Archive for the ‘Economy’ Category

So, the ARC tunnel project will be put to rest in a fashion akin to lethal injection. We sorta knew a month ago that this was coming when Governor Christie suspended all new work. So, it was no surprsie when the final announcement came down Thursday.

Here is what is interesting: how quiet labor has been. The cancellation of the tunnel will mean the loss of 6000 jobs at a time when the building trades are running at 30% unemployment. We have heard outrage about the end of ARC – although mostly from Democrats. People down south and along the shore ( who voted for Christie in huge pluralities ) are probably satisfied that New Jersey’s money for ARC may soon be diverted to shore up the Transportation Trust Fund, and not some North J project. More on that in just a minute.

I’m told by a few people associated with organized labor that they have been “holding their fire.” and the reason is because the Christie Administration reached out to these groups and told them to mute their criticism if ARC goes down on the understanding that the Governor will indeed transfer that $2.7 billion originally slated for the tunnel into the TTF; thus guaranteeing future work for the trades on other projects – roads, bridges, highways.

Could it be??? Labor not supporting their friends the Democrats in order to cozy up with the Republican Gov??? Well, no one wants to talk about this on the record but that appears to be what is happening. I mean, as long as the union guys get work…who cares what it is, right?

But herein lies rub…critics say even a $2.7 billion shot into the TTF is a “short term fix.” Not necessarily. In a very under-reported development, when work on 100 projects statewide was suspended on Monday, then subsequently resumed after a bond sale, not all of them were actually – well , resumed. “Early phase work on new projects continues to be on hold,” says Joe Dee from DOT. That is pending a top to bottom review of their worthiness. That means a scale-back is coming to stop burning through so much TTF money so darn quickly. Moreover, at least one insider says Christie is looking at ways to make an infusion of cash go even further. For example, by taking salaries outta the TTF ( which is a lot of money ). The TTF money would then only be used for capital projects.

So, if that money wouldn’t be going to solid union salaries, is there a possible bait and switch here?? Could that mean New Jersey would wind up outsourcing the work to cheaper firms??? I’m not sure, but perhaps labor should investigate that before they hold their tongues on ARC’s suspension.

In conclusion, you gotta give the Gov credit. While he has a reputation for bluster, he has actually been quietly euthanizing his potential adversaries and buying off other critics with a mixture of carrots and sticks. Let’s do an update on the Teresa Ruiz situation. Christie was annoyed Joe D could not force her to abstain on the subpoena vote in the Senate last week ( see earlier post ). Was I the only one who noticed she was the only legislator not invited to share the stage with Christie at the UMDNJ event Wednesday???

Well, if the actual subpoena hearing this Thursday was an indication of how Ruiz is coping with Siberia, it sounds like she’s feeling awfully cold being out of the circle of trust. As Senator Kean was running interference before the hearing even started ( gotta give him credit too btw…the Schundler stuff was both damaging and new, and Kean did his best to smother and obscure it ) Ruiz chimed in on his side. In fact if you look at the broadcast piece I did for NJN News, she can be heard off-camera furiously interrupting Barbara Buono to second Kean’s motion that would allow Kevin O’Toole to substitute for Joe Kyrillos on the Legislative Oversight Committee. It’s worth a listen.

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When Governor Christie halted forward momentum on the ARC tunnel he expressed concerns about possible cost overruns. But there might have been something more going on here.

Democrats are speculating that Christie wants to use New Jersey’s $2.7 billion in ( supposedly ) committed ARC tunnel funding to instead shore up the Transportation Trust Fund. Christie has said that he will come up with a plan for TTF soon. And since we know it won’t involve raising taxes, and there is no magic pot of money hidden underneath the State House near Petty’s Run, this would be a logical fit.

In essence, the money could be redirected to the TTF. When reporters put this theory to Transportation Commissioner Jim Simpson in the hallway of the State House Annex Thursday he said, “I don’t know. I don’t know. I don’t know.”

Hmmmm. Do you think he knows?

Well,$1.25 billion of New Jersey’s ARC funding comes from the 2008 toll increases and is therefore under the control of the Turnpike Authority. Without having to go through the legislature, Christie could presumably redirect that money to the TTF. He wouldn’t even have to go through his old pal JBOC ( that’s an inside joke ). However, some of the money also comes from other sources, and the path to usefulness for those dollars is less certain. A good portion of those ( supposedly committed to ARC ) other dollars are from the federal gas tax. And that means Christie might also be able to redirect them without Democrats being able to do much of anything.

When Administrations change, so do priorities.

Programming Note: I wanted nothing more than to see Raiders of the Lost Arc when it came out almost 30 years ago. However, my parents were troubled by the scariness/violence ( since i was young ), particularly the ending scene where the Nazi faces melt off. However, A recent viewing of that film through modern eyes reveals that the questionable scene is not really “scary,” but laugh-out-loud funny with how fake it looks.

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Ah, summertime. Beaches, Barbecue’s, cold beer and tool kit legislation.

And so it begins. The long budget debate that started in March has carried over into what I will officially call late July. It really is all part of the same conversation. And conspiracy theorists are convinced that Governor Christie has forced this march to continue in order to get people’s attention off the ultra-frugal budget which even it’s biggest supporters describe as “painful.” But the austere budget doesn’t work properly without a cap, and the cap cannot be reasonably enforced without enacting the major provisions of the tool kit. So it really does all go together, and it really is Christie’s entire economic agenda. All. At. Once.

But this process feels sooooo looooong, doesn’t it? It’s like that ridiculous song from the 1970’s “In-A-Gadda-Da-Vida.” It just goes on and on and on. Like the plot of that movie “Dune.” My goodness. Please,  just make it stop.

Maybe supporters of the toughest tool kit bills are hoping no one has the fight in them when it’s hot outside. And all the shiny, suited-up State House dwellers are thinking more about their upcoming two weeks at the shore than they are about how eliminating civil service will affect their cousin’s municipal job. Yeah, maybe this whole thing is by design. A plot to wear down the resistance and enforce an agenda the gleams with fiscal restraint, financial accountability and the end of living large off the public dime.

Let’s hope so. And let’s hope people don’t come back in the Fall and exclaim, “what have they done??!!” Let’s assume for now that while the changes are being made everyone’s head is firmly in the game. Because in the end, it’s harder to fix things after the fact then it is to get them right the first time.

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We hear an awful lot about why people are leaving New Jersey – taxes too high, cost of living is unaffordable, not enough private sector work. Lost in those valid arguments is a solid exploration of why people move here. That is the other side of the coin and it is an equally important discussion to be having.

People like their individual towns. They move here and stay here because they like that quaint hometown feeling. They like having their own town hall. They like their own police force, and they like that the schools are good. People enjoy the Penny-Lane romanticization of riding down main street with a fireman washing his truck, waving and calling your son by name. It’s not a fantasy. For some it is real life. But guess what? Those things cost money. The town hall requires maintenance and upkeep, the Police Chief probably makes $125,000 and those schools are “good” because they have nice grassy fields, smart committed teachers and a lunchroom that won’t make you gag.

So, when you start cutting money from those things people get nervous. They are not nervous yet, because right now there is this anti-property tax fever that has led to what some have argued is an arbitrary and perhaps hasty 2% cap.

The counter argument to supporting a cap above all other considerations is this: people might be even more inclined to leave the state if all those things that made it so appealing in their chosen town start to falter. Suddenly, that once cute town hall needs a coat of paint and looks shabby and rundown since the local Public Works Department laid off half it’s staff. That Police Chief is gone, along with a handful of those nice cops who you once played football with in High School. And finally, the school no longer holds a competitive advantage because young, qualified teachers don’t wanna relocate there…the pay is too low.

Another point to consider – we are living in a unique period of history. The economy really is as bad as it has been in several generations. But it will turn around. These things are cyclical. And if there is one thing we have learned about a crisis it’s that it doesn’t always lend itself to rational policy making. Particularly when the decisions that will greatly impact communities are made under duress over a holiday weekend.

I mean, look what happened with TARP. In 2008, the economy was in a full meltdown. Congress rushed in to pass the nearly $700 billion bank bailout. They attached no requirement that the banks then use that money to lend. And they put no stipulations on how it should be spent. I am not an economist so I don’t know whether that bailout was even necessary. My thought is that you let the guys who gambled with other people’s money go down. Nothing would have prevented a repeat performance more than letting the Capitanes of Industry go down with their respective ships. But regardless of what the right response was or should have been, it’s probably safe to say the legislation could have been a little less “we trust you’ll do the right thing” and a little more “this will guarantee you do the right thing.”

Finally, there is the Reform New Jersey Now element. This organization has been running ads urging action on the cap. Democrats have called on the Governor to disclose the donor list. Mike DuHaime, the Governor’s campaign strategist has said they will do so by the end of the year. The group’s tax status is such that they do not have to reveal that donor list. However, is it strange that this unknown group of people are driving the policy agenda in New Jersey? Not only driving it, but making sure lawmakers agree to a cap deal over July 4th weekend, and that it gets voted on within a week. Does that make good policy? Maybe. We’ll see.

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Alright, so we have been waiting to hear from Governor Christie’s task force studying the gaming issue ( set to report this week assuming it is on sked ), and now we have Democrats calling for a “Gaming Summit” to figure out what to do. Basically, everyone is still wringing their hands trying to determine the best way to balance the competing interests of the Atlantic City Casinos and the Horse Racing Industry.

The race tracks want to bring in slots and VLT’s to attract new customers, but the casinos have been saying “no” to that for years.

Here is my question…when are the casinos gonna stop trying to stifle competition and simply make a better product?? I mean seriously, the amount of money they spend on lobbyists and other efforts to engineer a New Jersey that is devoid of anything that might harm their bottom line is in the long run, truly counter-productive. That money would be better spent reinvested in their casinos. Shouldn’t they just accept that we live in a changing world and work instead at making AC such an awesome place to visit that people wanna come there no matter what???

Don’t get me wrong. I love Atlantic City. Anytime I spend 24-hours there I can assure you that it is packed with lots-o-fun. But it could be better. And a coupla years ago I did actually have a bit of an uncomfortable moment when I wandered off the boardwalk to hit the nearby liquor store ( not quite as scary as my recent visit to “The Liquor Barn” just outside Indianapolis, but that’s a whole other story ). If there was a slight makeover to the surrounding area I think people would feel better moving around off the grid which would be good for the surrounding businesses as well as the casinos ( Um, Yes. I realize none of what I am saying here is remotely original or particularly insightful  ).

Now, let’s talk about the ponies. The bottom line is tastes are changing. Nobody young goes to the track anymore ( at least at the Meadowlands ), and any guy who still does is a bit of a throw-back. I bet he smokes Pall Mall cigarettes. And he probably still gets a little misty-eyed when he hears Gordon Lightfoot tunes…particularly that one about the crew of the Edmund Fitzgerald. That guy is a relic, folks. The race tracks ( in which NJ is heavily invested ) need some new entertainment. And not necessarily of the untoward variety…but different types of gambling options – tables, slots and sports wagering.

Ok, there. I’ve said my piece. Now who wants to meet me in AC this weekend?

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They say that China is currently undergoing the largest military build-up since Japan’s efforts prior to World War II.

Hmmm. I can’t say that makes me feel exactly safe. Although conventional wisdom seems to suggest that an economic dispute with China ( the most likely precursor to war ) would result in some kind of cyber attack that would cripple our ability to function and provide services. In other words, they might be more inclined to try and undermine The US from within by causing pandemonium in the streets instead of a boring old conventional military attack. Somehow I’d rather take my chances with the former option rather than see Red-starred tanks rolling up on West State Street.

What the hell am I talking about??? Oh right, the CWA. Here in New Jersey, the state’s largest public employee union is also building up for war with the Christie Administration.

In a letter sent out to members last week, union leaders are asking for more money. They want to establish a Strategic Industry Fund that would pay for media defending public workers. That includes tv commercials. The local presidents have already approved this fund, and now they are asking members to sign off. It would cost an additional 1/10th of 1% of pay. They argue that almost every other bargaining unit in the country already pays more in dues specifically to cover media.  Here in NJ for example, the NJEA already pays the special assessment.

The letter to CWA members reads “No one can work in New Jersey and not be aware of the attack we are under that includes budget cuts…a plan to eliminate Civil Service…and a “toolkit” designed to destroy us.”

It continues with “The disastrous economy has created the perfect storm for this Governor to make us “Public Enemy” number two, right behind the teachers.”

In nearly 30 years, CWA has never raised dues. So, it sounds like the sleeping giant is looking to quietly up-armor and be ready for what they believe will be a protracted war.

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The flip the script moment in the great national health care debate came late in the game. In January, after the Scott Brown victory in Tax-achusetts, it seemed like there wasn’t much of a public appetite for comprehensive reform.

But a couple of months later it was the President himself  who pointed out that Republicans keep yelling from the rooftops ( And by that I mean on Fox News ) that the Democrats will suffer a major bloodbath in the mid-term elections if this massive health care bill ( which besides being enormously complicated essentially expands Medicaid ) goes through. This is from a March 8th NY Times article:

“We may be nearing the final act for this bill and the legislative process,” the Senate Republican leader, Mitch McConnell of Kentucky, said in a floor speech on Monday. “It’s just the beginning for those who support it. Americans don’t want this bill. They’re telling us to start over. The only people who don’t seem to be getting the message are Democrat leaders in Washington.”

Mr. Obama scoffed at Mr. McConnell’s warning.

“First of all, I generally wouldn’t take advice about what’s good for Democrats” from a Republican, Mr. Obama said to laughter in Pennsylvania. “But setting aside that, that’s not the issue here. The issue here is not the politics of it.”

Of course we know what happened next…the bill was signed on March 23rd. And here is the funny thing…Obamacare may wind up helping New Jersey ( the state which elected the antithesis of Obama nine months after the new prez took office ). I’m told that certain Federal Medicaid rebates ( perhaps up to 8% ) for managed care may become available in the third quarter of this year. That could mean tens of millions of dollars that would help restore funding which will enable the state to make funds available elsewhere and perhaps soften the blow of other proposed cuts.

We caught a glimpse of this recently with the restoration of the Senior Gold and PAAD programs. It appears as though there might be additional monies beyond even that. It might allow the Christie Administration more flexibility with health care dollars and an ability to claim ownership of the economy and the budget just as these dollars are kicking in, and the overall economic picture improves.

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