The Debt and Spend Republicans

There was a time, way back, when Republicans balanced the books.  Yeah, you could trust those Democrats to maybe go off on some flight of fancy, some childish attempt to throw money at a problem, but Republicans were the party of the adults, straight-laced and bottom-lined.  Those years when the Democrats were in charge and went off the rails -- spent too much, ran up debt -- those would be followed by lean years with the Republicans cutting spending and paying down debt.

That's not how it works anymore.  Like modern families, both political parties have learned that the shortest route to becoming "most favored parent" is to buy it for the kids and put the debt on the credit card.  Under no circumstances must the voters be taught lessons in budgeting and that spending money you don't have has consequences.

The debate over the funding of the Transportation Trust Fund has produced a curious dichotomy within the GOP.  On the one hand, you have a small group of starched-assed Republicans who simply refuse to continue the Santa Claus myth that a revenue source can remain constant for nearly three decades and magically fund all our transportation needs. 

They know that the last time the revenue collected from the gas tax covered the cost of the transportation program it was designed to fund was in 1990 -- 25 years ago.  Year after year we've fallen further and further behind in debt, to the point where last year the tax on gasoline and diesel brought in just $750 million.  That same year the cost to pay the debt was $1.1 billion.  It had to be paid before a single pothole was filled.  And paid it was -- with more debt. 

For 25 years we've been using roads and bridges that we couldn't afford to pay for and nobody seemed to notice, nobody seemed to care.  And anytime anyone dared to suggest paying off some of that debt you could hear the howls and cries of the children's chorus.  Why is it that we only hear calls for savings when there's talk of paying more?  Why doesn't anyone ever notice the debt until the credit card statement is due? 

For 25 years we have watched our incomes rise in an attempt to keep up with inflation, while those on Social Security received cost-of-living adjustments to combat inflation --  increases of 5.4% in 1990, 3.7% in 1991, 3% in 1992, 2.6% in 1993, 2.8% in 1994, 2.6% in 1995, 2.9% in 1996, 2.1% in 1997, 1.3% in 1998, 2.5% in 1999, 3.5% in 2000, 2.6% in 2001, 1.4% in 2002, 2.1% in 2003, 2.7% in 2004, 4.1% in 2005, 3.3% in 2006, 2.3% in 2007, 5.8% in 2008, zero in 2009, zero in 2010, 3.6% in 2011, 1.7% in 2012, 1.5% in 2013, 1.7% in 2014, and zero in 2015 -- but the price we paid to maintain our roads and bridges remained the same?  Didn't we ever wonder how?      

New Jersey is a fiscal mess because it has the nation's highest property taxes and runaway debt.  According to the Tax Foundation, New Jersey has the worst business climate in America -- 50 out of 50 states -- because, and let's quote them here:  "New Jersey is hampered by some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country."

So the adults in the Republican Party, fashioned a plan to attack a big part of this sorry state of affairs.  Being in the minority, in both chambers of the Legislature, they had to work out a compromise with the Democrats.  But they had an ally in Governor Chris Christie, who wouldn't let anything less than comprehensive get past his veto pen.  Painstakingly, they worked out a very detailed plan that gets rid of the estate tax before the Governor leaves office, eliminates the tax on retirement income for most seniors, cuts the sales tax to boost commerce, provides a tax credit for working people with low-paying jobs, and provides a personal tax exemption for veterans.  The plan also addresses debt by raising the tax on gasoline and diesel to make up for all those 28 years it hasn't been adjusted for inflation. 

Even with the increase, all of the existing tax and the first 10 cents of the increase is needed just to start paying down the irresponsible debt New Jersey ran up while nobody wanted to pay attention.  Without a 23 cent increase, we cannot maintain and repair our roads and bridges, fund our transportation system, and start to pay down the debt.

You know that meetings have been held with Republicans around the state, asking for ideas on what to cut and how to cut to make transportation construction more efficient and less costly to taxpayers.  And we have to tell you, that the same people who demand savings have been less than forthcoming with specifics.  Everyone has a hashtag but nobody has specifics.  And how did it come to pass that Republicans are so scared shitless of numbers?  Lots of hooting and waving of hands until you ask somebody to put it down on paper, run the numbers.  They look at you as if you asked them to go to the moon.  If we are going to have savings, we are going to have to do better.

Can  you hear the howls?  They're coming from the debt and spend Republicans.  See the hashtags?  They read #NOGASTAX.  Now there is a responsible plan... isn't it?  With such a plan we can solve all New Jersey's debt issues.  Three short words squished together gets it done.  Brilliant!

Remember when Republicans busied themselves with spreadsheets instead of hashtags?  Remember those Republicans in the boring white shirt sleeves and ties, who had survived Patton's winter drive through France, who had lived through MacArthur's island-hopping, and who came out of it to remake the Republican Party and launch the new conservative movement?  Remember them?

Well, they are not with us anymore.  Oh, there are a few who keep to the path begun by them. But for too many, understanding spreadsheets and budgeting is hard work.  Reading requires attention.  So the new Republican is content to be a celebrity-chaser who has given up reading white papers for hashtags and tweets, who requires entertainment instead of facts, ice cream lies instead of hard honesty.  Piss on knowledge.  Lie to me, they say, lie to me and make me feel righteous in my anger.  It feels so good to play the victim.

When Benjamin Franklin was leaving Independence Hall at the end of the Constitutional Convention of 1787, he was asked by a Mrs. Powel, "Well, Doctor, what have we got -- a Republic or a Monarchy?"  To which Dr. Franklin replied:  "A Republic, if you can keep it."

Citizenship was never meant to be easy.  It requires attention, interest, and vigilance.  Hashtags are no substitute for reading the legislation or for understanding the numbers.  Tweets should not replace books. 

As residents of America our distractions are many but as citizens of America our attention must be to the Republic.  We have self-governance in our hands if we merely make time for it.  But that will mean putting aside those with the too-simple-to-be-true answers that allow us to happily keep to our distractions. If we want our Republic back, we are going to have to grow a set of balls, learn to read the bills and understand the balance sheets, demand to be told the unpleasant truths, and brook no easy lies. 

And yes, we are going to have to wean ourselves off debt and learn to pay our way.  Because if we don't, we will condemn our children and our grandchildren to be debt slaves to Red China.

Our favorite activist is in the dog house today

As you are all aware, we're big fans of citizen activist Harvey Roseff here at Watchdog.  But the Watchdog tries to be fair and we will call anyone out when we see a need to do so.

Yesterday, Hoboken was the scene of a horrific mass transit accident in which a train derailed, causing the roof of the station to collapse.  100 people were injured and at least one has died. 

This tragedy comes at a time when the Transportation Trust Fund (which funds 20 percent of New Jersey's mass transportation system) is bankrupt and without money.  It also comes after civil engineering experts have issued warnings about the state of the mass transit system.

Maybe Harvey missed the news about the train crash, but today we read a wild-eyed Mr. Roseff attacking Hoboken for being on the receiving end of money to maintain the very station in which the tragedy occurred.  Let's be clear, not everyone who uses the Hoboken train station is a resident of Hoboken.  Most of those injured yesterday were not residents of Hoboken.  Hoboken is a transit point used by commuters from across Northwest New Jersey. 

All of these commuters -- thousands upon thousands of them -- have automobiles.  If you deplete the mass transit system they will not quit their jobs and stay home.  No, they will take to the roads and drive to work.  And what would that do to the traffic situation?  Would it make it better... or worse?

On top of this rather insensitive attack on Hoboken because it is a transit point in a mass transportation system many of us use and we all benefit from (if only by having less road traffic gridlock), Harvey followed up with a piece of gross misunderstanding.  Yes, Hoboken is an Abbott District.  Yes, it should not be.  It has grown rich since the State Supreme Court made its ridiculous Abbott ruling more than three decades ago.

But to blame Senator Steve Oroho and the other legislators in Sussex County for Hoboken getting Abbott funding is an out-and-out lie.   We are sorry to have to tell you that, Harvey, but it is.  Go look at the Senator's record and the records of Assemblyman Parker Space, Assemblywoman Alison Littell McHose, and Assemblyman Gary Chiusano.  You will find vote after vote against Abbott spending and legislation to specifically strip Abbott status away from cities like Hoboken.   Even newby Assemblywoman Gail Phoebus is on such a bill. 

Mr. Roseff, on this issue, you don't know what you are talking about.

Reason Study author says gas tax must go up

We've all heard about the Reason Foundation study that claimed New Jersey had the most expensive roads in America.  The Reason study was controversial and other studies refuted it -- such as the one coming out of Rutgers University's Voorhees Transportation Center.

Some politicians seized upon the Reason study to argue that cost-cutting efficiencies should be put in place before any more money went to repair and maintain the state's roads and bridges.  We wonder if they would feel the same about the grossly mismanaged Veterans Administration -- close all those hospitals and services and dump the wounded out on the streets until the VA operates more efficiently. 

Others claimed that they could fund the entire Transportation Trust Fund (TTF) with savings from efficiencies and cost-cutting.  No numbers were produced to support this, but in testimony, Barauch Feigenbaum (Reason's Assistant Director of Policy) offered some excellent recommendations as to the areas in which significant savings could be achieved. 

The lamentable fact is that not since 1990 has the state's user tax on gasoline and diesel produced enough revenue to cover the cost to maintain the state's transportation system.  That year the gas tax collected $404.9 million to fund a $365 million transportation program.  The tax on gasoline and diesel hasn't gone up for 28 years, hasn't even kept up with inflation, leading to more and more being borrowed to pay for road and bridge maintenance and repair.  Today the cost of the debt service alone exceeds $1.1 billion.  In contrast, the gas tax collected just a bit more than $750 million in 2015. 

No wonder the author of the Reason study, David Hartgen (Emeritus Professor of Transportation Studies at UNC Charlotte), recently told New Jersey media that there was no way around the revenue problem the now-bankrupt TTF faces: 

Even as some say his report proves that New Jersey must cut costs before hiking the gas tax, Hartgen says the opposite may be true. The transportation trust fund is now $30 billion in debt. Without new revenue from the gas tax or some other source, it cannot spend any money on new construction. 

“I don’t think budget cuts will work,” Hartgen said. “They need to look at the gas tax.”

Property Tax rise of at least $100 for Sussex County

The loss of $4.9 million in county-wide road resurfacing funds paid for by the Transportation Trust Fund (TTF) would blow a hole in the county's budget and, unless offset by cuts to staff and programs, a property tax hike of at least $100 for the average county property tax payer.  And it goes up from there depending on what town you live in. 

An $8 million project on Route 23 that directly affects Hamburg and Wantage is among those TTF funded DOT projects that have been shut down.

Two projects in Andover Township and one in Andover Borough will cost property tax payers a half million dollars in all.  One of those projects is rock mitigation -- preventing boulders from crashing into automobiles using the road.  Byram is losing a million dollars that will have to come from the pockets of local property tax payers.  Branchville is losing $150,000.

Franklin Borough will lose two Main Street projects funded by the TTF worth over $320,000. Frankford loses $220,000.  Fredon loses $195,000.  Hampton loses $200,000.

Hardyston was to get several infrastructure projects worth $660,000 -- they're gone now.  Hopatcong loses $195,000.  Montague loses $310,000. Lafayette loses $330,000.  Newton loses $80,000.   Sussex Borough is losing $35,000 and Stanhope is losing its part of a $490,000 project.

Stillwater loses $195,000.  Sandyston loses its part of a $300,000 project.  Vernon loses $245,000,  And Wantage property taxpayers take an enormous hit with a loss of two projects worth $1.2 million -- including the repair of an aging bridge.

Since 1988, New Jersey has charged drivers just 14 1/2 cents a gallon of gasoline to maintain and improve its roads and bridges.  States like Pennsylvania need to charge drivers over 50 cents a gallon to maintain their roads and bridges.  Instead of adjusting its gas tax for inflation, New Jersey borrowed to repair its roads and bridges.  Because of this borrowing, the first 10 cents of any gas tax increase will be needed just to pay interest on that debt.

With the threat of a property tax explosion of as much as 40 percent hanging over New Jerseyeans heads, for months Senator Steve Oroho has been laboring in negotiations with the Democrat majority in the Legislature to find a way to fund the TTF and cut taxes.  Governor Chris Christie recently joined those negotiations, along with Republicans like Assembly Republican Leader Jon Bramnick and Assemblyman Declan O'Scanlon.

Fueled by media hype, those negotiations have reached an impasse and without a funding source, the Governor was forced to shut down the TTF last week.

Cloud Cuckoo Land at the Herald

Let's say you are the New Jersey Herald and you are in debt.  Your out-of-state corporate owners argue that there is fat that can be cut, things done more efficiently, savings made.  But you still need a source of funding to keep the lights on, pay the staff, and do those things necessary for your day to day operations.

Do you have the option of not paying your staff, your suppliers, your utilities, your taxes -- until you've had time to "study" the problem and come up with a solution that makes your business profitable?   We don't think you do.

But that is exactly what the Herald is suggesting happen with the Transportation Trust Fund (TTF).  The TTF is out of money... now!  So the Herald is suggesting that they spend no more on road and bridge maintenance and repairs until they figure out a way to operate more efficiently.

Now we're all for finding ways to make the TTF operate efficiently (unhelpfully, the Herald doesn't suggest any), but in the real world, we all know that when the money runs out, and the workers don't get paid, the repairs will stop.  And what that will do is make all that road and bridge maintenance and repair work the responsibility of counties and municipalities.  That's right, local governments, paid for with local property tax dollars -- your property tax dollars.

Almost $300 million every year is sent from the TTF to local governments to repair and maintain their roads and bridges.  This is about to disappear, and when it does, it will need to be replaced by local governments with a $300 million increase in property taxes.  If the money isn't replaced, and local governments willingly allow roads and bridges to become dangerous to use and if they fail to close them, the cost of the litigation resulting  from avoidable tragedies will bankrupt some local governments or force property taxes even higher. 

Yes, roads and bridges must be maintained and repaired .  And the TTF must have the money to pay for it.  Where will that money come from?  Approximately one-third of gas tax revenues in New Jersey come from out-of-state drivers.  All property taxes come from the people of New Jersey.  So which do you think is the best way to pay for improvements to roads and bridges, an increase in the gas tax or an increase in property taxes?

The responsible way is the two-track approach:  (1) Study and propose reforms to the TTF while, (2) coming up with a plan that funds road and bridge maintenance and repair without raising property taxes.  But there are those who don't want to be responsible, and we know why.

We know why AFP would rather raise property taxes than a gas tax.  AFP is a top-down organization funded by one of the world's biggest producers of petroleum products.  The people who fund AFP are using it to lobbying for their special interests and a user tax on gasoline affects their bottom line.  As a national organization funded by a globalist elite, AFP isn't concerned that New Jersey property taxpayers will be spending $11 billion on subsidizing the use of our state's roads by out-of-state drivers. 

And we know that newspapers like the Herald are desperate to have taxpayers continue to subsidize them.  State law requires that advertisements be placed in newspapers for many official actions -- like notices of sheriff sales and local government budgets.  Millions of property tax dollars are spent each year by local governments for these advertisements and that money goes directly into the pockets of the corporate entities that own and control the newspapers.  Modern technology has made this expense antiquated and unnecessary.  Today, notice could be given on government-owned websites for a tiny fraction of the cost property taxpayers are paying now to newspapers. To the Herald, keeping this subsidy is more important than keeping the lid on property taxes.

***

THIS JUST IN... A new Rutgers University study of road construction costs shows that the Reason Foundation study AFP is touting is just so much bullshit.  Hey, we get it. He who pays the piper calls the tune and Reason, like AFP, is funded by those same producers of petroleum products.  Below is the statement released by Rutgers.  You can read the full study here.

   
For Immediate Release:  May 19, 2016                   

Contact:  Steve Schapiro  609.530.4280

Kevin Israel

Daniel Triana                                                   

Rutgers study estimates cost to build and maintain NJDOT roads  Research part of analysis to better understand transportation infrastructure costs    

(Trenton) – New Jersey Department of Transportation (NJDOT) officials today announced the release of a new study conducted by Rutgers University’s Alan M. Voorhees Transportation Center that determined the average cost to plan, construct, operate, and maintain one mile of roadway under NJDOT jurisdiction is $183,757. 

 
The study is part of a two phase effort to provide an understanding of aggregate costs associated with NJDOT roadways and bridges. Rutgers will conduct additional research to understand more completely the factors that influence cost efficiency. 

 
“The New Jersey Department of Transportation is committed to providing a modern, safe, and reliable transportation system throughout the State in the most effective manner possible,” NJDOT Acting Commissioner Richard T. Hammer said. “The study is part of an on-going effort to identify those factors that drive costs in New Jersey’s public transportation sector.” 

 
The Rutgers study found that on average nearly 60 percent of total transportation-related expenditures are for activities not directly associated with planning, construction, operating, and maintaining roads and bridges under NJDOT jurisdiction.  These costs are related to expenditures for NJ TRANSIT, debt services on transportation bonds, funding for local road projects, aviation, maritime and rail freight, and contribute to providing a comprehensive and safe transportation system throughout the State. 

“The Rutgers study stands in stark contrast to a recent report that grossly over-reported New Jersey’s highway costs at $2 million per mile,” Hammer said, noting that the Rutgers study concurred that it is inappropriate to include the entire debt service amount on transportation bonds when calculating lane mile costs, and that additional analysis is required to isolate the portion attributable to highway projects. 

The study also determined that on average $1.5 billion is spent annually on highway expenses, and of this amount, approximately 60 percent is attributable to construction.  Less than four percent is attributable to administration, planning and research.  The remainder goes toward operations and maintenance.  
“The facts of this study not only demonstrate the Department’s responsible stewardship of taxpayer dollars,” Hammer added. “But also will allow NJDOT to single out cost driver outliers, which will in turn provide the Department the ability to target future efficiency efforts.” 

Phase II of this study will conduct an analysis of toll road authority expenditures and produce a detailed case study analysis of various NJDOT and toll authority roadway and bridge projects to understand cost efficiency variation more completely.  

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Click here to see the study. Courtesy of My Central Jersey