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JerseySmarts.com

“Put it in the hands of the people who pay the bills”

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The quote that is the title for this entry comes directly from our Governor – Chris Christie. What is he talking about, exactly? Well, if you’re up on New Jersey politics, then you know that the Governor introduced a 33 bill package to the Legislature earlier this week with specific provisions to help fix the problems in our state’s system that allow for outrageous property taxes. Specifically, this is what the Governor had to say:

People will know that their property taxes will increase no more than 2.5% a year unless they say otherwise.

For 30 years, ever since the supreme court decision in Robinson v. Cahill, people of the state of New Jersey have been subject to politicians trying to run the property tax system in New Jersey. I think we can now uniformly declare that a failure.

70% increase in property taxes of the last decade and an increase in property taxes that are driving people from their homes, whether they’re young couples trying to make ends meet, whether they’re seniors trying to remain in the homes that they raised their families in, or whether they’re middle class tax payers in New Jersey who are trying to save money to send their kids to school, to have a nice vacation, to be able to live a standard of living that they’re hard work should in fact get for them. Property taxes steals from those folks each and every day, and we need to put in their hands, these decisions.

I’m so glad that the Governor is tackling this issue in a way that actually fixes the problem. As a young New Jersey resident, I frequently look at possible homes to purchase so I can get out of the rentals that I’ve been living in and have some control over my living situation. On more than one occasion I’ve found homes that are perfect for me and that I could afford on a single guy’s salary. But the reason why I never buy a home is property taxes.

Over the years I’ve done the math and figured out that I could purchase specific properties that would result in a $1,400 or even $1,600 per month mortgage payment. That’s fine. I can afford that and still have money left over to pay my exorbitant student loans and live a good life. However, when you add an additional $400 – $500 (or more) each month in property taxes, it’s a deal breaker on impact.

So as a guy who wouldn’t mind buying a house in New Jersey (even though right across the border in Pennsylvania looks real good right now), I fully support Chris Christie’s attempts to fix our broken system. Enough is enough already.

New Jersey Division of Taxation – Customer Service at its Worst

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Normally, I wouldn’t single out a government agency or private enterprise as having horrible customer service unless I was beaten down by them time and time again. In fact, I would normally reserve my angry rants until I actually had a voice-to-voice interaction with the agency – either through physically going to their location or speaking on the telephone. Typically, I wouldn’t suggest that an agency has horrible customer service based on their e-mail communication alone… Until I received an e-mail from the New Jersey Division of Taxation.

Wow.

Let me try to set the stage as quickly and clearly as possible. I use H&R Block’s “At Home” software to prepare and file my taxes each year. This year, because of an answer that I gave regarding my 2009 investments, I had to actually print my tax return and supporting documents and send them to the Division of Taxation. Believe it or not, this is the first time in many years that I’ve submitted a paper copy of my state tax return instead of e-filing, but I don’t want to go off on a techno-tangent right now.

The H&R Block program suggested a few weeks ago that there were no forthcoming software updates for the New Jersey tax program. Since I was filing by paper this year, when I saw that there were no pending changes to the program I printed out my tax return and sent it in with delivery confirmation. About a week went by and I received the stamped “received” receipt and all was well with the world.

Until I turned on the H&R Block program against last night. All of a sudden there was an update for the New Jersey tax program. I downloaded and installed the update and (surprise, surprise), my expected return nearly doubled! DOUBLED! Granted, we’re talking about going from $140 something to $280 something, but still – that’s a good little piece of money these days.

Being faced with the reality that my already-filed taxes were sitting in Trenton somewhere reporting that the state owed me less than they actually owed me, I decided to report the situation to the Division of Taxation. Figuring that in 2010 e-mail was the quickest and easiest way to get a response, I e-mailed my situation to the Division. This is what I received in return:

The New Jersey Division of Taxation received your e-mail. Due to the high volume of e-mail, please allow AT LEAST 15 business days and possibly longer for a reply. We appreciate your patience and will make every effort to respond to your e-mail as soon as possible. However, if the information listed below answers your question, you will NOT receive any further response from the Division.

So let me lay this out for everyone… My e-mail was received (good news), but the Division of Taxation is so busy that they may not be able to answer me until Thursday, April 29th (bad news)? Name me one private company on the planet that can get away with not responding to a customer inquiry for FIFTEEN business days. But wait! Read on, my friends, because the fun doesn’t end there…

Not only do I have to wait until Thursday, April 28th until I receive a response, but there is a possible chance that I’ll have to wait even longer. EVEN LONGER?! Really?!

Look, I work around the corner from the Division of Taxation building in Trenton. In fact, I walk by it every once in a while (as well as the dozen and a half people who seem to be smoking outside consistently). The building is gigantic – absolutely huge. You mean to tell me that in that gigantic, huge building there isn’t one person who can get back to me on what I should do in order to get the proper refund? Really?

That is customer service at its worst and that is why the current tax code should be replaced with the fair tax. I’ll just chalk this up to another example of how the “little people” don’t seem to really matter to the government machine.

Time to Take a Look at the “At Risk” Designation for Some NJ Students

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Every once in a while I head over to the PolitickerNJ.com website and read what some of New Jersey’s muckety-mucks have to say about what’s going on in our state. This morning, I was glad to see that one New Jersey State Senator is openly questioning the “at risk” designation that applies to some New Jersey students versus others. Here’s the article, in full:

TRENTON – It’s a favorite issue of state Sen. Mike Doherty (R-Washington Twp.), a rural legislator who grew up in Essex County and long heard what he interpreted as the sucking sound of money from the suburbs into Newark.

Conceding that Newark’s porverty rate stands at 24%, Doherty believes urban schools unfairly receive a disproportionately high share of state aid based on the designation of “at-risk” children.

In his turn at the microphone here during this Budget and appropriations hearing, he drums the issue into the consciousness of Treasurer Andrew Sidamon-Eristoff.

The average New Jersey pupil receives $9,600, while an at-risk student gets an additional $8,000 or $9,000.

Doherty wants more oversight concerning that designation, particularly in a city where there is an international airport, sports arena and numerous other facilities lacking in rural Warren and Hunterdon counties, which comprise Doherty’s home district.

“If administrators are not checking, perhaps there may be an incentive to get that number (of at-risk children) up because it bumps up the amount of state aid you’re getting,” Doherty says.

I see this stuff almost everyday at my day job – a school comes to us for financing and they are either able to afford it because they receive an abundance of “at risk” aid or they are unable to afford a facility upgrade because they don’t receive any “at risk” aid. It’s very cut and dry – either you get the money or you don’t.

The state is engaged in a deep conversation about the current school funding formula, how education funding should be changed, and what the final outcome will be for school districts and educators. A crucial part of this conversation – indeed the very base of the conversation – must be a discussion about property taxes in New Jersey. Why must this be the base of the conversation? Because in New Jersey, education is funded through property taxes. And anyone who even takes a cursory look at the school funding formula will find that the current property tax system in New Jersey is essentially a wealth redistribution system.

In essence, money is sucked from the suburbs and sent to the urban districts. As Senator Doherty says above, every single one of these “at risk” students located in urban districts receives an additional $8,000 to $9,000 in state education aid. Where does that money come from? Well, New Jersey doesn’t have the highest property taxes in the nation by mistake!

The root of the problem with the “at risk” aid is that it ties educational performance to cost per pupil…and it’s wrong. One only needs to look at the Asbury Park School District – where hundreds of thousands and even millions of additional aid dollars have been dumped over the years – to see that more money does not equal higher student engagement or performance.

Education – the actual act of learning something new and retaining that knowledge – doesn’t happen because of more money being dumped into a school district. Real learning takes place because a great educator can relate to and “reach” a student. It’s plain and simple. If the wrong people are in education in the first place, then you wind up with students who are not engaged, not learning, and who do not want to be in school.

Education reform has to take place from both the bottom up (getting the right people in schools) and from the top down (fixing the funding formula).

Full Review of Last Night’s Lt. Governor Debate

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Last night, I posted some quick thoughts on the first ever Lieutenant Governor Debate held at Monmouth University in West Long Branch. Today, I hope to take some of the better parts of the five pages of notes that I wrote last night and put them into a coherent entry for your reading pleasure. Let’s see if we can accomplish that feat…

Before I begin, though, I want to mention that I took these notes in an effort to compare the communication styles of the three candidates. In other words, I was looking to see if they connected with the audience, what their demeanor was like during the forum, and how they were adjusting to the changing environment as the questions rolled along.

Loretta Weinberg (Democrat)
Loretta Weinberg came off as very tired in the beginning of the debate. The impression that I got from her was that she would rather be doing anything else in the world than sitting up on that stage answering questions. Her tone wasn’t really that of a privileged person who felt that the debate was beneath her, rather it was the tone of someone who was tired and exhausted.

To Senator Weinberg’s credit, she initially appeared very knowledgeable on the various issues in this campaign. Unfortunately, though, she was the first to throw out a negative attack on the opposition (against the Republicans). In the beginning, Senator Weinberg connected very poorly with the audience that was in the theater. This changed at different points throughout the night, but the worst example of this was when she attempted to use the tried and true strawman argument of the Democrats – blaming President George W. Bush. To the audience’s credit, they booed Senator Weinberg ferociously when she attempted to make the lame connection between New Jersey’s problems and President Bush. Once or twice later in the debate, Senator Weinberg did what all Democratic politicians seeking election this year are doing – she tied her campaign to President Barack Obama. If my memory serves, she commented on how the Governor has worked with the President to bring stimulus dollars to New Jersey.

Early in the debate, Senator Weinberg was hammered by the moderator from NJ 101.5 for constantly going off topic. I also noticed that when she answered questions, Senator Weinberg had a knack for bringing up outside issues that framed her opposition in a negative light. This is what drove the moderator nuts, I think, and is what he kept getting on her case about early in the night.

Senator Weinberg showed a clear knowledge of Governor Jon Corzine’s legislative history. In fact, I think you could say that she has mastered Governor Corzine’s record and his time in politics. Many of her arguments were strong based solely on her ability to recall the Governor’s successes while in office. At times it appeared that the Senator was relying too heavily on the Governor’s record and she seemed to be blurting out talking points. However, that changed as the night went on.

For her part, Senator Weinberg did not engage in usual debate practices. She did not take notes during her opposition’s responses nor did she take notes while questions were being asked. Both of her opponents were jotting down notes furiously throughout the forum. The best comment that I heard from Senator Weinberg was her rebuttal on corruption in New Jersey when she specifically cited the Governor’s legislation banning pay-to-play. Very powerful stuff.

The worst thing that I saw Senator Weinberg do in the debate was her question to her Republican challenger about what items – specifically – she would cut in the upcoming budget. By doing this, she allowed her opposition to directly answer a question that she had, herself, sidestepped. Not a good move in terms of debate.

Overall, I’d rate Senator Weinberg a 7 to 7.5 on a 10 point scale.

Kim Guadagno (Republican)
Monmouth County Sheriff Kim Guadagno was the strongest of the three debaters. She had a very direct, confident speaking style that connected with the audience in attendance and those listening at home. While Senator Weinberg was the first to attack her opposition, Sheriff Guadagno was the first to attack a specific person (the Senator). However, Sheriff Guadagno only attacked the Senator after the Senator continued to repeat an untrue statement regarding the Republican campaign’s stance on mammograms. The audience responded very well to this early exchange (and eventually booed the Senator when she continued to bring up the issue throughout the night).

Sheriff Guadagno used a very extemporaneous style of speaking which connected well with the audience. She didn’t stick to a prepared statement on any of the topics that were discussed and the people in the theater responded well to this style. The tone of the Sheriff’s voice was passionate and inflamed at the same time.

When the topic of campaign finance laws came up, Sheriff Guadagno spoke directly to the audience – a very effective move. She followed this up a few minutes later by clarifying a question regarding illegal immigration and some piece of legislation called 287g. Sheriff Guadagno was very clear on her stance towards documented and undocumented workers, which earned her the praise of the audience.

A few moments after this show of strength, though, I believe that Sheriff Guadagno faltered a bit when she tied the Governor to a question about whether or not she would support raising the gas tax. Not a good connection for the Sheriff and something that I think most of the listeners and the audience gave no real credence.

Sheriff Guadagno appeared to be the strongest about midway through the debate when she answered a question on corruption. Her and Chris Christie’s record on busting corruption are impeccable and really something that can’t be contested logically. Sheriff Guadagno was also strong, though to a lesser degree, on her answer to shared services and the very real example that she gave with the 911 system in Monmouth County. Audiences like to hear about real examples and that was a good one.

My favorite discussion throughout the entire night regarding the charter school support from all of the candidates. Sheriff Guadagno was very smart to incorporate the financial pressure that suburban districts are feeling by having a great deal of their tax dollars flow to urban districts with no results from the traditional public schools. Charter schools, on the other hand, are generating real success by breaking the stranglehold that the unionized teachers have on the New Jersey taxpayers and their precious property tax dollars.

Overall, I thought that Sheriff Guadagno won the debate and would rate her performance an 8.5 or 9 out of 10.

Frank Esposito (Independent)
Dr. Frank Esposito spoke in general terms throughout the debate. This was a tactic that eventually began to work against him as the discussion progressed. Dr. Esposito seemed knowledgeable on a few issues, but not well-versed in all of the major issues in the campaign. Yet, I can’t help but to feel that the Independent ticket will receive some type of bump from Dr. Esposito’s performance. New Jerseyans are looking for something different and voting for someone without an R or a D after their name might be the answer this election cycle.

For much of the beginning of the debate, Dr. Esposito relied on humor and one-liners to connect with the audience, which was effective. However, that approach quickly lost its impact once the topics began to dive into specific policies towards the middle of the debate. The one area where Dr. Esposito was the strongest was the discussion on campaign finance reform. Clearly, an Independent candidate running for Lieutenant Governor in a state where big dollars rule the day has a lot to say about campaign finance reform. Again, Dr. Esposito was very strong in this portion of the forum.

The weakest part of Dr. Esposito’s performance was his outright support for in-state tuition for illegal immigrants. I admit that I have a personal grudge on this issue as student loan debt and college affordability are my hot button issues (which no one else cares about, but they mean something to me). I thought that Dr. Esposito’s brief discussion and stance on this issue really detracted from his performance on the night.

On the other hand, Dr. Esposito was very strong and hit a common chord with the audience when he suggested that politicians busted in corruption rings should automatically forfeit their pensions. The audience loved that – but they loved hearing his comment that while the current administration passed a ban on dual office holding, they exempted themselves from the legislation at the same time. That was clearly Dr. Esposito’s home run of the night and he hit it out of the park.

Overall, I’d score Dr. Esposito with a strong 5.5 out of 10 and, on some answers, I’d give him a solid 7 out of 10.

As you can see from my meager scoring table, I thought that Sheriff Guadagno clearly won the day with both Dr. Esposito and Senator Weinberg coming in at a tie for second or at least with Dr. Esposito coming in at a very close third.

Book Review: The Fair Tax Book

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Keeping with yesterday’s theme of watching President Barack Obama as he considers raising taxes on the middle class, I thought today would be the perfect time to talk about a book that I recently completed: The Fair Tax Book – Saying Goodbye to the Income Tax and the IRS. This book, by Neal Boortz and Congressman John Linder, contemplates an entirely new tax code for the United States of America. Boortz and Linder consider a whole new system – one based off of a consumption tax.

What is a consumption tax? It means that everything a person purchases is taxed at between 22% and 23%. But wait! That’s the only tax that anyone ever has to pay – ever. No income taxes, no business taxes, no capital gains taxes – nothing. You name a tax other than a consumption tax and it doesn’t exist. Another thing to keep in mind is that the tax is only assessed once. For example, if you buy a brand new car, you pay the tax. However, if you buy a used car – no tax. The Fair Tax is only assessed once.

The other critical point to remember under the Fair Tax is that each household in America would be reimbursed on a monthly basis for a dollar amount equal to what they would spend on basic goods. This immediately removes the argument that poorer citizens would be facing an undue burden under the Fair Tax. They wouldn’t be facing that burden because the government would provide each American household with a subsidy equal to what they would typically spend each month on consumption taxes for basic necessities.

There is obviously too much to go into in this small space. However, if you are interested in government reform or new ways for America to meet its obligations to its citizens, then I would recommend reading this book. I was completely against a Fair Tax when I first picked up this book, but after reading it I am convinced that it could be a great step forward for America in the new world economy.