SENATOR CODEY & ASSEMBLYMAN ROBERTS ECONOMIC CRISIS AGENDA: The Good, The Bad & The Ugly

Governor Corzine, Senate President Codey and Assembly Speaker Roberts have had an epiphany the people of New Jersey are in deep economic distress and the State Budget is in a fiscal crisis that requires emergency action. Indeed, both Codey and Roberts quickly endorsed the Governor's holding of an emergency economic summit.


Thus, it comes as no surprise Assembly Speaker Robert's October 1, 2008 press release unveils, what he describes, as a "broad economic agenda for unprecedented [October 6,2008] Assembly Committee sessions." It further comes as not surprise that, on October 3, 2008, Senate President Codey announced a hearing on similar legislation.

The question is whether either Senate President Codey or Assembly Speaker Robert's Agenda" will be effective in meaningfully addressing the current economic stress while not substantially increasing the structural deficit.


I. The Framework For Creating Counter Cyclical Fiscal Policy.


The primary task of counter cyclical policy, even at the State level, is to stop the downward spiral in economic activity. Government spending and fiscal policy, however, are not synonymous. Effective fiscal policy is based on three general principles.


It must (1) be timely: "In the worst case, poorly timed policies add instability to the economy, potentially exacerbating rather than damping businesses cycle." It must be (2) targeted: "tax cuts and spending increases should be directed sothat each dollar generates the largest possible increase in short-run GDP. Tax cuts and spending increases shouldbe directed so that they provide the greatest benefit to people who are affected most adversely by an economic slowdown." And, it (3) must be temporary: "tax and spending changes must be temporary and not increase the already large long-run budgetdeficit."


II. The Codey - Roberts Economic Agenda: The Good, The Bad, and The Ugly


The hodge-poge of Bills to be reviewed on October 6, 2008 by an assortment of Assembly and Senate Committees are summarized in theRoberts' October 1 and Codey October 3 press releases. What follows draws directing from and is a first impression based on them.


THE GOOD


1. BEST IN CLASS. The Commerce Committee will consider legislation to provide a corporation business tax and grossincome tax credit to employers who allow their employees to telecommute. The bill is sponsored by Assemblyman Michael Patrick Carroll (R-Morris).


The bill is timely as those effected immediately have more money in their pockets. Lowers demand for gas and thereby reduces inflationary cost pressures. Lessens road usage and is environmentally friendly because it reduces useof fossil fuel. Change is consistent with and supportive of ongoing structural changes in the way New Jerseyian's makea living. Facts to watch for (1) number of people it benefits and (2) whether dollar benefit of incentives is greater than cost to budget. In short, is it budget deficit neutral?


2. A-688 scheduled for Budget Committee would provide an annual cost-of-living increase in a program that helps low-income seniors and disabled persons pay gas and utility bills. The increase - proposed by Assembly members Grace Spencer (D-Essex), Anthony Chiappone (D-Hudson), and Elease Evans (D-Passaic) - would be proportional to the increases in the Social Security benefit for the year; the current level of assistance is only $225.


GOOD IDEA BUT BAD BILL. This Bill, like many of the others, is little more than a resubmission from a previous session. Cost index may not accurately reflect price changes. Timing requires enactment prior to onset of winter. Targeting may be narrow as it does not encompass all who are unable to afford heating costs. Maybe there is another bill or law that covers others, but it seems clear kids shouldn't be cold. Permanent nature adds to structural deficit as cost is projected to rise from estimated $2 million in 2009 to plus or minus $11 million in 2013. Danger of permanently increasing fuel prices for all taxpayers. Longer term emphasis may make better use of State resources by concentrating on individual unit conservation.


State may also find it helpful to monitor the spread between the wholesale price of fuel reflected in the futures market and local dealer's retail prices.


3. GOOD IDEA BUT BAD POLICY. The Assembly Health and Senior Services Committee and Assembly Human Services Committee will hold a joint hearing on the impact of the crisis on health care and social services such as food stamps, Medicaid and NJ FamilyCare.

State should assure people have food and medical care as needed. Now, however, is not the time for structural healthcare policy changes that fix uncertain budget costs. Increase spending for food and emergency care over the short term, but forget the rest until after the new President is inaugurated.

4. A-2997 would remove limitations and extend grants under the Business Employment Incentive (BEIP) program while a bill sponsored by Assemblyman Matt Milam (D-Cumberland/Atlantic/Cape May) would make it easierfor small and mid-size businesses to take advantage of the Business Retention and Relocation Assistance Grant Program BRRAG) program.

GOOD, GOOD AND BAD. Programs that expand resident employment has the potential to help stabilize. Keeeping Companies in NJ is also a priority. Attracting out of State business to uncertain and takes too long.

THE BAD

5. Legislation A-2517 Assemblywoman Watson Coleman is sponsoring to create a fund to provide foreclosure preventioncounseling and make loans and grants available to nonprofits that help homeowners as well as require creditors seekingto foreclose on a subprime loan to offer a six-month hold to let borrowers negotiate refinancing.


Preventing foreclosure is in everyone's interest. That said, assuming for the moment 1)the structure of emergency loans realistically forestalls foreclosure, 2) the rental alternative is affordable, 3) the costs are not prohibitive, and 4) unintended consequences have been considered, then A-2517 is positive. There is no doubt the financial help is timely. Depending on the duration of any loans it can be temporary.


Keeping people in the homes, regardless of income levels, is good in both the short and long run for the families, the towns’ property values, and State revenues. The concern is given the deep and protracted nature of across the board demand destruction, it is not enough. The bias here is the owners, be it a family or a landlord, of pre-foreclosure as well as foreclosed properties can be aided via the use of free floating COAH requirements to bridge the difference between any particular ability to pay and the salvage value or replacement value collaterializing the loan.



The remainder of the bill seems to (1) duplicate and perhaps enhance current Federal and State programs and, (2) assuming lenders have not been chasten and as new practices are being quickly implemented, the other bills may correct the sins ofthe past.

6. The banking and housing panels also will take up A-2496 sponsored by Assemblyman James Holzapfel (R-Ocean) that would require debtors to receive two weeks notice prior to a sheriff's sale of foreclosed property. The bill also would require a sheriff's office to give a debtor notice when there has been a surplus in the sale offoreclosed property.


7. A joint meeting of the Assembly's Financial Institutions and Insurance and Housing and Local Government committees will review A-281. Assemblymen Gary Schaer (D-Passaic) and John Burzichelli (D-Gloucester) are sponsoring to impose tough new requirements on foreclosure consultants and others who contract with homeowners facing foreclosures.


8. Assemblywoman Nilsa Cruz-Perez (D-Camden) is sponsoring A-2272. It includes the sale of securities under the Consumer Fraud Act to protect consumers from deceptive sales and advertising in the marketing of securities.That measure will be heard in a joint meeting of the Assembly Law and Public Safety and Regulated Professions committees.


THE UGLY


The following Bills may or may not represent sound changes to the economy's structure. However, in this time of uncertainty, the obvious shift in structural demand, and the catastrophic condition of the State's finances, these Bills need to be considered in the larger, more measured context of unfolding events and unforeseen consequences. The reasons are straightforward.


Each of the Bills make long term permanent changes to the tax structure. Hence, by the very nature of the change the impact on the State's economic well being is not immediate, but rather it is incremental over the long term.


Second, such bills do not target the immediate cause of the problem. New Jersey's economy is slowing. More people will be unemployed and less goods and services will be purchased. The problem, therefore, is one of how to support faltering demand, how to stop the downward spiral. The proposed longer term changes increase supply at a time when production is being scaled back and the longer term outlook for the amount of sustainable production, and its mix, are uncertain,unknowable and thus immeasurable. With the structural changes in the financial industry, New Jersey's reliance on that industry as a source of revenue and the implication for both consumption, and the potential impact on unemployment and underemployment, the focus needs to remain sustaining people and demand.

Finally, permanent tax cuts and credits are generally counterproductive as they tend to wreck havoc on the structural budget deficit. Conversely, short term cuts and credits, whether immediate or rebatable, have a history of being equally as effective. Moreover, temporary cuts or credits have an immediate short term impact but since they are temporary, minimize the lasting impact on the structural deficit.

9. WORST IN CLASS. A-3124. Assemblymen Louis Greenwald (D-Camden) and John McKeon (D-Essex) are sponsoringto enable businesses to write-down net operating losses for up to 20 tax years. The Senate appears to be discussing the same legislation.


For the reasons set forth above such actions are generally seen as ineffective at best and counterproductive at worst.The impact is generally small and the cost is usually prohibitive because it results in a permanent increase to the deficit. Also, the time to impact is long. The argument the bill would put New Jersey in line with neighboring states that allow businesses such a time frame to recoup losses should not be assumed to more effective in attracting businesses given the unspoken differences between overall State tax structures. Moreover the sponsors’ contention the reform is especially needed by small businesses that might not otherwise be able to weather the current economic storm makes no sense. There is no apparent reason to believe increasing the time to write off net operating loses from seven to twenty years willprovide any immediate relief from current turmoil, yet it would seem to increase the structural deficit.


10. Measures to promote job creation through alternative energy initiatives will go before a joint meeting of the AssemblyTelecommunications and Utilities and Environment and Solid Waste committees. A-843 would provide equal opportunity for businesses to receive energy-related incentives and funding and A-2550 would permit wind and solar facilities within industrial zones. The first measure is being sponsored by Assembly members Upendra ChivukulaD-Somerset) and Marcia Karrow (R-Hunterdon/Warren); the second by Assemblywoman Pam Lampitt (D-Camden), Chivukula, and Assemblywoman Connie Wagner (D-Bergen).

11. The Assembly Commerce and Economic Development Committee will hear A-2722 which is sponsored by Joseph Vas (D-Middlesex), Greenwald and Assemblyman Albert Coutinho (D-Essex). Its purpose is to reshape how certain corporate sales made inother states are taxed, and eliminate a provision that increases the amount of a corporation's entire net income thatis taxable by New Jersey.

ORGAN DONOR OR BODY SNATCHER: Codey’s Inquisition v. Personal Freedom

If New Jersey Senator President Dick Codey has his way the (1) State created substantive right to drive (2) will be contingent on those who apply for, or who seek to renew, their driver’s license obeying the State’s policy to “encourage positive donation” by making a totally unrelated but repeatedly mandatory and public decision (3) as to whether or not the applicant will make a carte blanche “donation” of his or her body, organs, and / or tissue for transplant, research and / or education. New Jersey Hero Act,S-755. (Adobe Reader).

What follows does not attempt to debate the pros and cons of permitting one’s body, organs, or tissue to be harvested for transplant, research or study. It is certainly not meant to be a legal opinion. But when both Blue Jersey and NJ 101.5’s Jim Gearhart oppose the bill’s overreaching mandates one takes notice. It makes one ask: Does the State have the right to ask and demand an answer to such intimate questions, and if so, is the proposed method permissible.

Be forewarned, however, the view here is the legislation, as written, is a patronizing hodge-podge of self-aggrandizing bad law and an incoherent self-serving attempt to slip as much of that bad law as possible by the people. Additionally, reading it together with the proposed Revised Uniform Anatomical Gift Act, S-754 or in the light of 18 U.S.C. 2721 (a)(2). does nothing to change that view. Indeed, where is the OLS legal opinion? Is there one?

LEGISLATION PROPOSAL S-755 CONTENT

Make no mistake – refuse to answer Codey’s questions and the application process is over. According to Senator Codey’s February 14, 2008 testimony, (Windows Media), applicants for driver licenses are required to make a legally binding and recorded declaration concerning their body parts prior to continuing the application process. To “encourage positive donation”, applicants will be met by a State agent, i.e. a motor vehicle employee, who will ask up to three questions. The first is whether the applicant wants to have their remains harvested for transplant, research, or education. It’s an all-or-nothing proposition.

If the answer is yes, the applicant is given a number required for continuing on in the license application process.

If the applicant is not willing or able to make the on-the-spot decision, he or she is asked to name a third party who will be legally responsible for a future decision in the event of the applicant’s death. Upon naming a guardian the applicant is given a number required for continuing on in the license application process.

If the applicant refuses to designate a guardian and proceeds to an outright no to “donation”, the response is recorded and the applicant is given a number required for continuing on in the license application process.

Five years from the date of enactment applicants must answer the same questions via online access or at their DMV office prior to applying for or renewal of a driver’s license. New Jersey Hero Act S-755, p.7, section 8. At the end of the process there will be a donor designation on the driver’s license. New Jersey Hero Act, S-755, p.7, section 8.

SENATOR DICK CODEY’S ORGAN BILL, S-755, SEEMS TO VIOLATE THE FUNDAMENTAL RIGHT TO PRIVACY

Despite the seeming lack of specific guidance, tradition can only lead one to the conclusion the individual has a fundamental right to determine the disposition of one’s remains, and therefore, that right is entitled to be exercised in a manner that is free from government interference.The U.S. Constitution recognizes the individuals have a fundamental liberty interest in independence in decision making and avoiding disclosure of personal matters. First among those privacy interests is a person's body. Schmerber v. California, 384 U.S. 757, 770 (Criminal case)(1966). Indeed, "Every human being of adult years and sound mind has a right to determine what shall be done with his own body." Cruzan v. Director, MDH, 497 U.S. 261, 269 (1990).Even where the privacy interest does not rise to the level of fundamental right, analysis of “ ‘privacy’ interest[s] has in fact involved at least two different kinds of interests. One is the individual interest in avoiding disclosure of personal matters, and another is the interest in independence in making certain kinds of important decisions.” Whalen v. Roe, 429 U.S. 589, 599-600 (1977).

A statute impinging upon a fundamental right is presumed to be unconstitutional. Harris v. McRae, 448 U.S. 297, 312 (1980).

1. To overcome that presumption, the state must prove its intrusion is not just legitimate, it must prove it to be compelling. "Compelling" generally refers to something necessary, as opposed to something merely preferred. Here, therefore, the government interest in attempting to “persuade” the public to become organ donors is, if anything, merely legitimate because it is the government's preferred option. It cannot be a compelling or necessary interest because it does not, and one could easily argue cannot, mandate organ or tissue donation for transplant, research or study. Conversely, there is no fundamental legal duty to donate.

2. That should be the end it. But, for the sake of argument, let’s assume the court wants to know whether the statute meets the lesser standard of “undue burden” on the right to decision making free from government interference. Now ask yourself the question: Could the State require a woman to decide if she will be a parent in the following four years. If she becomes pregnant during that time, dies while pregnant, regardless of whether the child is or is not viable – what happens to the fetus . Also, will the State inform the women she can give up the right to decide when and whether to have a child by making four year prior notice to a third party who is given the decision making power? Think that answers it….

3. Finally, comes the matter of privacy and “donor” identification on a driver license.Either the appearance or lack of appearance of donor status on a driver license informs everyone who looks at the license of the individual's decision. Yet such identification is neither effective nor necessary. It’s certainly not effective because the only proof as to “donor” status that matters is the “Donate Life NJ Registry”. New Jersey Hero Act, S-755, P.7, section 7(2) (d) . Accordingly, what is on the license must be checked with the registry before any action is taken.

Furthermore, it does not even attempt to minimize the intrusion on privacy as every license is seen by bartenders, librarians, grocers, etc. Thus, unlike the registry, there is absolutely no protection from the eyes of the unnecessary, the uninvolved, the unintended and the curious.

SENATOR LESNIAK SELLS PUBLIC OUT TO CORZINE FISCAL RESTRUCTURING & TOLL MONETIZATION PLAN

Senator Lesniak's betrayal of the public interest to the Corzine fiscal restructuring & toll asset monetization plan speaks for itself.

The 800% road tax was announced by Governor Corzine in his January 10, 2008 State of the State address. On January 16, 2008 Senator Raymond Lesniak told Star-Ledger Reporter Joe Donohue in an article titled Lesniak wants governor to drop toll plan for Route 440 ;

"If they want 440 in there, they will have to find someone else to sponsor it. I won't," said Lesniak, one of the earliest proponents of using the state toll roads to ease the state's financial problems."

With Senators Adler and Van Drew joining the 17 Republican Senator's in opposing the road tax,
any vote in the Senate would tally 20-20, and thus fail.

The Star-Ledger then reports that at Governor Corzine's Middlesex "Town Hall"meeting the Governor announced "Tolls on Rt. 440 'not happening,'"

On September 10, 2008 reformed sinner Lesniak turned Corzine attack dog when he posted a guest article in the Star-ledger smearing New Jersey radio station 101.5 fm [for] self-promotion and pandering because they have actively opposed the Governor's toll road tax.

Senator Raymond Lesniak's February 11, 2008 Star-Ledger post "Lets Talk About Corzine's Toll road plan" is even funnier as Senator' Lesniak's Rah-Rah speech waxes poetic about political courage during tough times and the need for all to support the Governor and reach a solution.

Is that a lesson in slick practices or what?