of Appeals, then the MTA would see a permanent loss of more than a billion dollars annually. That's money that can't be made up without slugging commuters or spreading out the costs to all taxpayers in the form of a new tax.

At the same time, a separate ruling invalidated the Mayor's plan to bring cab service to the outer boroughs. In that instance, the Mayor sought to make the changes in the state legislature rather than go through the City Council. The big problem is once again money. The Mayor bet a billion dollars on revenue raised from the sale of new medallions, and the court decision throws the city budget out of whack.

Taxi medallion owners have an inordinate amount of power to block any changes to the medallion system. They're vested in maximizing the costs of medallions, where the sale of an existing medallion can reach a million dollars or more. Allowing more medallions would dilute the value of existing medallions. The problem is that the medallion owners have the city council in its collective pocket and they've thwarted prior efforts to expand cab service to the outer boroughs where transit service is more spotty. The Mayor sought to change the status quo by going to the legislature, but this is a home rule issue. So, the Mayor has to go back to the drawing board to figure out how to expand service and close the budget hole of his own creation.

While he's at it, he better get on the TLC to make ADA compliance required across all cabs, not just a small fraction. And he could further assist in the transit policy by allowing disabled persons to use ADA-compliant cabs instead of Access-a-Ride buses that are costing the MTA far more than it ever imagined ($500+ million annually and growing). Since most cab rides are for far less than the cost per passenger for Access-a-Ride, a solution can be found here if the mayor, TLC and MTA can hash out an agreement.

But that means getting the medallion owners to back the changes.

Romney Chooses Paul Ryan For VP Slot

Mitt Romney has made his decision. He will go with Wisconsin Republican firebrand Paul Ryan as his Vice Presidental selection. It's somewhat odd to make that move on a Saturday morning, but it does mean he gets to dominate the Sunday talk shows, but it doesn't mean nearly as much press as if he held off until Monday - after the Olympics. People are still focusing on sports and not on politics at this point, but the Romney campaign must be feeling the heat and need to stem a tide of bad polling, and the fact that Romney essentially called for mercy to stop harping on Romney's tax and business records, and that Romney's own goals on health care reform and other assorted lies, misstatements, and gaffes.

Ryan will give Romney a short-lived bounce. It gives Romney a breather, but does it really benefit him in November?

Well, it improves his chances of holding on to the red-meat GOPers and right wingers, and could help with Wisconsin and Midwest, but that could be more than offset by the fact that Ryan's plan would gut the safety net - from Social Security to Medicare and Medicaid - programs that most Americans believe are good programs and are to their benefit (even if they may also think that some kind of incremental reforms are needed over time). After all, independents and moderates are going to have serious issues with what the GOP and the socons are looking to do. So, the overall effect will be negative since it reinforces everything that we already knew or expected from Romney.

Gov. Christie Seems Fine With Feds Managing New Jersey's Health Exchanges

So much for states' rights in Gov. Christie's eyes - he's open to the idea of letting the feds run the NJ health exchange.

Gov. Chris Christie said he is exploring letting the federal government set up the state health insurance exchange required by the federal health care overhaul to allow individuals to buy coverage.

He also said he is not sure that New Jersey needs to expand Medicaid under the federal law because the state's program that covers the poor and disabled is already so inclusive.

The Republican governor made the comments while appearing on Fox News Channel's "Fox and Friends" show, one of four national television appearances he was making Tuesday, a day after he told New Jersey lawmakers during a special session that they should cut taxes.

New Jersey legislative Democratic leaders said they had already agreed to a tax cut and accused the governor of trying to win more national attention.

Speaking on "Fox and Friends," Christie told about how he rejected the legislative Democrats' $800 million income tax increase, but he did not mention that it was intended only for people making more than $1 million or that the Legislature also adopted a tax cut plan.

New Jersey may not need to expand its Medicare program as much as some other states (think Louisiana, Florida and Texas for instance) to cover those uninsureds anticipated to be covered under the PPACA. It would be a more gradual and smaller expansion, but it would still bring more people into coverage than the current system.

I think that's Christie's way of finessing around the fact that the PPACA's individual mandate wont affect most NJ residents and that the expanded coverage would help those residents who don't have access to affordable insurance coverage.

As for the over portion of his appearance on Fox, the tax hike would have funded a larger property tax relief package, or funded transportation projects without the need for more bonding. He's mostly upset that he couldn't secure as large a property tax relief package as he wanted, and that legislative Democrats figured out a way to condition the property tax relief on meeting revenue estimates.

Considering that the revenue estimates aren't likely to be reached (they are at an unobtainable 7.2% growth estimate that flies in the face of current national and regional trends), the Democrats actually did the fiscally responsible thing by limiting the program to only when the state could afford it thereby avoiding a potential budget buster.

New Jersey's Legislature Takes Up Tax Relief In Special Session

Gov. Chris Christie addressed the state legislature in Trenton this afternoon and called on them to enact tax relief along the lines of the proposal he first offered earlier this year.

Senate Democrats countered that they provided tax relief to the tune of $183 million only if the state met the Governor's revenue projections. The contingency is a sound policy choice, but that isn't stopping Christie from hammering away at Democrats who are blocking this portion of tax relief.

Gov. Christie was far too aggressive in his budget projections and it's far too likely that New Jersey will not meet Christie's unfathomably high 7.2% growth rate. New Jersey budget projections for the fiscal year that ended June 30, 2012 fell short of its projections, and there's no reason to anticipate anything improving in FY 2013.

The conservative move would be to limit spending make conservative revenue projections so that if revenues come in better than anticipated, it grows the rainy day fund that can then be used to pay down structural debt, fund the pension fund, and the transportation trust fund.

Christie has managed to fund the pension funds to the tune of about $1 billion, but that's only beginning to put a dent in the chronically underfunded state pension funds. Much more needs to be done on that front.

At the same time, the state has to address the transportation trust fund so that transportation projects to repair the creaky infrastructure are addressed. The budget ends up using funds from the ARC project that were killed to fill part of the hole, while borrowing takes care of the rest. Additional borrowing only saddles the state with more debt and reduces the amount available for transportation projects in future years as debt service takes up an ever greater percentage of the budget.

Health Care Reform Act Survives the Supreme Court

In a huge surprise to many on the right, the US Supreme Court upheld the individual mandate provisions of the Patient Protection and Affordable Care Act of 2010 (HCR/Obamacare). The Court ruled that it was a constitutionally permissible tax imposed by Congress.

The bottom line of the Court's decision, where Chief Justice John Roberts broke with the conservative group (Scalia, Thomas and surprisingly Kennedy), is that the entire ACA is upheld, with the exception that the federal government's power to terminate states' Medicaid funds is narrowly read.

That overturns the decisions by the 11th Circuit that found the law unconstitutional.

As I've noted, the individual mandate serves as a tax, and that's the grounds on which the Court found that the individual mandate is constitutional. The mandate provisions are set forth at 26 USC 5000A (the Internal Revenue Code) and imposes an annual penalty of $95, or up to 1% of income, whichever is greater, on individuals who do not secure insurance in 2014, which rises to to $695, or 2.5% of income, by 2016 and after (and adjusted for inflation). Families are hit with higher penalties. There are exemptions to the "fine" in cases of financial hardship or religious beliefs

This is a not insignificant sum of money we're talking about. This provision is expected to raise several billion dollars every year it is in operation beginning in 2014, and is part of the revenue side of reforming the health care funding across the country. It is also seen as a critical tool to getting people into the health care insurance pools so that they can help spread the costs of health care for those who are more likely to utilize the insurance policies.

The tax and spend power of Congress is unquestioned. The question was how the Administration had considered this not to be a tax. I thought that was a poor decision on their part. The Administration focused on a Commerce Clause justification, but the Court found that the power was vested in the Congressional power to tax.

UPDATE:
The decision can be found here: NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL. v. SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. No. 11–393

North Dakota Voters Kill Property Tax Repeal; Religious Measures

North Dakota voters decided against repealing the state's property tax, much to the relief of the state's politicians, unions, chambers of commerce, and school districts upon which the property tax is the primary or significant source of funding. The measure lost badly, with most taxpayers realizing that the funding is critical to education.

If approved, it would have been the first time a state repealed a major tax since Alaska abolished the personal income tax in 1980.

At the same time, the state's voters rejected Measure 3, which would have caused all kinds of legal problems and would have likely raised 1st Amendment issues over restricting government actions on religious grounds.

The language of Measure 3 stated that a person has the right to act or to refuse to act in a manner due to a deeply-held religious belief. It would then be up to the government to prove that it has a compelling government interest in infringing on one’s right to act or not act. The measure’s proponents said that it was needed in order to strengthen people’s religious liberty.

North Dakotans Against Measure Three, the main group opposed to Measure 3, had argued that the wording of Measure 3 was vague. One example of vague language noted by opponents was that the government must prove it has a “compelling government interest” in infringing on a person’s religious actions. Another example was over government having to use the “least restrictive means” to further its interest.

Opponents said Measure 3 could’ve opened the door for people to use religious beliefs as a defense in breaking laws protecting against abuse, domestic violence and discrimination. Measure 3 proponents consistently denied this claim, saying that other states with similar laws in place haven’t had such issues.

Christopher Dodson with the North Dakota Catholic Conference said he was disappointed by Measure 3’s rejection by voters. Dodson said in a statement that efforts will continue to strengthen religious protections for North Dakotans.

“We will not rest until religious freedom in North Dakota is protected in the law as a fundamental human right,” Dodson said.

If Measure 3 had passed, North Dakota would’ve joined 12 states that already have passed religious liberty laws: Arizona, Connecticut, Florida, Idaho, Illinois, Missouri, New Mexico, Oklahoma, Rhode Island, South Carolina, Tennessee and Texas. Alabama is the lone state to have added a law to its state constitution.

Two other measures were considered yesterday in North Dakota. The voters approved a measure to override the Legislature's decision to keep the University of North Dakota's mascot - dropping the Fighting Sioux nickname. Measure 1 was also approved, and allows legislators to be appointed to full-time appointive state offices.

California Considers Tobacco Tax Hike With Legislature On Sidelines

California currently imposes a cigarette tax of 87¢ per pack of 20 cigarettes. That's well below the rates imposed in a number of other states, including neighboring Arizona ($2 per pack) or Oregon ($1.18 per pack). It's slightly higher than Nevada's 80¢ per pack. By comparison, New York imposes a $4.35 per pack (NYC is $5.85), New Jersey is $2.70 per pack, and Connecticut is $3.40. Out on the West Coast, Washington imposes a more than $3 a pack tax.

Consumption rates have dropped in the NYC metro area with the combination of higher taxes and more restrictive locations where smoking is permitted, which creates its own problems.

Health programs funded with tobacco taxes would see lower appropriations unless the taxes are increased to cover losses (and those who kick the habit because of higher taxes/restrictions). If the state doesn't hike the taxes periodically, the programs lose necessary funding and have to curtail their operations or else draw upon general funds instead (which in CA isn't possible due to its budget woes).

The question becomes whether the tax hikes will deliver the revenues projected, and what happens to the programs when the revenues fall short (does it require higher and higher taxes or shifting funds from other programs to cover the health programs funded by the tobacco taxes).

Californians not only have to deal with the potential windfall due from a potential $1 per pack tax hike on cigarettes, but a general distrust of the state legislature to spend the money wisely. They might be for a cigarette tax hike, but they're against the legislature spending it.

The tax, which would raise an estimated $735 million, is being voted on as California is reeling from a new wave of bad budget news. Gov. Jerry Brown announced last month that the state was facing a deficit of $16 billion, and he proposed a round of severe spending cuts to deal with it.

But none of the $735 million would go to close the deficit. Organizers argued that the tax would have less chance of passing if voters thought it would go into the state coffers, and said that their only goal here was cutting down on smoking. Raising the cost of tobacco has proved to be the most effective way of discouraging smoking, particularly among teenagers.

“The voters in this state are disinclined to give money — even tobacco money — to the Legislature to spend: they don’t trust them with the money,” said Don Perata, a Democrat and former president pro tem of the State Senate, who is the author of the proposition. “We’ve become such a damned antitax state that we’ve demonized any kind of tax.”

Still, the image of a $735 million windfall rushing in at a time when California is facing a three-week cut in the school year has proved, at the least, discordant. The editorial board of The Los Angeles Times, while proclaiming itself uncomfortable to be siding with the tobacco industry, urged voters to defeat it.

“It just doesn’t make sense for the state to get into the medical research business to the tune of half a billion dollars a year when it has so many other important unmet needs,” it said. And opponents have seized on this as one of their central arguments.

“Isn’t that a little strange?” said Michael C. Genest, a former director of finance for the state who worked as a consultant to the “No on 29” effort, noting that Mr. Brown had just announced the state’s latest budget shortfall. “It’s astonishing to me that someone would go to these lengths to have a major tax increase and none of it would go to the budget.”

At 87 cents, the cigarette tax here is about half the national average, and it ranks 33rd in the nation — down from the third highest in 1999. California is one of only three states that have not raised the cigarette tax over the past decade. About 12 percent of Californians now smoke.

The money would be dedicated to cancer research and smoking cessation programs, not balancing the budget. Proponents believe that the limitation on where the money goes in the state budget is a plus; anti-tax sentiment is such that no one trusts the legislature to spend the money appropriately.

Opponents in the tobacco industry are apparently so fearful of this initiative's passage that they're throwing serious money to stop it: $47 million.

New Jersey Bipartisan Budget Idiocy Abounds

NJ politics and you - screwed up together. The OLS issues a budget notice finding that the state will end with a deficit of more than $600 million, and yet Gov. Christie (a Republican) and State Senate President Stephen Sweeney (Democrat) are pushing ahead with a compromise tax cut plan that the two hashed out that will cost even more money and requires one-shot borrowing from the state's nearly empty transportation trust fund to balance the budget).

The compromise plan, along with the plans that both Gov. Christie and legislative Democrats were originally touting, are the height of fiscal irresponsibility.

Everyone in Trenton appears more than willing to disregard the budget deficit and go with the tax cuts because it will mean votes in November. They've thrown fiscal responsibility out the window for a few votes.

That's what this is all about.

Sweeney's trying to convince his caucus to go along with this (even as some members had been pushing for a different kind of property tax relief - still costly, but touted as more focused tax breaks for the middle class than the governor's income tax cuts, which would help the high income earners more).

Where did all the supposed fiscal conservatives in Trenton go? They've disappeared, if they ever existed at all. It was all just so many talking points, rather than a dedicated effort to get the state's fiscal house in order.

In other words, it's just the same old tired routine as it has ever been.

New Jersey taxpayers will be stuck with this mess, even as the state's infrastructure continues falling apart.

Gov. Christie Wont Scale Back Tax Cuts Even As Deficit Mounts

The New Jersey budget is required to be balanced pursuant to the State Constitution. How it gets to that point is up to the Governor and the legislature.

Gov. Chris Christie is determined to make good on his plan to cut income taxes, even though the latest budget projections are showing a much larger deficit than anyone had expected. It's now up to $668 million, which would normally call for a cutback on tax cuts so as to maintain the current level of spending.

Instead, Gov. Christie is looking to use transportation and clean energy funds to cover the shortfall all while maintaining the size and scope of the tax cuts.

That shortfall was announced by the Christie administration during an Assembly Budget and Appropriations Committee meeting Wednesday, with the state treasurer acknowledging to lawmakers that the Republican governor’s spending plans must be revised because Christie overestimated the scale of the state’s economic recovery.

The governor’s earlier estimates predicted a state economy that would outpace any other state in the country and be enough for tax cuts and increased spending.

Yet even as Treasurer Andrew Sidamon-Eristoff politely downplayed the difference between the administration’s revised estimates and a new forecast put forward Wednesday by a non-partisan legislative budget analyst, Christie attacked the analyst personally.

“Why would anybody with a functioning brain believe this guy,” he said during a speech to transportation contractors in Trenton. “How often do you have to be wrong to be dismissed?”

Back at the committee meeting, Christie’s treasurer, however, told lawmakers that change needed to come.

“Although our revenue base is growing, the rate of growth for fiscal 2012 so far has not met the expectations we set, as of either the fiscal 2012 Appropriations Act last June or the governor’s fiscal 2013 budget message in February,” Sidamon-Eristoff said.

Democrats immediately criticized part of the governor’s plans to handle the shortfall.

They said a raid of the transportation fund — which will bring on new borrowing — means taxpayers will now have to pay interest to fund a budget that includes the income tax cut Christie has been touting since January at events from Garfield to California as his name has been floated as a possible running mate for presumptive Republican GOP presidential nominee Mitt Romney.

Borrowing against the transportation fund robs it of both current and future funds. It means that the state's interest obligations rise and deprives future years of spending that would have otherwise been possible.

New Jersey can ill afford to cut its transportation budget. With far too many bridges, roads, and other infrastructure that is obsolete or in need of replacement/repair, the transportation budget is far too small as it is. Cutting it further will only put transportation officials even further behind on trying to keep up with current work.

Christie's move might make sense if the budget situation was a neutral to slight deficit, but it is fiscally irresponsible to make such a move when you're talking more than a half a billion dollar shortfall.

As I've been saying for quite some time now, the Governor's budget projections have been overly optimistic and it's running into a brick wall of reality. The state economy hasn't rebounded anywhere near as much as the governor forecast (it hasn't even made it as well as the OLS forecast). A far more conservative forecast would have prevented the state's budget from being that far off - and had the budget situation improved, it would have left the state in the position of having a surplus that could be used to fund pension obligations, a rainy day fund, and to eliminate debt.

Instead, we're seeing Christie falling into the same trap as previous governors - using fiscal gimmicks to balance the budget and raiding state trust funds to cover current year obligations rather than taking the hard steps of balancing revenues with obligations.

New Jersey Revenues Coming In $300 Million Below Projections

The New Jersey Department of Treasury announced that revenues were coming in about $300 million below projections, which isn't nearly as bad as the Office of Legislative Services estimates, but it still puts a crimp on Gov. Chris Christie's plans for tax relief.

He’s also banking on a huge economic upswing during the budget year that begins on July 1, using that growth to support his “Jersey Comeback” budget and its signature income tax cut.

But if the current trend holds through the end of June, Christie will have to cut spending, dip into surplus or do something else to meet the state constitution's requirement for a balanced budget. The trend could also make it more difficult for the governor, a Republican, to pitch the first phase of his income tax cut proposal or convince Democrats who control the Legislature to enact some other form of a cut – something many expected to occur on Monday.

Instead, an expected deal between the governor and Senate President Steve Sweeney, D-Gloucester, was shelved, and Treasury officials delayed a planned release of the revenue information from Monday until this morning.

That new information on New Jersey revenue shows that tax collections fell short of budget projections by a full 5 percent in April, which is typically a make or break month for state finances every year after annual income tax returns are filed.

The poor April performance leaves New Jersey with $19.3 billion in revenue heading into the last two months of the budget year, according to the data released by Treasury. Christie had projected state tax collections of nearly $19.6 billion.

He's going to have to come up with some kind of compromise plan to achieve tax relief and maintaining a level of services that legislative Democrats will go along with. There have been rumblings of a compromise deal that would provide tax relief, but a presser for yesterday was cancelled - presumably over the fact that the Treasury didn't announce its own figures on which the politicians could work from.

I'm not quite sure why the Record indicates that there's a $230 million gap, when the body of the article indicates that there's $19.3 billion in revenue versus projections of nearly $19.6 billion - that's closer to a gap of $300 million than $230 million. Either way, Trenton has to come up with the difference and balance the budget.

UPDATE:
The Department's press release indicates the $230 million shortfall, which the Record parroted, despite the discrepancies with the numbers they used to describe the budget figures.

The figures also show that there is some strength in the state's economy. Sales tax revenues are up somewhat, but the casino revenue is down significantly (probably due to the vastly expanded competition in both New York and Pennsylvania that are siphoning off gamblers).

The tax revenues from corporate banks and financial institutions is also way off the FY 2011 figures.

New Jersey Budget Projects Will Hamper Gov. Christie's Chances To Keep Promised Tax Cuts

As I've been warning for quite some time, budget projections have been far too rosy and assuming growth when one should take a far more conservative outlook on the figures.

By assuming growth in excess of what one should reasonably expect, you set up the potential for budget deficits and that's precisely the situation that Gov. Chris Christie is facing in New Jersey. He offered up a more rosy outlook than the state's Office of Legislative Services (OLS), and with the new projection likely coming in even lower than the OLS projections from earlier this year, the budget talks for the upcoming fiscal year are going to focus on just how much money is available for property tax relief - whether in the form of a tax credit or other relief.

Back in March, the OLS had projected that the revenues would be $537 million less than what Gov. Christie had expected. The new figures are going to be announced this week, and it is likely to spur a cut in what kind of tax relief can be offered because revenues simply aren't coming in at levels necessary to fund the property tax relief.

Once again, the state's legislative leaders and governor are playing games with the budget situation and offering up solutions that require revenues that aren't sustainable. They are making promises that they can't or shouldn't be able to keep. Each time they do, it puts the state on an unsustainable level of services; one that would require significant tax hikes or cuts in services to maintain the existing infrastructure.

Now Is Time For New Jersey To Purchase Properties Along Route 17 Corridor

Route 17 through Bergen County is one of the busiest corridors in the state, and traffic congestion is a constant companion to drivers on the stretch between Route 4 in Paramus at the Garden State Plaza and Essex Street in Hackensack. While the rest of Route 17 is a three lane divided highway with paved shoulders leading to businesses, this particular stretch is only two lanes wide, and in some places there aren't shoulders.

Thus, when there are accidents in the area, it can cause massive backups and delays.

View Larger Map

Plans to expand the highway to three lanes in each direction, along with building modern highway overpasses have been floated in the past, but the time is ripe to go ahead with the project now.

Several businesses along the stretch have gone out of business recently, and for sale/lease signs are posted. That would make purchase by the state or localities for the purpose of expanding the highway easier - and less costly.

After all, one of the most expensive portions of the project isn't construction - it's the acquisition costs of property along the highway right of way.

Yet, the mayor of Rochelle Park is opposed to the $200 million proposal. He argues that the expansion would adversely affect traffic in town. That makes little sense, particularly because traffic congestion increases pollution from vehicles sitting in traffic each time the traffic slows down (an all too common occurrence.

In particular, the town claims it would lose $1 million in ratable properties annually as a result of the expansion. That seems particularly far-fetched considering that the properties along the right of way are in several cases marginal properties to begin with and have had difficulty in securing leases. Traffic congestion reduces the chances that people can utilize those same businesses and while several homes would need to be obtained through eminent domain, the benefit to the town as a result of eliminating the traffic bottleneck would mean that drivers on side streets would see improved flow because drivers wouldn't need to seek alternative routes to avoid congestion on Route 17.

Some of the same businesses that sought to block the project have themselves gone out of business or relocated due to the poor economic environment.

Gov. Christie Issues Budget Recommendations

New Jersey Governor Chris Christie has issued his budget recommendations for the upcoming fiscal year, and he's increased spending by nearly $2 billion dollars to $32.1 billion. The full text of his speech is here, but I think we're heading for a repeat of problems.

There's a little bit of something for every group, including increased spending for education and the first portion of his proposed tax cuts:

The budget put forward by Christie projects total state revenues growing by more than $2 billion during the next budget year, which begins on July 1 and runs through June 30, 2013.

"In one word, it's all about growth," state Treasurer Andrew Sidamon-Eristoff said in an earlier briefing with reporters. “The trend line is clearly positive.”

The projected revenue growth will cover a $121 million increase in formula aid to schools and a more than $1 billion payment into the grossly underfunded state pension system.

The increased revenue would also provide enough money to offset $530 million in planned tax cuts, including $183 million in revenue lost to the first phase of Christie’s proposed three-year income tax cut.

Despite the planned growth, the governor’s spending plan does not increase Homestead property tax relief even after property tax grew on average in 2011 to a record-high statewide average of $7,759.

The budget also provides flat funding to hospitals, cuts overall aid to towns and leaves the state with a razor thin surplus fund of $300 million.

Christie, however, does increase spending in other areas and pays for his tax cuts by banking on that increased revenue.

“Because we have made the tough choices in these last two years, we can make the right ones now,” he said.

Tough choices had to be made, but now we're about to abandon the tough choices by increasing spending beyond what we should rightfully expect in terms of tax revenues. The budget should probably fall into the $31 billion range, not the $32 billion range - the expected revenues for the upcoming year can't support the levels Christie proposes. That would hurt his chances to get tax cuts, so he's figuring on a 7% increase in revenues even as revenues for the current year are lagging estimates.

I would much rather see the state spend more on infrastructure to make a down payment towards getting critical infrastructure rebuilt, replaced, or built, as well as vastly increased pension contributions to make up for the historical shortfalls to help bring the pension funds into balance. They aren't sexy programs, but they are critical to the state's future obligation.

Even as property taxes continue to rise, they are doing so at a lower rate than in past years as a result of reforms instituted during Christie's term. Additional state aid would further reduce property tax hikes - the primary reason that property taxes are what they are. However, let's not forget that the personal income tax was imposed as a way to reduce property tax burdens, the sales tax was increased to pay for property tax relief (that was then scaled back while keeping the rate at the same level), and now New Jersey has one of the highest overall tax burdens in the nation.