NJ Constitutional Amendment To Undermine Murphy Some More

If you think Putin pulls Trump’s strings, we have something similar playing out in New Jersey where a politically seasoned Senate President is in the process of neutering a tyro governor.

It just appeared on the New Jersey legislature’s website as the only piece of business for the day:

Senate Budget and Appropriations
    Monday, July 23, 2018 – 1:00 PM
    Hearing – Committee Room 4, 1st Floor, State House Annex, Trenton, NJ
The public hearing will be held in accordance with Article IX, paragraph 1 of the New Jersey Constitution and Rule 24:3 of the New Jersey Senate on Senate Concurrent Resolution 132.  

Bill Abstract   Current Status LDOA  

SCR132 Rev. Cert. Bd.-create 2RS 6/30/2018

.
This will be passed out of committee and approved at the next legislative session (Thursday, July 26):

SCR132 Amends State Constitution to create joint legislative and executive branch New Jersey Revenue Certification Board to provide consensus certification of revenues for State budget purposes.

Three months and a few days later it will be on the general election ballot.

Article VIII, Section II, paragraph 2 of the New Jersey Constitution currently reads:

No money shall be drawn from the State treasury but for appropriations made by law. All moneys for the support of the State government and for all other State purposes as far as can be ascertained or reasonably foreseen, shall be provided for in one general appropriation law covering one and the same fiscal year; except that when a change in the fiscal year is made, necessary provision may be made to effect the transition. No general appropriation law or other law appropriating money for any State purpose shall be enacted if the appropriation contained therein, together with all prior appropriations made for the same fiscal period, shall exceed the total amount of revenue on hand and anticipated which will be available to meet such appropriations during such fiscal period, as certified by the Governor.

What Sweeney is doing is taking out that last word and replacing it with:

New Jersey Revenue Certification Board.
b. There is established the New Jersey Revenue Certification Board, which shall consist of three members as follows: the State Treasurer, ex officio, or its successor in the executive branch of State government, the Legislative Budget and Finance Officer, ex officio, or its successor in the legislative branch of State government, and a third public member who shall be jointly selected thereby. The public member shall serve for a term of four years and shall hold minimum qualifications established by law. A vacancy in the public member position of the group shall be filled by the joint selection of the other members. The New Jersey Revenue Certification Board shall provide a consensus certification of State revenues on hand and anticipated to be received by the State during the present and next commencing State fiscal years to support annual State appropriations. The New Jersey Revenue Certification Board shall convene one or more public hearings at the place or places it designates during the second quarter of each State fiscal year. The board shall receive public testimony and may invite other participants who, in the judgment of the board, may provide guidance on the current conditions in, and probable outlook for, the performance of the economy of the State, as well as the effect of such conditions and such performance on State revenues.

12 responses to this post.

  1. Posted by Tough Love on July 17, 2018 at 4:18 pm

    Good idea …………. make “wishing” (that more revenue will magically appear) more difficult.

    Reply

  2. Posted by boscoe on July 17, 2018 at 8:16 pm

    Mr. Bury is correct that this is a Sweeney thumb in Murphy’s eye. But I can tell you that — politics aside — this is not a new idea. For some time there has been legislation introduced to create some kind of consensus revenue estimating procedure or commission. It almost always includes a legislative official and the state treasurer or his/her representative. And it usually includes at least one and often several outside “experts” who have economic backgrounds and are familiar with the state budget process.

    What is new is that this is proposed as a constitutional amendment (as opposed to a simple law) that would need to be approved by the voters. That means this Revenue Certification Board would be embodied in the State Constitution, which would make it difficult to change in the future. Tactically, It also means (Sweeney thumb print) that this bypasses the Governor’s office in the enactment process. Concurrent (Senate and Assembly) Resolutions to amend the constitution do not need to be approved or signed by the Governor; they go straight to the November ballot.

    Most voters would be clueless as to the merits of such an arcane proposal, and the ballot statement itself is neutral in its presentation. So (1) turnout would be minimal especially in a non-election year; and (2) money would have to be spent to make anything about this compelling to the electorate. It’s not an overtly emotional issue.

    Much as I would like to see a check and balance on the Governor’s sole power to certify revenues, I have doubts about the wisdom of creating this board. For one thing, the Executive Branch has far greater resources, and in many cases knowledge, to estimate revenues than does the Office of Legislative Services or any outside person. The Governor is the one who proposes changes to the tax code and part of developing those proposals is guesstimating the fiscal impact of the changes, and doing so in secret; i.e., without legislative involvement. Second, most people tend to think of the revenue certification as referring to about ten or so major tax sources. In fact, there are dozens of revenue items supporting the budget, many of which are extremely specialized and have nothing to do with taxes. And as far as so-called public members are concerned, that person might know macro-economic trends but would know next to nothing about the many arcane factors that go into projecting any individual tax. Yet that person would be the tie-breaking vote if there were a disagreement between the Treasurer and the Legislative Budget and Finance Officer. That puts a potentially important decision in the hands of the board member with the least knowledge of the issue.

    I believe this proposed amendment would have to be approved by both Houses by late August to make it onto this year’s November ballot.

    Reply

    • That point about the governor’s people having all this information was also brought up by Murphy in the Politico story:

      Murphy said Sweeney’s proposal doesn’t make much sense. While OLS has a strong team, it does not have access to the same tax data that the Treasury Department is able to view, and therefore is at an inherent disadvantage when trying to predict revenues, he said.

      “It’s a little bit like having the pitcher, the catcher, the batter and the umpire go off to the side after each pitch to determine whether it was a ball or a strike,” Murphy said. “The way it works now seems to be working just fine across both sides of the aisle.”

      In these days of OPRA what data is it that the OLS (or the public for that matter) would not have access to? If someone sent an OPRA to the governor’s office for the data they base their projections on, what would be excluded? Are they looking at individual tax returns? And if they are why wouldn’t they have to release those with appropriate redactions?

      Reply

      • Posted by bosccoe on July 18, 2018 at 9:51 am

        By virtue of informal agreements and cooperation, the existing setup works moderately well and there is currently a fairly good exchange of data and analysis. Significant disagreements between the Treasury and the OLS regarding revenue projections are relatively rare and usually occur in periods of economic uncertainty, such as the beginnings of economic downturns or recoveries, or when there is a change in federal or state tax law. OPRA requests are awkward and time-consuming, and to have one branch of government make an OPRA request of another would be politically tinged, untimely and provocative because OLS works for the entire Legislature, both houses and both parties. I’m assuming that if this proposed Revenue Certification Board were written into the Constitution, that current reporting and estimating procedures would be altered to make OPRA requests unnecessary. But, as I noted above, it might create other problems. Just my take on it.

        Reply

    • Posted by Wjcw on July 18, 2018 at 6:35 am

      Next to nobody on the BPU has any experience in power generation. (Maybe there’s one engineer?) They take testimony and evaluate facts and make a decision.
      This board would be the same. Let the governor’s people testify to support their numbers and the board can make an informed decision.

      Reply

  3. Posted by readslikeamafiabook on July 17, 2018 at 10:05 pm

    Really going to bring up Putin? Now I lost all respect for you John. It’s an asinine intro. After all, it was the democrats that LOVED Putin not too long ago. Oh FFS.

    Reply

  4. Posted by skip3house on July 18, 2018 at 9:09 am

    NJ Constitution was working well until extreme partisanship, special interests craving Power, unwise/not needed tax cuts, unfunded politically motivated Pension fixed benefits increased,….all became the norm, maybe 25 years ago?

    Posted by boscoe on July 17, 2018 at 8:16 pm comment here tells the sad practicality of voters’ understandings on this.

    Maybe, the often suggested ‘Initiative and Referendum’ clause left out of our NJ Constitution could overcome the partisan and voter understanding issues by needing all parties’ efforts to gather signatures, and even create a NJ voter data base from banks, etc. for on-line signature authorization? Result could be more NJ people involved in their
    own governing….like that old Saturday Evening Post cover of a town meeting…..

    We see what happens when regular people can’t understand/ rely on ‘experts’/ lose interest/ from the sad shape many pension funds are in,

    Reply

    • Posted by Tough Love on July 18, 2018 at 9:38 am

      THE “ROOT CAUSE” reason WHY NJ’s Public Sector pensions are in “bad shape” is because they are LUDICROUSLY EXCESSIVE ………….. routinely 3 to 4 TIMES greater in value upon retirement than the DB pensions granted Private Sector workers (for the lucky few who are still accruing benefits in such Plans) who retire at the SAME age, with the SAME wages, and with the SAME years of service.

      Blaming NJ’s pension mess on the “lack of full funding” is a cop-out BECAUSE the calculate annual amount necessary for full funding is A FUNCTION OF (and directly related to) to excessive level of benefits promised.

      The “lack of full finding” is not the CAUSE of the problem, but a CONSEQUENCE of the real underlying ROOT CAUSE ……. grossly excessive pension “generosity”.

      Reply

      • Posted by skip3house on July 18, 2018 at 9:57 am

        I agree, but why make this look like your…the “lack of full funding” is a cop-out….belongs to my post?
        Actually, reading your …”bad shape” ..remark again, you only dwell on NJ’s Public….while mine states .. the sad shape many pension funds….
        Why?

        Reply

        • Posted by Tough Love on July 18, 2018 at 1:17 pm

          Corporate-sponsored single-employer Plans are actually in very GOOD shape….. with an average 86% funding ratio calculated using MUCH more conservative assumptions and methodology than Public Sector Plans.

          SOME (including some LARGE) Private Sector Multi-employer Plans are in BAD shape because their STRUCTURE (from the get-go) never properly functioned as a DB Plan with contribution levels being adjusted based on emerging experience.

          Public Sector Plans are a basket case BECAUSE the Unions, the Workers, and our Elected Officials …….. ALL for self-interested reasons …….. CHOOSE to contribute as little as possible, INTENTIONALLY and very materially underfunding these Plans

          Reply

      • Posted by Stephen Douglas on July 18, 2018 at 2:37 pm

        Coming soon to New Jersey… “Promised Pension Benefits”

        “Marin County promised pension benefits up nearly 1000%, dwarfing rate of economic growth”

        https://blog.transparentcalifornia.com/2018/07/17/marin-county-promised-pension-benefits-up-nearly-1000-dwarfing-rate-of-economic-growth/
        ———————————————-
        Ignoratio Elenchi

        It’s only a matter of time before someone more proficient with math than with logic calculates New Jersey’s “promised pension benefits” and arrives at a true but irrelevant comparison. (Or, half true, but irrelevant.)

        Folks, if you want to compare pensions with “rate of economic growth” i.e. personal income, median household income, inflation, population growth, please use the proper comparison; either the total annual pensions paid out in 2016 vs 1987, or the average pension paid out in 2016, or the normal cost of today’s pension vs 1987, if you can agree on what that is.

        You will find an increase in pensions: Janetheactuary…

        “This is, to me, the most startling graph in this (Pew) report: benefits paid out by public pension plans came in at roughly $100 billion in 2000.  In 2016, they had tripled, to about the $300 billion mark.”

        That’s total pensions. In that 16 years, the average pension seems to have doubled, not adjusted for inflation.

        If you want to compare growth in pensions to the growth in “personal income”, Mr. Klingner or Mr. Fellner, compare it to the growth in the normal cost of pensions from 1987 to 2016. Do not compare it to accrued liability.

        Normal costs are what the taxpayers are paying this year (or what they should be paying).

        “Promised pension benefits” are, as per Mr. Klingner, “the present value of the total amount state workers are owed in pension benefits over the next 30 years.

        Not a valid comparison.

        Reply

  5. How about “if revenues fall short of expectations by more than 3 percent, leading to a deficit that burdens younger and future New Jerseyans, the Governor and all members of the state legislature will be prohibited from running for re-election.”

    That would make those estimates conservative. But I doubt that’s the goal of Generation Greed.

    Reply

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