Masters of the Party Game

He will spend half his life and most of his means in getting into Parliament and when at last he arrives there he will have no time to think of anything but how to get into your Majesty’s Cabinet.  When he intrigues his way to the top of that, he will be a master of the party game and of nothing else.

Everybody’s Political What’s What by Bernard Shaw

And so it is with the Democratic leadership in the New Jersey legislature which today are going to come out with their budget plan for FY2016 which is supposed to include payment of $3.1 billion (5/7th of the ARC) into the retirement system instead of the $1.3 billion that Governor Christie arbitrarily decided to make along with this reported spin:

“We are committed to stabilizing the pension and funding the pension, and more importantly to working toward a long-term fix so it’s financially stable,” Assembly Majority Leader Lou Greenwald (D-Camden) said last week.

To do that, “everything is on the table,” state Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen) added. Lawmakers said the details of the budget are still coming together, and that they’ve toyed with several options to make the full pension payment.

The largest state labor union, the Communications Workers of America, formulated and vowed to steer lawmakers toward its own funding plan, which includes increased taxes on income over $350,000, the business tax surcharge, freezing Christie’s small business tax cuts and closing corporate tax loopholes by enacting combined reporting.

Sweeney has already sponsored a bill that has support from Assembly Leader Vincent Prieto (D-Hudson) to hike taxes on people earning more than $1 million.

Sweeney’s millionaires’ tax bill would raise the tax rate on income over $1 million from 8.97 percent to 10.75 percent for four years, raising an estimated $675 million for the next budget. That bill would also increase the earned income tax credit for low-income workers from 20 percent of the federal credit to 25 percent.

But other aspects of CWA’s proposal, Assembly Budget Chairman Gary Schaer (D-Passaic) said last week, “are being looked upon very favorably by the leadership of the Assembly and Senate.”

The corporation business tax surcharge Democrats sent Christie last year would have raised another $390 million. That budget also suspended for a year the Business Employment Incentive Program, freeing up $175 million.

Business groups and Republican lawmakers have planned a news conference for Monday to criticize efforts to raise income taxes.

State Sen. Raymond Lesniak (D-Union) said Saturday he will introduce a bill that matches the final piece of CWA’s plan: to close corporate tax loopholes that allow some multi-state businesses to shuffle profits across state lines to avoid paying New Jersey taxes. However, it is not clear whether that will ultimately be a part of the Democrats’ budget strategy.

“It certainly should be,” Lesniak said. “Every $250 million helps.”

What is missing from these proposals and analyses:

  1. The real annual cost for the benefits the state is responsible for (both accruing and to amortize unfunded liabilities over 7 years) would be about $10 billion;
  2. Raising taxes in one year often means lower (or no) taxes on the entity taxed in future years (possibly in perpetuity) as those being taxed adjust accordingly;
  3. Any knowledge or appreciation of the real depth of the problem.

For them it’s all a party game.

 

 

26 responses to this post.

    • Posted by skip3house on June 22, 2015 at 12:48 pm

      Good. Add… Ayn Rand killed the American dream: Our free-market economy only works for the 1 percent
      June 21, 2015 09:00 AM | MATTHIEU RICARD
      View full article at Salon.com

      Reply

  1. Posted by skip3house on June 22, 2015 at 12:45 pm

    Saw NJTV. Did not clarify just how long present pension fund will last if actual money from workers is not distributed to retirees. Think they said about 2025, but with or w/o these worker monies?

    Reply

  2. Posted by Tough Love on June 22, 2015 at 1:11 pm

    John.

    Your numbered items at the end are right on the mark.

    Increased taxation is a loosing game without addressing the STRUCTURAL problem ….. the UNDENIABLE FACT that the extraordinarily generous Public Sector pension “formulas” AND “provisions” (such as very young full/unreduced retirement ages and COLA-increases …. should they be reinstated) in place today are simply unaffordable …… and MUST be VERY materially reduced for the FUTURE Service of all CURRENT workers.

    Taxpayers should fight with great vigor any and every tax increase proposal until such pension (AND benefit) reduction are implemented FIRST.

    Reply

    • Posted by Anonymous on June 22, 2015 at 1:37 pm

      Simultaneously fix P&B and tax increase, no more c.78 BS.

      Reply

      • Posted by Tough Love on June 22, 2015 at 2:02 pm

        If the taxpayer paid-for share of Future Service Public Sector pensions AND benefits were reduced ALL THE WAY to what the average NJ Private Sector gets in such benefits from their employers, I would support a tax increase to help amortize the current unfunded liability ….. but ONLY if the form of the pension changes was a permanent freeze* (ZERO FUTURE growth …. EVER) to the current DB Plans …..

        * If even a breadth of life remains, a future NJ administration will find a way to screw the Taxpayers and resurrect this financial monstrosity.

        Reply

        • Posted by Anonymous on June 22, 2015 at 2:12 pm

          Isn’t that what you already stated in your previous post? Not sure what value this comment added to the conversation? Got you point and all I’m saying is (repeating myself) the two need to occur in tandem.

          Reply

          • Posted by Tough Love on June 22, 2015 at 2:17 pm

            Fine with me ….. but any further accruals under the DB pension must “end”

          • Posted by Anonymous on June 22, 2015 at 3:08 pm

            bwahahahahhahahahahahahha “isnt that what you already said” Hey TL, what about the ten billion times you repeat your boring self. over and over, it is utterly ridiculous

          • Posted by Tough Love on June 22, 2015 at 3:43 pm

            I’m pretty sure there is an inverse correlation between IQ and those who say ………. bwahahahahhahahahahahahha

        • Posted by Anonymous on June 22, 2015 at 5:20 pm

          I proclaim that anyone who used the word quoting is a bloody parrot with the IQ of an embecile. I think I just complimented TL

          Reply

    • Posted by Lu on June 22, 2015 at 5:48 pm

      “loosing game”? People who live in glass houses….

      Reply

    • Need to ensure that sponsor(s) of any potential tax increase are put on notice that a recall effort for them will be forthcoming.

      Reply

  3. Posted by Anonymous on June 22, 2015 at 1:21 pm

    Taxes are going up and up, whether the pension system fails or not taxes will go up. Christie kept them level but now they will go UP! sorry but its the way of the government. You already fought with vigor when you elected Christie and that didnt get you anywhere.

    Reply

    • Posted by skip3house on June 22, 2015 at 3:23 pm

      NJPolicyPerspective @NJPolicy

      Opponents also claim increasing income taxes on wealthy will lead them to leave NJ en masse. Facts tell a diff story pic.twitter.com/5zgU56FL7m

      Reply

      • Posted by Anonymous on June 22, 2015 at 3:55 pm

        yeah then aint leaving cause Jersey is either where they live while the make their money in New York City or else they make their money in jersey, they aint going to montana anytime soon

        Reply

  4. YAWN…….pension fund broke, tax rich people and businesses, no reforms, pension fund still broke, still no reforms, tax rich people and businesses………didn’t Einstien state that the truest form of insanity is doing the same thing over and over and getting the same result……..

    Reply

  5. Posted by Anonymous on June 22, 2015 at 10:21 pm

    One thing for sure, the whole political process on both sides of the aisle would make for a big hit, either in print or on the big screen.

    Reply

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