Fairness In Taxes

Taxpayer Protection Ordinance Update

Upon remand from the New Jersey Supreme Court, the Appellate Division reached the same conclusion on the Taxpayer Protection Ordinance (TPO) as it did the first time it reviewed this case last year. It held that that the “TPO in this case, proposed by initiative petition, and which caps municipal budget, debt, and salary of municipal employees, would be invalid.” This holding is limited to caps created by initiative petition. The opinion does not specifically hold that it is beyond the power of a municipal governing body to enact its own budget caps. Several years ago the governing body of , passed a TPO similar to the one proposed here without the resulting “chaos” opponents of our TPO predicted.

However, several passages in the Court’s opinion seem to go farther. The Court reasoned that the State had “preempted” the field in budgetary matters. Although no state statute expressly prohibits a municipality from enacting its own cap laws, and the Faulkner Act grants municipalities the right to subject “any ordinance” to initiative, the court cited the existence of the state Budget Cap Law, Local Budget Law, Local Bond Law and specific referendum provisions as evidence that the legislature reserved to itself the power to limit municipal spending.

It is fair to ask whether FIT’s three-year fight to limit uncontrolled increases in City spending, borrowing, salaries and benefit increases was worth it. We think sometimes the battles lost are the ones most worth fighting. Indeed, the fact that the state passed a Budget Cap Law for municipalities shows someone in was paying attention to what was happening in . You can’t be on the cutting edge without drawing some blood.

A new Ocean City School District Teacher's Contract is in negotiation...

Some facts about the CURRENT CONTRACT:

Currently, Taxpayers fund not only generous automatic negotiated annual Salary increases with NO connection to performance but ADDITIONAL automatic Longevity Increases beginning after 14 years of service and up to a maximum of $8,000 per year.

	•	Why do we still have anything such as an annual longevity increase and no performance connection for among the highest teacher salaries in the State?
		Currently, Taxpayers fund FULL Insurance Premiums for Health and Dental for the Employee, or Husband and Wife, or Parents/Child, or Full Family Plan with NO Employee Premium contribution.
	•	Why don't employees contribute fairly to their generous Health and Dental Care benefits like other Ocean City employees?
		Currently, Taxpayers fund FULL Dental coverage Premium for PART TIME employees.
	•	Why do we pay for FULL TIME benefit for a PART TIME employee?
		Currently Taxpayers fund 10 to 12 sick leave days per year per employee with accumulation of unused sick leave days from year to year "WITH NO MAXIMUM LIMIT" on the number of unused sick days to be paid in lump sum when an employee leave the School System.
	•	Why isn't there a reasonable cap on accumulated sick leave days?

How does this compensation, benefits and perks picture compare with your own personal experience? And this is only the tip of the iceberg! Fairness in Taxes is looking for a Contract that is balanced fairly for the Taxpayers as well as the Employees!

The State of New Jersey caps School District Budget increases, so every extra dollar spent on exaggerated and excessive salary increases, cash benefits, or unnecessary staffing means FEWER direct dollars to our children's other educational needs!

Fairness in Taxes, PO Box 565
Ocean City, NJ 08226
www.fairnessintaxes.com

Attempt to tie city spending to cost of living remains alive

By Michael Miller, The Press of Atlantic City

(Published: Wednesday, May 28, 2008)

OCEAN CITY - Taxpayers who want to tie city spending to the federal cost of living have new hope.

The state Supreme Court this month remanded the proposal to the Appellate Court for further review.

The proposal called the Taxpayer Protection Initiative would tie city spending to the annual cost of living. If the city wanted more money in a given year, it would have to ask voters first. The same system would apply to union contracts and city debt.

A state Appellate Court last year rejected the proposal, saying the state Legislature never intended for municipal budgets to be subject to public referendums.

The court agreed with case law that determined that "such a scheme threatens to place municipal governments in a straitjacket and make it impossible for the city's officers to carry out the public's business."

Superior Court Judge Joseph C. Visalli last October ruled in the city's favor, saying the proposed measure would lead to financial chaos.

But the state Supreme Court sent the proposal back to the lower court after overturning another New Jersey budget case.

The federal cost of living adjustment for 2008 was 2.3 percent. By contrast, City Council approved a 10 percent tax hike this year.

"I don't know that financial chaos is how I would describe it," said Mayor Sal Perillo, who opposed the group's plan.

"We have the state caps, which have turned out to be pretty effective restraints on municipal spending," he said.

Perillo noted that the city has trimmed staff by 10 percent from 291 in 2004 to 263 full-time employees this year.

The city initiated the lawsuit by asking the court to rule on the legality of the issue.

Among the taxpayers pushing the initiative are James Tweed, Joseph Somerville, Dennis Myers, Fred Hoffman and Pete Guinosso. Their lawyer, Frank L. Corrado, said the Appellate Court still might rule against them.

"The real issue in the case is whether there are other statutes in New Jersey that pre-empt a municipality from enacting a budget-cap ordinance," he said.

Taxpayer Protection Ordinance Update

The Supreme Court of New Jersey has summarily remanded the Taxpayer Protection Ordinance case to the Appellate Division. This means the Appellate Court must reconsider the case in light of a recent the Supreme Court decision that overturns a 40-year-old lower court case upon which both the Appellate Court and the Superior Court relied.

The Superior Court held, and the Appellate Division affirmed, that the Taxpayer Protection Ordinance was invalid and could not be adopted by initiative. That decision was based partly on the rationale of Cuprowski v. Jersey City, which held municipal budgets were “administrative” rather than “legislative” acts, whose adoption or nullification by popular vote would result in “chaos.” The lower courts were not persuaded by our argument that an ordinance adopting a prospective budget cap by initiative differs significantly from a retroactive attack, by referendum, on an already-adopted budget.

By summarily remanding the case, the state Supreme Court has merely said the Appellate Court must rethink the case in light of its inability to rely on the Cuprowski rationale. The Appellate Court could again rule against us. But if it does, it must come up with a better reason.

We hope the Appellate Court will now apply the same “plain language” rule that the state Supreme Court applied to the Faulkner Act when it overturned Cuprowski. That Act, under which Ocean City is governed, grants citizens the unequivocal right to propose and vote on “any ordinance” through the initiative process. The issue on remand will likely be whether other state laws except the Taxpayer Protection Ordinance from this plain and unequivocal language.

What’s next? The Appellate Court may, or may not request additional briefs and/or oral argument on the case.

Open Letter to Jeff Van Drew, Nelson Albino, and Matthew Milam

March 20, 2008

The Honorable Dr. Jeff Van Drew, Senator The Honorable Nelson Albino, Assemblyman The Honorable Matthew W. Milam, Assemblyman
21 North Main Street
Cape May Court House, NJ 08210

Gentlemen:

Your recent March 11, 2008 was most appreciated. Your 7-point plan is a small beginning to addressing the root cause of the continuing budget deficit. In itself it is not the answer, a beginning perhaps but not the solution.

I offer the following comments on your seven initiatives which it seems from your letter you believe will lead the state in the right and prudent direction to fiscal responsiblity:

• Regarding the Constitutional amendment SCR79, while it would end using non recurring revenues it does nothing to reduce the massive deficit.

• Again, it appears that all you are doing with Constitutional amendment SCR78, is prohibiting the State from borrowing money and incurring debt – without voter approval. What is needed is a moratorium on financing such as this; until the state has a fiscal plan that makes sense.

• With SCR50, you are amending the state Constitution by placing a cap on spending. What good is the cap when you still have not addressed the core issue – pension reform?

• S421, legislation introduced, would reduce the Trenton bureaucracy by 10 percent. This is a great idea, the problem is for this reduction to be meaningful it has to reach all levels of government – state, county, authorities and municipalities, otherwise it is self defeating.

• Constitutional amendment, SCR49, would create a “rainy day” fund. At this point in time it is a bad idea. Once you have a balanced budget; then perhaps you can put funds aside for a rainy day.

• Bill, S1388, for a new state Comptroller -- a good idea, however, it is too late to attempt to rein in a runaway budget. All this new cabinet position will do is create more jobs and increase the cost of government.

• Bill, S230, to reduce unnecessary printing costs – a reasonable attempt, but, the end result in the state budget is a savings of pennies.

Unfortunately, fiscal stability can not be accomplished with piece meal legislation. You are right it will take courage on the part of the Legislature and the Governor, however, until the Legislature and the Governor addresses the root cause of the problem all you will continue to do is dig a deeper hole and find the state further in debt.

If there ever was a time for immediate action, the time is now.

The Governor and the Legislature must accept the fact that what is needed is a complete reform of the pension system. No matter what the pain the state must do away with double dipping, a massive reduction in the number of political appointments at all levels of government – state, county and local and at the same time a major reduction in the work force.

The Governor and the Legislature can no longer continue to dance around the real issue confronting all our citizens. Simply put, the issue is an excess of public employees collecting salaries, fringe benefits and pensions that the ordinary citizen and taxpayer never in their lifetime will collect.

It is painfully obvious that what we have here in New Jersey are two groups of citizens. The ordinary citizen who receives a modest pension and health program at retirement and at the other end of the spectrum we have the government employee, the elected officials and appointed officials who retire with excessive five and six figure pensions and health benefits adding an additional five figures to the retirement salary. This alone puts all government employees above the private sector employees; yet they still have a trump card. They have “colas” which increase their benefits every year.

The mission of the Legislature should be to recommend to the Governor that tolls should be increased a nominal amount. These funds should be dedicated to the toll roads to maintain their infrastructure. The funds should not be diverted to any other use.

The Legislature should recommend an increase in the gasoline tax. These funds should be dedicated to the Transportation Trust Fund. They should be used only for the secondary road system.

Finally, all pensions should be placed on the table and the Legislature should bring the pension and benefit system into the 21st century. What the legislature gave; the legislature can take away no matter how painful.

The retirement ages should be reconsidered along with programs such as the 401K type. If corporations can layoff tens of thousands of employees and adjust benefits and pensions; so too can the state take such drastic actions.

We can no longer wait. The time for action is now.

Very truly yours,

Louis C. Ripa, J.D., B.S.C.E.

2008 Taxpayer Rally

Click here to see the slide show from the 2008 Taxpayer Rally.

Governor Corzine and the Legislature “junkies” for sure

Having read the plan put forth by Governor Corzine, one has to wonder where he has been since he took office two years ago regarding fiscal responsibility.

While former Governor McGreevy did his best to increase the budget and add to the problems of the citizens of New Jersey; the current Governor has done much of the same.

In reviewing his budget figures over the two year period since taking office the Governor has increased spending by $5 billion an 18% increase. No small amount. Last year, he continued along with funding school construction increasing the state budge by 7% and at the same time giving double-digit raises to judges and prosecutors thereby increasing their pensions dramatically.

In his speech the Governor stated he was fiscally responsible while on the other hand elected officials were not, he cited contract givebacks he negotiated with state employees last year. For the record this amounts to .001 percent of the state budget. It is time for the Governor and the entire Legislature to begin a pattern of “withdrawal” and come into the real world.

During his speech he failed to acknowledge the recommendations put forth by the special-legislative committees last year. His budget for the coming year calls for a small 1.5 % reduction when compared to the 18% increase he approved during his first two years; you can see the savings proposed amount to nothing. A lot of talk yes, but no solution to the real problem.

When will the Governor and the Legislature wake up and realize that we are no longer bleeding we are hemorrhaging and that requires drastic action or the patient will die.

New Jersey ranks in the top ten with regard to number of employees and budgets. What is needed is a complete reform of the pension system—doing away with double dipping, a reduction in the number of political appointments at all levels of government—state, county and local and at the same time a major reduction in force.

The Governor and the Legislature continue to dance around the issue; until they realize the only answer to beginning to balance the budget is to address the real problem—too many public employees collecting salaries, fringe benefits and pensions the ordinary citizen and taxpayer can no longer afford.

Wake up Governor, the time is now or we surely will go into bankruptcy.

Governor, you should increase tolls a nominal amount. These funds should stay with the various agencies to maintain their roads. You should increase the gasoline tax and dedicate those funds to infrastructure projects for all the other road systems. You should no longer take funds from the authorities to solve other problems. The authorities should be self sufficient.

As stated previously, all pensions should be placed on the table and the legislature should bring the pension system into the 21st century. Retirement ages should be reconsidered along with programs such the 401K type. If corporations can layoff tens of thousands of employees and adjust benefits and pensions so to can the state if drastic actions are necessary.

In my opinion the time for action is now.

Louis C. Ripa, J.D., B.S.C.E

Ocean City, NJ

TELL YOUR MAYOR AND CITY COUNCIL THAT WE WILL NOT ACCEPT THESE INCREASES

Spending increases 7.00%
Taxation increases 12.257%
Equivalent tax rate increase, excluding ratables is 12.11%

1ST WARD JODY ALESSANDRINE 391-8598 jodya3@comcast.net
AT-LARGE SCOTT PING 399-0413 scottping2006@yahoo.com
AT-LARGE MICHAEL ALLEGRETTO 432-8739 Michael.Allegretto@prufoxroach.com
2ND WARD GREGORY JOHNSON 457-4764
MAYOR SAL PERILLO 703-7675 sal6767@yahoo.com
AT-LARGE KEITH HARTZELL 399-5324 keithhartzell@hotmail.com
3RD WARD JACK THOMAS 399-9586 jackthomaocnj@comast.net
4TH WARD ROY WAGNER 399-4429 edwinaroyoc@yahoo.com

Below is an article that appeared in the January 18, 2008, edition of the Press of Atlantic City. Mr. Miller’s article is very informative and gives us some thought provoking comments about the presentation of the 2008 Ocean City Budget by Mayor Sal Perillo. There are several statements that need to be commented on prior to our members and taxpayers of Ocean City reading this article.

Because of information given to Michael Miller by the city, he states in the article

“… the city's payroll is increasing by just 4 percent.”

FACT: It is important that you understand that the increase in payroll for fulltime personnel increased more than 6%. This 6% includes pending salary increase of $400,000 that was erroneous listed as a FICA (Federal Insurance Contributions Act) figure rather than being listed as the full time salary number. The pending salary increases are associated with the ongoing contract negotiation with the firefighters union.

“The city plans to eliminate two (2) positions this year in addition to the nine (9) positions cut last year.”

FACT: These nine positions were funded but the positions were never filled. In reality, there were no cuts in personnel associated with those nine positions.

O.C. mayor calls for 12% tax hike

By MICHAEL MILLER
Staff Writer, 609-463-6712

OCEAN CITY — Mayor Sal Perillo spent most of his budget address Thursday touting last year's accomplishments, such as savings with trash contracts and an upcoming beach fill.

He saved the bad news for last — a proposed 12 percent tax hike in his spending plan.

"We already know that 2008 will be a difficult year, not only for Ocean City but for all communities in New Jersey," Perillo said.

Ocean City for the first time in many years saw a staggering drop in equalized property value from $14 billion last year to an estimated $12.5 billion in 2008.

In his eight-page speech, the mayor neglected to mention a few important figures — such as the total budget ($60.5 million) and the amount to be raised by taxation ($42.9 million).

And he fudged the tax impact, declaring in his speech an 8 percent tax-rate hike for 2008. (The tax rate is actually going down this year, thanks to the revaluation.)

The mayor is proposing a tax rate of 34 cents per $100 of assessed property value. This year's property revaluation makes a comparison with last year's tax rate unhelpful. But the tax levy—the total dollars city property owners must pay—will go up by an estimated 12.2 percent.

Perillo blamed several factors outside the city's control for the tax hike. City pension costs are increasing by $700,000 this year. The city must pay the library 15 percent or $500,000 more this year. All told, these factors alone increase the city's budget by more than $4 million, Perillo said.

The mayor touted the island's comparatively low tax rate—36th lowest of 39 towns in Atlantic and Cape May counties by his account. But many residents here pay significantly more in actual tax dollars because of the high value of their properties compared to those in neighboring towns. The city plans to cut two more full-time employees this year in addition to the nine cut last year. As a result, the city's payroll is increasing by just 4 percent.

The city plans to spend $20 million on capital improvements this year using $11 million in grants. One of those projects will provide solar power to four public buildings using $1.6 million in private funds.

The city plans to spend $5 million on roads and drainage and will replace equipment on three playgrounds.

The city will begin construction on a 7,000-square-foot senior center next to the public library. Ocean City also will benefit from an $8.8 million beach-replenishment project to begin in a matter of weeks.

As part of his budget message, Perillo announced several new initiatives. Soon, the city will offer a reverse 911 system to notify residents by phone, e-mail or text message about flooding or other emergencies.

The mayor is launching a tax-abatement program to encourage residents to rehabilitate historic buildings instead of demolishing them.

Cape May County plans to build a new 7,500-square-foot senior center next to the library, which also is expanding.

Under Ocean City's form of government, City Council may set the tax rate and simply let the administration determine how to meet it. But past councils have made specific recommendations about ways to cut taxes, and this year likely will be no different. Various budget meetings are scheduled for later this month.

To e-mail Michael Miller at The Press: Mmiller@pressofac.com

“What, me worry?”

FOR MANY YEARS FAIRNESS IN TAXES HAS SPOKEN AGAINST AND HAS WARNED OF THE DESTRUCTIVE IMPACT THAT THE UNREASONABLE BUDGET INCREASES WOULD HAVE ON OUR COMMUNITY. UNFORTUNATELY THOSE WARNINGS WERE MET WITH CYNICISM AND SARCASM YEAR AFTER YEAR. THE FOLLOWING IS A LETTER WRITTEN BY JIM TWEED, A FIT BOARD MEMBER, AND WAS PUBLISHED IN THE LOCAL NEWSPAPER.

“What, me worry?” I’m beginning to feel like the clueless face of Alfred E. Neuman smiling out from the cover of “Mad” magazine. At least that’s how the taxpayers of Ocean City must be seen by some. The millions of dollars in increases in pensions, health care costs, and contractual salary obligations are being treated as if it’s news. It’s only new if you have not been paying attention for the last 5 years. There have been voices warning us about this for at least that amount of time. They have routinely been dismissed as “pockets of negativity,” “angry,” or some other disparaging remark. After Ocean City’s auditor, Leon Costello’s presentation last Tuesday, those “weirdo’s” now look like biblical prophets.

I wonder if anything will really change. Some will look for people to blame. That’s much easier than finding a solution. It’s also a waste of time. The leader we elected under whose watch all those contracts were negotiated has been gone for more than a year. We even named a new Public Works building in his honor. We’re the ones that look stupid, not him.

It’s the choices we make in the future that will make a difference, not the ones we made in past. But who’s going to step up to make the “tough decisions” that Mr. Costello warned us about. It’s not the professionals’ jobs to do that. They just give us the facts. Our elected leaders decide what to do with them.

Here’s my prediction. No one from the Council or the Administration will step up. Councilmen have learned that those who try the hardest get burned the most. If you try to even talk about the roots of a problem Council chambers will fill with union members, testimony of tearful tales will be touted if meaningful efficiencies are proposed, and Councilmen will be inundated by phone calls from those who don’t want their rice bowls even looked at too closely, let alone touched. Why will this happen? Because it works. The easiest thing to manipulate is peoples’ fears. Of course Councilmen are going to be persuaded that the public doesn’t want any changes in public safety. They’re the ones who show up. The rest of Ocean City is too busy, too tired, too old, or too scared to attend Council meetings. They suffer quietly, maybe show up on Election Day, hope for the best, and go home. After the election they are the easiest ones to ignore.

It’s been over a quarter of a century since “defined benefit” pension systems began to be replaced with “defined contribution” systems. Yet government employees are still on a different playing field than those in the private sector. They still contribute a fraction towards their own health care plans compared with the rest of us. Why? Is it because they work harder than you? Where in the private sector do you ever see anyone stand around to watch someone else work? Is it because their job is more dangerous? Tell that to a soldier serving in Iraq for much less money.

If there’s someone out there, either on Council or the Administration, who’s willing to sacrifice their popularity in order to make tough choices please step forward.

Jim Tweed

Another new State Agency, the Public Benefit Corporation, or Governor Jon’s Asset Monetization Plan

January 8, 2008

Dear Editor:

Well, after spending a year developing his so called “workable plan” Governor Jon S. Corzine has decided (after spending approximately $8,000,000. in studies) that what the taxpayers of the state need is another state agency. The new agency the Public Benefit Corporation (PBC) would be charged with paying off the existing debt and issuing new bonds that would be paid back by higher New Jersey Turnpike, Atlantic City Expressway and Garden State Parkway tolls.

The Governor hopes to raise $40 billion with his “fiscal restructuring” plan (formerly his Asset Monetization Plan). He has said he will accept less but one thing is for sure -- the motorist will pay more for many years to come.

Once the PBC is created he will then put the whole state for sale by selling naming rights, development rights on state properties and “air rights” to allow building above existing structures. This is truly giving away the store; without any plan to reduce overall spending.

This new debt which will be primarily used for unrelated projects (not the original intent of turnpike, expressway or parkway bonding) is poor public policy. What the Governor is proposing is not good for New Jersey; Senator Leonard Lance has said “What he is doing is borrowing to pay down borrowing and then continuing to borrow.” Not a good idea. The service on the debt he will incur will be over $1 billion annually for at least 50 years.

The Governor said “the state needs dramatic changes in the ways it raises and spends money.” Absolutely correct, the problem is he continues to raise money and fails to dramatically curtail spending. A plan destined for disaster.

In the meantime his Wall Street friends will stand to reap a bonanza with the sale of the new PBC bonds and the residents of New Jersey will be saddled with new and enormous debt that is backed by the State of New Jersey.

It appears that the Governor’s plan will be the largest public bond issue ever. It is interesting to note that recently the Governor said his plan “would be backed by reliable revenue—highway tolls.” He also said, “....a new state agency is needed partly to assure investors they’ll get their money back.” One has to wonder where the Governor has been these last few years when he makes such statements. The Turnpike, Expressway and the Parkway have an excellent record on their bonds. So why does he have such concern for the future with his new PBC bondholders?

The only thing the Governor is doing with his so called plan is exchanging existing Turnpike, Expressway and Parkway bonds for new and massive long term debt. He is creating a new agency where he will be in a position to place more of his political friends; all at the expense of the citizens, taxpayers and users of the toll roads. Prudent fiscal policy would be to reduce the number of state agencies—not creating new ones.

In December 2007 the Governor said “I actually think, from what I understand of the market-place’s evaluation of infrastructure-financed projects, that there is no serious worry or even negative aura surrounding those kinds of debt instruments.” Well, Governor as chairman of Goldman Sachs you must have been in an “ivory tower” insulated from the real world. Transportation bond issues have been part of New Jersey since 1951 with the building of the original turnpike. Bonds have been guaranteed by the Turnpike, Expressway and Parkway and further they have been backed by the strength of the State of New Jersey.

Once the Governor’s “fiscal restructuring” plan is adopted he then will call for a constitutional amendment requiring most borrowing by the state to be approved by the voters. That is like saying “the horse is out of the barn, so now we will close the barn door.”

Incidentally, counties, cities and towns for years have used “anticipation notes” and then bonding on all types of projects such as: airports, roads, schools, utility authorities etc. What makes your idea so unique Governor? All you are doing is refinancing and pushing the hard decisions well into the future.

Governor, you really have given New Jersey only additional debt; you have done nothing to reduce over all current debt, number of employees, wages, pensions and excessive health programs.

To straighten out the terrible debt the state finds itself in refinancing is not the answer. Instead of creating another agency further adding to the bloated woes of the state; you should “begin with little things”—like reducing costs through deeper spending cuts, a hiring freeze and not depleting the Transportation Trust Fund by using it for operational spending instead of construction..

A recent Star Ledger article by Paul Mulshine referred to the classic work “The Confessions” by Saint Augustine bishop of the North African city of Hippo Regius wherein Augustine asks the Lord to “Grant me chastity and continence, but not yet.” That in a nutshell is how Governor Jon Corzine plans to curb Trenton’s lust for borrowing money. But not yet, maybe tomorrow?

Very truly yours,

Louis C. Ripa, J.D., B.S.C.E.

Jupiter, FL and Ocean City, NJ