Tuesday, December 27, 2016

Connecticut's Crisis Continues OR How America's Richest State Became a Failed State


When Phil Murphy is asked how he will deal with New Jersey's enormous debts, pay for his agenda, and even stabilize property taxes, his answer is a vague "you prioritize" and then a statement that New Jersey can fund its needs by growing the economy.  Murphy's argument is that his platform of increased taxes on the rich, increased investment, STEM-focused education, a $15 / hour minimum wage, and a state-owned bank is what New Jersey needs to get its economy moving again.

Here's an example:

Question: What's he going to do about our sky-high property taxes?
Answer: "There's no signing ceremony on the deck of the battleship to solve this," Murphy said. "But the biggest step we can take is to grow our economy. If we can grow the economy aggressively, we can get our revenues the right way," and property taxes start to "melt away," at least, a bit.
In the same interview, Murphy said economic growth (and cutting hedge fund investments) would fully fund the pensions:

How to fund such payments? Murphy said a combination of economic growth and reassessing whether the hefty fees New Jersey pays hedge funds to manage its retirement funds will be the solution.

Murphy always says "I'm an optimist," and points to Jerry Brown in California as a beacon of fiscal turnaround:

Jerry Brown inherited a state five years ago with a $25 billion deficit; this year? And $8 billion surplus.  It can be done. 
A Democratic governor. Progressive values. Can get a state turned around.

But I am extremely doubtful that Phil Murphy (or any of the Republican candidates either) can turn
New Jersey's economy around.  Even a president's control over the national economy is very limited and a governor's is more limited still.

Although Chris Christie's economic-budgetary management has been very bad, the fact that Connecticut has continued to flounder under a Democratic governor with progressive policies makes me skeptical that Phil Murphy can produce a genuine "Jersey Comeback" either.

Connecticut is Our Peer

Like New Jersey, Connecticut has very high average income and one of the country's most uneven distributions of wealth. Compared to a national average of "only" $389,436 per year to be in the top 1%, in Connecticut you would need $659,979 per year; in New Jersey you would need $547,737 per year. . In both New Jersey and Connecticut the top 1% captured all of the income gains in the rebound from the Great Recession from 2009-2013.

Neither Connecticut nor New Jersey has a large, dynamic city, but both have populous suburban belts where towns range from incredibly wealthy to indistinguishable from decayed industrial cities.  Both New Jersey and Connecticut are in the orbit of New York City and are affected by New York's successes and failures.  Both Connecticut and New Jersey have very high spending and very high performing public schools.  State school aid is very progressively distributed as well -- each state gives the majority of its state school aid to just 30 districts.  Each state has one ultra-prestigious Ivy League university.

Like New Jersey, Connecticut is extremely indebted.  Mercatus lists Connecticut as the country's most fiscally distressed state:

On the basis of its fiscal solvency in five separate categories, Connecticut ranks 50th among the US states and Puerto Rico for its fiscal health. Connecticut’s fiscal position is poor across all categories. With between only 0.46 and 1.19 times the cash needed to cover short-term liabilities, Connecticut’s revenues matched only 94 percent of expenses, producing a deficit of $505 per capita. The state is heavily reliant on debt to finance its spending. With a negative net asset ratio of −0.88 and liabilities exceeding assets by 34 percent, per capita debt is $9,077. Total debt is $20.88 billion. Unfunded pensions are $83.31 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) are $19.53 billion. Total liabilities are equal to 53 percent of total state personal income.

 According to Pew, Connecticut's debts equal 30.2% of personal income, whereas New Jersey's debts are 31.2% of personal income.  According to Pew, of states in the Lower 48, only Illinois is more indebted.


Like New Jersey, Connecticut has a highly-progressive income tax structure to go along with that extremely unequal distribution of wealth. The consequence of these facts is that Connecticut and New Jersey are highly dependent on a few hundred ultra-wealthy people to finance their state governments.   In New Jersey, 0.5% of the population pays a third of state income taxes, or 400 families pay $1.4 billion. In Connecticut, in 2011, the top 357 households accounted for 11.7 percent of the state's income tax.

Due to this reliance on the ultra-wealthy for tax revenue, when the ultra-wealthy have any dip in income, each state's revenues crash.  Whereas the national average for state revenue loss during the Great Recession was only 12.9%, Connecticut's revenues fell by 19.8% and New Jersey's revenues fell by 18.9%.

I'm not saying that it is morally wrong to tax the super-rich at high rates, but the dependence on high-earners exposes a state to higher volatility than a state that is less income-tax dependent or does not have a progressive income tax structure.

Yet, Connecticut and New Jersey have a major difference in that Connecticut's governor, Dannel Malloy, is a progressive whereas our Chris Christie is a conservative.  

Chris Christie refused to renew NJ's high-income tax surcharge in 2010, but Dannel Malloy has increased taxes twice.  In 2011 Malloy increased taxes by $1.5 billion on dozens of items and in 2015 Malloy increased taxes by another $1.5 billion.  The 2011 tax increase affected the middle class and made Malloy the country's most unpopular Democratic governor. The 2015 tax increases contributed to GE's decision to leave Connecticut for Boston.

Other major progressive victories in Connecticut that have no equivalent in NJ are Malloy's increase Connecticut's minimum wage to $10.10 and his $100 billion, 30 year infrastructure plan.  Malloy has implemented mandatory paid sick leave.

Other than not creating a state-owned bank and not wanting to legalize marijuana, Malloy's agenda for Connecticut is extremely similar to what Phil Murphy says he wants to do for New Jersey.

Well Murphy-backers, so with all that money to pay down debt, that higher minimum wage, new "investment" Connecticut is doing well, right?

NO.

Whereas New Jersey has slowly (and barely) recovered the number of jobs it lost in the Great Recession, Connecticut has only recovered 72% of the jobs it lost in the Recession.


As bad as New Jersey's economic "recovery" is, Connecticut's "recovery" is significantly worse.
The job market in Connecticut is struggling, with more jobs cut than created for three consecutive months, and just 5,000 jobs created over nine months....
According to the Connecticut Department of Labor report released Thursday, government layoffs and private sector layoffs both hit hard in September. State government employment fell by 2,900 and private sector employment fell by 2,700. First-time filers for unemployment claims in September increased by nearly 4 percent compared to August, and were up more than 8 percent compared to a year ago. 
By contrast, national first-time claims for the last half of September and the first two weeks of October were the lowest in 42 years. 
Pete Gioia, vice president and economist at the Connecticut Business and Industry Association, said, "You can't look at a report like this and not feel some sadness." 
In comparison, he said, Massachusetts has not only gained back all the jobs it lost during the recession, but it's added twice again that many in recent years. It recovered all the lost jobs by September 2012. Connecticut has 28,300 fewer jobs now than it did in February 2008. 
"Probably the biggest anecdote I've got from this was when we went around to our board of directors in September," Gioia said. The board of directors is heavy on mid-sized local manufacturers, but also includes international giants like United Technologies, Travelers, Boehringer Ingelheim and PricewaterhouseCoopers. 
"Company after company company was doing OK," Gioia said. "But they're all saying, 'We're growing in Massachusetts, we're growing globally, but we're pretty flat in Connecticut.' They were doing better elsewhere than they were in Connecticut. 
"They just don't see the activity and they don't see the imperative to invest when they see better opportunities to invest elsewhere." 

Even Stamford is "suffering," with a 30% office vacancy rate!

Malloy's two tax increases have pushed Connecticut's revenue (barely) above its pre-Recession peak, but Connecticut's revenues peaked in the winter of 2014, despite the 2015 tax increase.

States that have cut taxes dramatically, like Wisconsin and even Kansas, have had better revenue performances than Connecticut.

Source: Pew Fiscal 50
http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind0

Due to revenue coming in lower than expected, Connecticut finished FY2017 in deficit and had to use its emergency funds to cover that deficit.

Now, for FY2018 things are looking worse, as Connecticut faces yet another $1.5 billion deficit.

Aside from its stagnant economy, Connecticut's deficit is due to declining incomes of Connecticut's superrich.
[Legislative budget chief Neil Ayers] noted that the state's top 50 individual taxpayers had $2.9 billion less in combined income in 2015 – meaning that they earned an average of $60 million less per tax filer. As a result, they paid $217 million less in state taxes – helping to cause the deficit. 
"Fifty people represented almost a quarter of the problem," Ayers said, referring to the size of the previous deficit.
It also appears that Connecticut is losing its ultra-rich to other states, just as New Jersey has lost David Tepper and Leon Cooperman. Former Connecticut billionaires Edward Lampert, Thalius Hechsher, Thomas Peterffy, and C. Dean Metropoulos all moved to Florida, the latter two were worth over $10 billion each.

"I know for a fact that it's about taxes and it's about the state of the fiscal house in Connecticut," [State Senator Scott] Frantz said, referring to the unfunded pension liability. 
Peterffy, who made headlines in 2012 by personally funding political ads for Republicans, told Greenwich First Selectman Peter Tesei in late 2014 that he "had pretty much given up on the state of Connecticut," Tesei said Wednesday. 
"He was holding out that there would perhaps be a change in direction, and when that didn't materialize, he took the position that he was out of here," Tesei said. 
Six months after that conversation, Connecticut's tax on the highest earners rose from 6.7 percent to 6.99 percent, up from 4.5 percent just a few years ago. Florida has no income tax, and more importantly, Connecticut taxes estates when wealth transfers between generations; Florida does not.

"Mother Aetna" Almost Out the Door

GE left Connecticut in 2015 and now Aetna has one foot out the door.

Aetna's CEO refuses to promise to stay in Hartford and Aetna has continued its long-term trend of reducing Connecticut employment.  Since 2012, Aetna has reduced Connecticut staffing from 6,700 to 6,000, during a time it expanded its staffing nationally.  During the period when Aetna's merger with Humana looked likely, Aetna's CEO spoke very favorably of Louisville, Kentucky (where Humana was headquartered) and said that all its government-related work would be done in Louisville.

It's Not All Dan Malloy's Fault, But Connecticut is Getting Worse

I'm not trying to say that Connecticut's intractable problems are all Dan Malloy's fault.  It is not Malloy's fault that CT put virtually nothing into its pension funds from the 1930s-1980s and Connecticut's job growth has been very poor for decades too.

It isn't Malloy's fault that Connecticut is so dependent on hedge fund millionaires for tax revenue either.

Malloy is also doing more to face up to Connecticut's debt crisis than Chris Christie is.  If Christie were willing to actually balance New Jersey's books, we would need to be taxing more/spending less to a tune of $4 billion a year.

But Malloy's progressive policies haven't ignited growth either and Malloy has resisted pension reform.

But this brings me back to Phil Murphy.

Phil Murphy cannot even fund NJ's pensions with a "Millionaire's Tax" (which would bring in $600 million per year) and a marijuana excise tax ($300 million per year), let alone the rest of his agenda. Given the intractable budgetary-economic crisis in Connecticut, I fail to see any reason why anyone in New Jersey would be optimistic about New Jersey under very similar policies.  Murphy's beacon is California, but New Jersey and California are nothing alike.  New Jersey and Connecticut are quite alike.

There are, of course, parts of New Jersey that are doing very well, eg, Hudson County and train-line suburbs such as South Orange-Maplewood, Millburn, Summit, Montclair, and Madison.  Ironically, Phil Murphy's vision of public-transit centered-growth, seems like it would (unintentionally), if anything, further benefit the "haves" of the NJ economy.

And the likelihood that New Jersey will be in for another four years of budgetary pain underscores the need to think pragmatically about state aid (which Murphy does not do), and how we need to have achievable funding targets for high-FRL (i.e., Abbott) districts, and the need to redistribute state aid.



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Update: Paul Tudor Jones also took his hedge fund out of CT to Florida.

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See Also:
And:  "Connecticut and New Jersey: Rich States, Poor Economies"


Tuesday, December 13, 2016

Education Spending and NJ Taxes

If you are a glutton for pain, the following is just how insane NJ property taxes actually are.

Source:
http://www.thefiscaltimes.com/2015/08/14/10-Worst-States-Property-Taxes
Our taxes are even more extreme if you look at absolute dollars paid per household and not tax rate.

Source: https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/
(These data are out of date.)  

Why are our taxes so high?

It's the (School) Spending!

NJ's municipal and county spending are high too, but education taxes are greater than municipal and county government combined, so when it comes to NJ's tax levels, school spending cannot be ignored.

These data are more recent than the state-by-state comparisons used above, hence
the higher median property tax bill.


What's rarely definitively discussed in the same context of NJ's excessive taxes is that our education spending is among the country's highest, with only New York State and Alaska outspending us.

Highest Spending States, 2013-14

  1. New York, $20,610 per student
  2. Alaska, $18,416 per student
  3. New Jersey, $17,907 per student
  4. Connecticut, $17,745 per student
  5. Vermont, $16,988 per student
  6. Wyoming, $15,797 per student
  7. Massachusetts, $15,087 per student
  8. Rhode Island, $14,767 per student
  9. New Hampshire, $14,335 per student
  10. Maryland, $14,003 per student
  11. Pennsylvania, $13,961 per student
NJ's exceptionally high spending is even more of a factor in our tax burden when you consider that our peer states in spendding have a higher percentage of school money deriving from non-residential taxpayers.

Alaska has oil revenue and New York State gets $6 billion per year in income taxes paid by commuters who work in New York State but live elsewhere, usually New Jersey.  New Jersey has no equivalent outside source of revenue.

Alaska, Vermont, Wyoming, Rhode Island, and New Hampshire are all small states that receive much larger amounts of federal education aid per student than New Jersey due to the Small-State Minimum in federal aid formulas.

If New Jersey spent as much on K-12 education per pupil as
other high-wealth states, our taxes would be substantially lower.

  • If New Jersey spent as much as Connecticut per student we would $221,839,398 less.
  • If New Jersey spent as much as Massachusetts per student we would spend $3,861,648,780 less.
  • If New Jersey spent as much as Maryland per student we would spend $5,346,055,616 less.
  • If New Jersey spent as much as Pennsylvania per student we would spend $5,403,569,534 less.
(Since NJ had 1,369,379 public school students in 2013, I just multiplied the difference in per pupil spending by 1,369,379.)

It's simple but it's ignored:


New Jersey's Taxes are High Because We Spend A Lot. 
Mostly on Schools.  

Some accounts that recognize that NJ's taxes are high because our spending is high attribute the spending to the seemingly large number of school districts and municipalities in New Jersey, implying that if it weren't for so many districts, Boards of Education, and superintendents our spending and taxes would be normal.

For instance, this NJSpotlight piece titled "Why Property Taxes are So High" by Collean O'Dea blamed the multiplicity of school districts and said that the balance of local funding/state funding for schools was the problem:

Why are taxes so high?
New Jersey relies heavily on the property tax to fund local governments and schools. The tax pays for municipal services -- police, roads and the like. It pays for local and, sometimes, regional public schools. And it pays for county government -- roads, parks, elections and more. Depending on the municipality, there may also be open space, library or fire service taxes. 
Last year, local governments levied more than $27 billion in local property taxes. The bill is so high, in part, because New Jersey is a high-cost state. 
The state has 565 separate municipalities and even more school districts, nearly all of them led by their own administrators and support staff – who are often doing similar jobs in very close proximity. Officials say state mandates add to municipal costs, as well. 
At the same time, exclusive of federal aid, the amount of assistance the state gave to municipalities to defray their expenses represented just 15 percent of total spending,. What’s more, only about one-third of school spending is covered by state aid.
The New Jersey Policy Perspective recently said that NJ's municipal fragmentation caused NJ's high taxes.
There are many explanations for New Jersey’s historically high property taxes such as its population density, the excessive number of municipalities and school districts and its traditions of local control. 
Although I agree that there is some explanatory power in NJ's municipal fragmentation, this frequently-made argument that New Jersey's multiplicity of governmental units causes us to have high taxes is demolished in this Rutgers University Report "Size May Not be the Issue."

First, on a per capita basis, New Jersey is just average for governmental units.
Asking the question about having too many governments from a different perspective may yield an entirely different conclusion. How many “general governments” does New Jersey have on a per capita basis? The answer is: surprisingly few. In fact, New Jersey ranks 34th in the number of general governments per capita. When all “special districts” (fire, water, sewer, and so on) are also considered,New Jersey ranks 36th of the 50 states.
Second, on the NJ municipal level at least, there is no correlation between the size of a locality and its per resident spending.  On the municipal level, the lowest spending towns are actually ones with 3,601- 5,150 residents.
Source: http://assets.njspotlight.com/assets/14/1116/2244, page 25
Note: Jersey Shore resort communities are excluded.
If having fewer and larger localities led to economies of scale, then New Jersey's largest municipalities would have low taxes, but New Jersey's largest townsdo not have low taxes.

Most of NJ's largest towns are low-income cities where high spending is to be expected, but if you only look at more middle-class suburbs, it's clear that size isn't leading to economies of scale.

New Jersey's average equalized all-in tax rate for 2016 is 2.333, but
  • Woodbridge's tax rate is 2.685.  
  • Edison's is 2.193.  
  • Clifton's is 2.984.  
  • Lakewood's is 2.109.  
  • Hamilton's is 2.643.  
  • Cherry Hill's tax rate is 3.384.  
  • Brick, whose schools are overaided and where school spending is below-average, is 2.022.  
Of NJ's largest non-urban towns, only Toms River has significantly below-average taxes, but Toms River's rate is still 1.846, which still very high by US standards.

Yet Toms River is the exception the proves the rule of school spending being central to our high taxes, since Toms River only spends $15,587 per student  (counting pensions + FICA), which is about $3,500 per student below NJ's average.  Toms River's school taxes are only 76% of Local Fair Share.

Nor is it true that NJ's educiiton spending is merely proportion to our income.  NJ's education spending as a percentage of GDP was 4.76% in 2014-15, the second highest in the US.

General Administrative Spending in NJ is 2% of Spending

The theory is that NJ's (seemingly) large number of school districts leading to high taxes is that having a small number of districts leads to inefficient central office administration.

Insofar as New Jersey might have more administrators than states with fewer and larger districts, this theory fails to account for very much of NJ's exceptional tax burden since "General Administration" is only 2% in NJ of district spending.

The US government actually keeps track of administrative spending and the additional spending in New Jersey in the Administration category is not that high.

NJ's administrative spending per student was $367 for general administration in 2013-14.  The national average for general administration was $210.

So NJ is only $157 per student above the national average.  Yet our taxes are more than $5,000 per household above the national average and literally double the national average in terms of tax rate.

If you compare New Jersey's average district spending to national numbers, it's obvious that New Jersey school districts spend more on every category, including the categories that are independent of district size, like "Instructional Salaries" and "Instructional Benefits," ie, "teachers."

Source:
http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html

Given how low Maryland's administrative spending is ($125 per student), I think there is some truth to the "too many districts, too many administrators" theory, but it is a minor cause of NJ's tax burden.

Not every explanatory article about NJ's obscene property taxes is as bad as that NJSpotlight piece or the New Jersey Policy Perspective's claim.

This piece from the Asbury Park Press, titled "Why are our taxes so high?," has a lot of invaluable information and gets the cause of the property tax crisis partly right, but even it misses the centrality of education spending in NJ's outsize tax burden:

It's no secret that New Jersey is a high-tax state. But few stop to think about the precise reasons why, other than the vague and altogether accurate notion that public employee salaries and benefits are too generous, and that there are too many government workers collecting them. Or that there are two many towns and school districts. Or that the high cost of living here explains why government is so costly....
On the revenue side, the problem lies less with layers of government and excessive numbers of government workers providing services than with the generous salaries and benefits of those who are on the public payroll. Average state worker salaries: highest in the nation. Average teacher salaries: third highest. Public employee health benefit costs: second highest in the nation. 
Yes, the cost of living in New Jersey is high. That is necessarily reflected in public employee salaries and benefits. But New Jersey, which ranks first or second in so many tax and spending categories, has the fourth-highest cost of living in the U.S., behind New York, Hawaii and Alaska. Other states with far lower tax burdens have similarly high costs of living.
Although it's worth pointing out where there exists inefficiency and superfluousness in municipal and county spending (like police officers making $200,000), the fact is that over half of New Jersey's property tax levy - $14.5 billion out of $27.7 billion - is for schools, so inefficiency and superflousness in schools is really what drives New Jersey's extraordinary property taxes.

The Income Tax Reallocation Distraction

Another theory I often see that avoids discussion of spending is that NJ's property taxes are so high because income taxes are too low.  This notion then becomes the premise for an argument for reallocating taxation, where income taxes would rise and offset property taxes.

Indeed, there are some seemingly cogent arguments for this.

The property tax in New Jersey brings in twice as much revenue as the income tax, so mathematically, reallocation would lower property taxes in the short term. While New Jersey's top bracket, 8.97% on income above $1 million, is the fifth highest in the US for 2017, on low-income earners, NJ rates are low and on middle-income earners NJ rates are only average.

(CA, OR, MN, and IA now have higher top brackets than NJ. Maine was going to have a higher to have a higher bracket through "Question 2," but that was repealed by the legislature and Maine's top bracket is lower than NJ's.)

The problem with this approach is that it isn't a net help for New Jerseyans if they exchange the country's highest property taxes for the country's highest income taxes.  If just half of the $27.7 billion in property taxes were shifted to income taxes, New Jersey's income tax levy would literally double (in FY2016 NJ's income tax brought in $13.8 billion).

If all-in taxes were to drop for middle-income and lower-income New Jerseyans, more money would have to come from the wealthy.

This is an idea I support, but raising the $1,000,000 bracket from 8.97% to 10.75% would only bring in $615 million.  Raising taxes on incomes above $500,000 per year to 10.25% would bring in $155 million.

Combining the two upper-income tax increases would bring in $770 million, which is only 2.7% of NJ's $27.7 billion property tax bill.

Could New Jersey increase taxes exceed 10.75% for $1 million+ incomes in order to produce real property tax relief?  In theory yes, but if the top rate were increased by only 50%, NJ's top bracket would exceed California's 13.3%.  If NJ's top rate were increased by only 10%, we would have the country's third highest top rate.

More importantly, our top rate would easily exceed New York State's 8.82%, Connecticut's 6.99%, and Pennsylvania's 3.07%.  The combined New York State+New York City top bracket is 12.4%, also within reach if NJ attempted a massive property tax/income tax reallocation.

I don't feel sorry for the rich, but the departure of only a small percentage of ultra-high-income individuals is a permanent fiscal risk for New Jersey since the ultra-rich pay so much in NJ income taxes:

One half of one percent of New Jersey taxpayers account for almost a third of income tax revenues, and only 600 filers - many of whom may already have second homes outside of New Jersey - account for about $1.4 billion in income tax payments.
The New Jersey Policy Perspective often points out that despite NJ's income taxes already being very high, the number of high-income filers in New Jersey constantly increases, so, they argue, NJ should not base policy on fears of outmigration.

Ok, point taken, but the New Jersey Policy Perspective does not attempt to evaluate the counterfactual; ie, what New Jersey's population of millionaires would be if our taxes were more moderate.

Also, although NJ's number of high-income filers may constantly increase, New Jersey's top-bracket is barely higher than New York State's.  If the NJ top-bracket were to become substantially higher than New York State's, the constant growth of the millionaire population may slow down or reverse.

Finally, there are two practical problems with relying on income taxes:
  • income tax collections are volatile.
  • income taxes can be evaded and avoided more easily than property taxes.
Tax Reform in New Jersey Can't Ignore the Spending Side

School district/municipal consolidation and shifting more taxation to income taxes are good things on their own merits, but these approaches neglect the real cause of NJ's tax crisis, which is our extraordinarily high spending, particularly on education.

Over the years, NJ has repeatedly tried to supplant property taxes with income tax-derived state aid , but most state aid has always gone to poor towns & districts - leaving the non-poor without much state support. Indeed, the state's attempt to give income tax money to middle-class and affluent districts was ruled unconstitutional by the NJ Supreme Court in 1990 in Abbott II as "counterequalizing."

Not all explanations for why NJ has such high taxes are as bad as the ones that kick off my blog post.

Andrew Sidamon-Eristoff eruditely pins the causation where it belongs here:

At the risk of gross oversimplification, the sum and substance is this: Given New Jersey’s relatively high state and local spending (the latest census figures) suggest that New Jersey’s state and local unit direct spending is approximately 11 percent higher than the national average), the limited revenue-generating capacity of our income tax base, the relative lack of federal revenue supporting local spending, and the fact that fiscal redistribution will always be a higher legal if not political priority, it is highly unlikely that New Jersey’s state government will ever have the discretionary fiscal capacity to meet the rising cost of education and local government, let alone offset the related heavy reliance on property taxes, on anything other than a temporary and unsustainable basis. 
Why does this matter? The systemic overselling of “property tax relief” distorts the public policy debate. We dissipate too much of our political energy arguing over funding levels for local aid and popular direct-benefit programs that have no real impact on property taxes as such, leaving our long-suffering taxpaying public disillusioned and cynical. After decades of hackneyed bipartisan dogma, perhaps it’s time to focus on the only thing that will actually make a real difference to property taxes over time: controlling the cost of education and local government in New Jersey.

This post of mine has clearly targeted spending itself - chiefly for education - as the cause of NJ's extraordinary tax burden, but, IT'S OUR OWN FAULT.

If New Jerseyans really wanted lower taxes, they would vote in anti-tax politicians, but New Jerseyans almost never do this, hence Democratic domination of the legislature.

If the majority of New Jerseyans wanted lower taxes, they would vote for politicians who want that too.

New Jersey is a democracy and at a certain point the voters themselves are accountable.


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Update, New Jersey's school spending is also the second highest in the United States as a percentage of state GDP:

Source: Education Law Center/Rutgers Graduate School of Education
https://drive.google.com/file/d/0BxtYmwryVI00VDhjRGlDOUh3VE0/view

Wednesday, November 23, 2016

Phil Murphy Speaks About State Aid and Says Nothing

Phil Murphy just gave a speech at the New Jersey Education Association's annual conference at which he came down on several major issues in state education, such as his plans to eliminate the PARCC, implement a moratorium on new charters, veto any renewal of Chapter 78, and to fully fund the pension system without any changes to employee and retiree health care. 

The key moment of Murphy's paean to the NJEA was
As my mother would say, you are known by the company you keep, and I’m keeping really good company right now … It means a lot to me to be on the same team as NJEA.
Phil Murphy with his "team," the NJEA Leadership
Same team as the NJEA?  Did Murphy seriously say that with a straight face? does he realize his own kids go to the Rumson Country Day School and Phillips Andover, which have no union representation whatsoever?

Anyway, Murphy expressed his allegiance to the NJEA very clearly, but when it came to state aid, Murphy spoke without saying anything.

On school funding 
There is one (school-funding) formula that has been blessed by the state Supreme Court, and that’s where I’d go back to start. I know it needs to be tweaked and updated, but I’d go back to that. This governor has underfunded that formula to the tune of about $8 billion in his seven years in power, and whether by coincidence or by design, that is about the same amount of money he has put out in tax incentives to come or to keep them … He has clearly put corporations and their tax rates ahead of kids and their education. We need to turn that back on its head.
"TWEAKS"?  How can a system that allows 52 districts to get over 200% of their recommended aid while 141 get 50% or less just be in need of a "tweak"?

It needs a total upheaval.  

What "tweaks" and updates does Murphy think need to be made?
  • Does he want to make the NJEA's preferred "tweak," which is having the state pay for charter students and cutting district transfers to charter schools? 
  • Does Murphy agree with Abbott extremists like the Education Law Center and Bruce Baker, who believed that SFRA's weights for high-FRL districts were too low?
  • Does Murphy agree with Vincent Prieto and some special education activists, who want the state to fund special education based on the number of special education students a district claims? 
  • Does Murphy agree with Steve Sweeney, Jack Ciattarelli, the NJ Senate, the superintendents and support redistributing Adjustment Aid?
  • Does he agree with Jack Ciattarelli and Steve Sweeney on the need to end how tax abatements distort state aid?  
We have no idea.  Murphy is speaking without saying anything. As usual, he doesn't even use the term "SFRA."

Murphy's statement echoes Vincent Prieto's equally vacuous statements on state aid, where he emphasizes that the current school funding law has the Supreme Court's "blessing."

Why New Jersey Has No Choice on Tax Incentives

So we have no clue about how Murphy wants to "tweak" state aid, but Murphy, echoing the NJEA itself, does suggest something of a funding source - the elimination of tax incentives.
Goldman Sachs Put Itself Before NJ
Schoolchildren and Took $160
Million in Tax Credits from NJ
Alone. It has taken hundreds of
millions more from other
states.

Murphy's rhetoric that Christie has "put corporations and their tax rates ahead of kids and their education" is powerful, but it is a highly mendacious promise since, as governor, Murphy will not be able to eliminate tax incentives.

First, as I've written before, New Jersey's tax subsidies are often urban- and transit-specific, so ceasing tax incentives means redevelopment in Paterson, Trenton, Camden, and Newark would cease.  Eliminating tax incentives is

"GOVERNOR TO NEWARK REDEVELOPMENT:
DROP DEAD."

Second, the reason it is necessary for New Jersey to offer tax incentives is because states are at war with each other for jobs right now and their weapon is tax incentives.

New Jersey in particular has to offer tax subsidies because our tax rates, overall, are the country's highest.

New Jersey has poached businesses from other states (mostly New York) and other states have poached businesses from us. Hertz' departure from New Jersey to Florida was facilitated by $84 million in incentives. Sealed-Air's move to North Carolina was facilitated by $36 million in tax incentives.  Georgia got Mercedes for cheap -- only $23 million.

In all of these cases the savings aren't just taxes, but overall costs of employment. Mercedes will save 10% - 20% a year in Georgia on non-tax costs.

Businesses (especially in services) are mobile and, either through the necessity to compete against businesses in low-tax states or else their CEO's ideological preference for low taxes, they can and do migrate to or expand in low-tax environments.  The tendency to move or expand in low-tax environments exists in businesses that purport to be enlightened and not just about their profitability. Tesla opened its "Gigafactory" in Nevada because it got $1.3 billion in subsidies.   Apple took $1 billion to build a data server farm in North Carolina. The New York Times is quite a liberal paper, but it took $29 million in tax breaks for its Midtown headquarters.

Elon Musk, interestingly, said that the $1.3 billion Tesla got for its "Gigaplex" didn't really matter so much as it fulfilled an emotional need, ie "Nevada cared."

First of all, it is important to point out Nevada is not paying for [the Tesla Gigaplex]. The $1.3 billion or so which is the maximum tax incentive that Tesla could get over 20 years, so an average of, like, maybe, $50 or $60 million a year, is a tiny fraction of what this factory’s output will be. So at the 50 gigawatt level this is like a $5 billion a year factory output. We think it will probably be at least two, probably three times that number. So that’s like $15 billion a year. You compare that to the tax incentive of $50 million, it is point-three, point-four percent. It doesn’t move the, I mean, it was important that Nevada offer that package just to show that they cared. It doesn’t move the needle on economics. I hope people understand that. I try to belabor this point ad nauseum because some of the articles that have been written give the impression that Tesla got this $1.3 billion check from Nevada. No, what we got was a concession that sales and use tax on equipment in the building, we are not going to be charged that for some period of time. So, it is really a very tiny affect on the economics of the factory. But if the state didn’t do what it could then does the state really care? So that package was more about Nevada showing that they cared about Tesla being here than anything else.

IF New Jersey didn't have a system of corporate tax breaks more businesses would leave New Jersey or not locate here in the first place and the Treasury wouldn't have any net gain.

So when a business threatens to leave, the Treasury is screwed either way:
  1. Either the state offers the tax incentive OR
  2. It watches the business leave and take all its taxes and employee spending power with it.
Yes, there are some NJ businesses that are bluffing about relocation/expansion elsewhere and would stay in New Jersey or expand in New Jersey even if they didn't get tax credits, but not all businesses that threaten to leave/expand elsewhere are bluffing.  The expansion of tax incentives in New Jersey since 2013 (when the law was rewritten) was a result of a free-for-all of tax incentives in other states.  (compare how low NJ subsidies were to NY & PA in 2012.)

Even America's Most Profitable Businesses Want Low Taxes

GS has kept expenses low by putting
employees in low cost, low tax locations.
Source:
http://bit.ly/2isMZ3n
The need to be in a low-tax environment is most obvious if a business has a low profit-margin, but even America's most profitable businesses - such as finance giants like JP Morgan and Goldman Sachs - make decisions on taxes.

I bring Goldman Sachs up not to say that Murphy is a hypocrite, but to show that even if Goldman Sachs, whose annual profits are now $7 BILLION, goes where it is offered tax incentives, just imagine the pressure on low-profit and medium-profit businesses are under.

Goldman Sachs is one of the country's most notorious exploiters of tax subsidies and loopholes, taking $593 million from New York and New Jersey alone.

Maybe Phil Murphy, as a Goldman Sachs insider, thinks that even if Goldman Sachs hadn't received at least $164 million in state and local tax subsidies it would have put employees in Jersey City anyway, but I wouldn't be so confident, since Goldman Sachs also has thousands of employees in Salt Lake City, Dallas, Warsaw, and Bangalore, India.  Despite its enormous profitability and need for highly educated workers, even Goldman Sachs makes decisions based partly on taxes and costs.  (even Goldman CEO Lloyd Blankfein brags about it.)

Goldman Sachs Loves Salt Lake City for the Mountains,
Workforce, and Tax Incentives


If Goldman doesn't care about state taxes, why did Goldman Sachs start expanding in Salt Lake City around 2007-2009, at a time when its Jersey City skyscraper was underused?

Certainly the high-quality, multilingual Utah workforce played a part and taxes that are already fairly low, but Goldman didn't move to Utah until it got Tax Incentives.

Goldman Sachs ranks as the second-biggest beneficiary behind Procter & Gamble Co of Utah's tax-break program, having inked a deal in 2009 to receive an estimated $47.3 million worth of rebates over 20 years. In exchange, the bank committed to investing $51 million in Utah, maintaining at least 1,065 employees and paying them at least 50 percent above the average Salt Lake County wage. [ed. GS now has 2,000 employees in SLC] 
The deal built upon a previous $20 million tax break deal Goldman received two years earlier under Herbert's predecessor, Jon Huntsman. 
Goldman agreed to the sweetened package after an entourage of Utah public officials -- including Gov. Herbert, Salt Lake City Mayor Ralph Becker and local business leaders -- came to the bank's headquarters in lower Manhattan to make a personal sales pitch to senior executives.
Goldman Sachs even is expanding in Salt Lake City while it cuts jobs elsewhere.

Goldman Sachs Group Inc has been quietly moving thousands of jobs from pricey places
like New York and London to cheaper cities like Salt Lake City in recent years, and executives said on Thursday those efforts are finally starting to show up in the bank's results.......
The bank added a net of 500 employees to its payroll of 32,900 in 2013, but it added many more than that to lower-cost cities and cut staffing in higher-cost cities, they said. Besides Salt Lake City, Goldman has also built staffing in cities like Dallas and Bangalore, India. 
"I've been covering this company for 10 years, and I can't remember the last time they were cutting compensation at this level," said Tom Jalics, a senior investment analyst at Key Private Bank, whose clients own Goldman shares. "They're really ratcheting them down."..
Ten years ago, Goldman had only a handful of employees in Salt Lake City. Now it has about 1,800 employees, with nine of the bank's 11 divisions represented there, in functions ranging from research and credit analysis to trade settlement and compliance.

HIGH VALUE OR LOW COST?
The migration of jobs to lower-cost centers has created some tension between employees in New York and Salt Lake City, who get paid different amounts for similar jobs and are often culturally at odds. 
New hires in Salt Lake City cost 30 percent less, on average, than employees in the same roles in New York, according to a consultant who has helped grow Goldman's Utah operation but was not authorized to talk to the press. A Goldman employee fresh out of college in Salt Lake City, for example, might earn about $45,754 a year, on average, while those in New York earn about $67,334, according to jobs website Glassdoor.com.

Sure, Utah has the "Mormon Factor," ie, a high-quality, sober, multilingual workforce, but Utah had to offer the tax breaks because Goldman Sachs still threatened to move somewhere else.

The inconvenient truth for progressives is that businesses do respond to tax rates and tax incentives.  If super-profitable Goldman Sachs moves to Utah because of tax subsidies, then lower-profit businesses face an even bigger pressure to relocate to low-tax states.  Democratic governors in the US, like Andrew Cuomo and Dannel Malloy, deploy tax incentives all the time because they know it's necessary to compete with other states.  New York State actually gives out $23.9 billion in tax incentives in 2015 alone.

Philosophically, corporate tax incentives are impossible to defend, but when every state has its own incentive program New Jersey cannot unilaterally stop giving tax incentives out.

So it's a lie of Murphy's that he is going to be able to fund schools with money saved by abandoning tax incentives.  Murphy will not be able to cut tax incentives unless he is willing to accelerate business departure and further inhibit business growth.

I doubt Murphy will make that tradeoff.  Even aside from how dependent Camden, Paterson, Newark etc are on tax incentives, I doubt even the Democrats would let him due to business-exodus and non-expansion fears.

In conclusion, Murphy continues to not show any understanding of how off-formula New Jersey is with state aid, with hundreds of districts overaided or underaided "with no rhyme or reason."  He shows no compassion for towns like Bayonne, Bound Brook, Freehold Boro, and Belleville who face the awful choice between taxing themselves into decline or letting their schools become badly underfunded.

Unlike Jack Ciattarelli and Mike Doherty, he shows no outrage at the fact that the children of investment bankers and lawyers in Jersey City and Hoboken get "free" PreK while the children of cashiers and landscapers in Dover and Bayonne get nothing.

This is a huge contrast to Assemblyman Jack Ciattarelli, who is extremely concerned with NJ's most underaided communities and kicked off his gubernatorial campaign at Manville High School.

Murphy talks about "fully funding" SFRA but presents a funding source that cannot be tapped.  It's like "scientist" claiming to power something with zero-point energy.

Yet again, Phil Murphy spoke on state aid, missed the real victims of the status quo, and said nothing.


----



See Also:

Wednesday, November 16, 2016

How would a $15 an Hour Minimum Wage Affect NJ Public Schools?



In the battle over New Jersey increasing its minimum wage from the current $8.38 an hour to $15 an hour, much has been said about the impact on businesses and whether or not a $15 an hour minimum would put New Jersey jobs at risk.

Yet, something I've yet to read anything about is how a $15 an hour minimum would affect government agencies in New Jersey, particularly public schools.

Schools have numerous employees making under $15 an hour, including cafeteria workers, crossing guards, bus aides, security personnel, substitute teachers, people in stipended positions, and even paraprofessionals.

Districts also make purchases from businesses that employ many people making less than $15 an hour, such as gasoline, school supplies, and food.   The health insurance that school districts pay for will become somewhat more expensive as well.

Districts have many additional workers who are making just over $15 an hour, but whose wages would have to be boosted if the wage floor were lifted to $15 through "wage compression."

I bemoan the absence of New Jersey-specific journalism on this, but the issue has been well-covered in New York State when New York considered a statewide $15 an hour law (the minimum wage was already $9.75 an hour).  New York State research shows that there are significant costs to school districts, with the consensus projection being that taxes would increase by 2.6%.

Since Gov. Cuomo first proposed raising the state's minimum wage to $15 per hour, a number of unintended consequences have been identified. 
Most of the discussion about the proposed minimum wage increase has focused on likely job loss. A 2015 study by the former head of the independent Congressional Budget Office found that a $15 minimum wage could cost the state at least 200,000 jobs -- with a disproportionate number of job losses Upstate. New York's farmers would be hit with $500 million in additional costs, meaning they will not be able to compete with products grown outside of the state. Struggling small businesses that drive the Upstate economy will have to contend with yet another state-imposed mandate. 
But there is one unintended consequence that has not received its due attention in this important discussion -- the resulting state and local tax increases necessary to pay for this massive wage mandate.
This article "Schools: Wage Hike Would Affect Thousands," from March 2016, about the difficulties districts in Upstate New York would face is relevant to New Jersey, since average spending in Upstate New York is $19,000-$25,000 per student, a range that is equal to or higher than what New Jersey districts spend.

School taxes would go up significantly and force many districts to present budgets exceeding the so-called property tax cap if state lawmakers approve a minimum wage increase to $15 an hour, according to leaders of various Monroe County school districts. 
Such a measure — pushed heavily by Gov. Andrew Cuomo as part of the state budget negotiations — would increase the minimum wage through several incremental steps upstate by July 2021, and much more quickly downstate. 
"What (Cuomo) doesn't understand is the domino effect of this type of decision," said Kimberle Ward, superintendent at Gates Chili Central School District. "Quite frankly, we can't go there. We would not be able to afford that and it would be a terrible burden on our taxpayers." 
The measure has been widely criticized because of fears of job cuts and price increases in the private sector. It has drawn opposition from farmers, business groups, nonprofits and Republicans in the state Senate vowing to block the increase in the state Legislature. 
School districts are concerned about how increased labor costs might force them to cut programs, jobs or both. School leaders started studying the issue after the $15 an hour wage was approved last year for fast food workers of large chain restaurants. 
Nearly 20 Monroe County school districts, in addition to Monroe No. 1 and Monroe No. 2 BOCES, said going to $15 an hour would affect roughly 6,050 workers at a cost of nearly $24.8 million. Clerical, custodial/maintenance personnel, food service workers, teacher aides/paraprofessionals, bus drivers and attendants and per diem substitutes would all be affected by the minimum wage increase. 
The Rochester School District's finance team conducted an analysis last fall, based on the staff counts and earnings during the 2014-15 school year, district spokesman Chip Partner said in an email. According to the study, the district had 1,114 employees, including part-time, substitute and student workers, that earned less than $15 per hour. 
The incremental cost of bringing those workers to $15 per hour in wages only would be $3.46 million. The cost jumps to $4.27 million when social security and retirement benefits are included. The total does not include employees whose current salary is at or near $15 per hour.
A survey of New York State School Business Administrators echoed the deep concerns over a $15 an hour minimum wage, saying it would increase taxes by 2.6%:

According to a recent report by the New York State Association of School Business Officials, the impact of a unilateral increase for workers within the state would have a large financial impact on school districts.

The association surveyed 307 school districts and 22 BOCES, finding the impact of a minimum wage increase to $15 per hour for the districts would be approximately $276 million. In turn, 33,422 employees would be affected. The average expense for school districts would be $283,463 and would cause an average tax levy increase of 2.6 percent. 
Many area school district leaders said a $15 minimum hourly wage across the board would be detrimental to the schools' budgets. Tim Mains, Jamestown Public Schools District superintendent, said the proposal could place the district in a difficult situation, depending on how it is implemented.

New York Didn't Go to $15

Andrew Cuomo gave up on a $15 an hour
statewide minimum wage after he realized what 

the costs would be.
The protests of upstate businesses, farm groups, and school districts carried weight. NYS's minimum wage law has built-in "off ramps" that allow the cancellation of minimum wage increases if employment drops and even if employment doesn't drop, New York State did NOT adopt a statewide $15 an hour minimum wage anyway.

By 2021, the only places in New York that are slated to have a $15 an hour minimum wage will be Long Island, New York City, and Westchester.  The rest of New York State is projected to be at $12.50 an hour.

Despite the fact that New York State did not adopt a statewide $15 an hour minimum wage, the NJ Democrats show no hesitation about a statewide $15 minimum and plan to ask voters to constitutionalize $15 an hour on the 2017 ballot, without any "off ramps" like New York State has.

Phil Murphy, shows no hesitation about $15 an hour.

A STRONGER MINIMUM WAGE
Phil Murphy supports raising the minimum wage to $15 per hour. Raising the minimum wage would benefit nearly one million workers, equal to one-quarter of all workers in our state. New Jersey’s current minimum wage is grossly inadequate. The current minimum wage of $8.38 per hour is roughly 50 percent below a “living wage” — the amount an individual in NJ needs to meet basic needs.
The Murphy campaign confidently concludes:
The argument that raising the minimum wage kills jobs is a myth that is simply not supported by evidence.
Murphy's claim that is contradicted by the highly-respected Congressional Budget Office, which estimated that even a $10.10 (national) minimum wage would reduce employment by 0.3%.

Politifact found many economists who would support $10.10 an hour, but very few who would support $15, calling it, at best, "terra incognita."

Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, said he’s willing to take the job-loss trade-off that might follow an increase to $10.10. "But $15 is too high," he said. "Job losses would be much higher and employment would fall for the lowest-skill workers." 
Harvard University economist David Cutler concurred, saying he "would be uneasy about $15 everywhere. I am much more comfortable with $12 everywhere." 
Brookings Institution economist Barry Bosworth said since he’s "unsure of the effect" of a $15 minimum wage, he’s "reluctant to sign on to a number so far out of line with the historical experience."
The CBO and economists quoted above were considering a national increase in the minimum wage and how even that would reduce employment, but the reduction in employment in New Jersey would be greater because our neighbor Pennsylvania will be keeping its minimum wage at $7.25 due to Republican control of the legislature there.  If New Jersey's minimum wage is more than double Pennsylvania's, New Jersey businesses that compete directly with Pennsylvania businesses will be challenged.

Whatever the effect of a $15 an hour on private sector employment is, the assumption that it won't reduce employment is predicated on businesses cutting profits and/or passing on the additional costs to consumers (the assumption is that demand is inelastic.).

School districts cannot cut hours or cut profits, but, in theory, they can raise taxes or get more state aid.

I cannot say what tax and state aid increases would be necessary to sustain services in New Jersey, but given that New York State school districts spend more than New Jersey school districts and New York State's minimum wage was already higher than New Jersey's, the tax increase for NJ districts of $15 an hour would be greater than the 2.6% increase projected for New York State.

The legislative Democrats and Phil Murphy would have a multiyear rollout period for $15 an hour, but still, even if this 78% increase is paced out over five years, it is still adding another 0.5% annually to the tax levy increase, a significant difficulty for many districts.

If Phil Murphy and the Democrats want to increase the minimum wage they will have to change the tax cap law and increase state aid.  Phil Murphy is against a tax cap, but I don't know if the rest of the Democratic Party is with him.  Phil Murphy says he is for "implementing that formula" (SFRA), but he has given no budgetary pathway for doing so and even if he is able to fund SFRA, a third of NJ districts would not gain any aid because they are already overaided.

Increasing the minimum wage would also add costs for the State of New Jersey too, since many state employees and employees of state-funded agencies get less than $15 an hour now.  One important group of state-funded workers earning less than $15 is home healthcare aides.  California's own state and local increases for $15 per hour for home health aides were estimated at $3 billion, which, if New Jersey's state costs increased proportionally, would be about $700 million.

It's also worth noting that increasing wages also increases employer-side payroll taxes.  This would add about 10% to the total wage increase.

A $15 an hour minimum wage is a beautiful impulse morally.  People who keep their jobs and start to make $15 an hour would benefit.

HOWEVER, there are tradeoffs that must be acknowledged and the state, school districts, and other public agencies must prepare for the tax increases that $15 will require to pay for their own employees and higher purchase prices for some products they buy.  NJ has to have a realistic plan to increase state aid and increase the tax cap if $15 an hour is to be workable without layoffs.

---

See Also:
Phil Murphy Overpromises

Thursday, November 10, 2016

The Democratic Senators Represent More People than the Republican Senators Do


This blog is about the malapportionment of state school aid in New Jersey, but this post is about the malapportionment of the US Senate.

A little-discussed but overridingly important fact that is that in the 215th Congress, the 52 Republican Senators actually represent 35 million fewer Americans than the 48 Democratic Senators.  (see below)

Over time, Senate malapportionment has become more extreme and more consequential.

In the First Congress, half of the Senate represented a third of the country.  In the 215th Congress half of the Senate will represent only 15% of the country.  In 1790, Virginia, the largest state, had a population that was 12 times the smallest state's, Delaware.  In 2017, the largest state, California, will have a population that is over 60 times larger than the smallest state, Wyoming.

As the power and spending of the Federal government have increased the consequences of Senate malapportionment have grown more severe.  Small states get more appropriations per capita and due to the formula used for block grants, get more federal aid.  It's little discussed, but most federal block grants give 0.5% of the total grant to every state equally and only thereafter distribute based on need or population.  The small-state minimum has a particularly large affect on education funding.

What alarms me the most is how the undemocratic presidency combines with the even more undemocratic Senate to control the most egregiously undemocratic Supreme Court.

Donald Trump was elected with fewer votes than Hillary Clinton, which is unjust enough, but now he is going to get his Supreme Court nominee confirmed by an even more undemocratically elected Senate?  It's just Constitutional flaw multiplied by Constitutional flaw multiplied by Constitutional flaw. 

Judicial review is a big gun. It can't be aimed very easily,
but once it has a law in its sights, there's nothing anyone
can do to prevent the law from being destroyed.

The Supreme Court - inherently the most undemocratic branch of government - now it is going to spend the next few years gutting duly-passed legislation.

I am no fan of  judicial activism in general.   I have criticized New Jersey's Supreme Court for stretching the Education Clause beyond recognition and for gutting our State Constitution's Debt Limitation Clause. 

BUT, as irresponsible as the NJ Supreme Court has been, at least New Jersey's liberal Supreme Court majority was installed by democratically elected governors and State Senators, a fact that doesn't apply to the United States Supreme Court.

Because liberals won huge Supreme Court victories in Brown v Board of Education and Roe v Wade they venerate the Supreme Court and judicial activism.  The ACLU doesn't even purport to give a sh*t what a majority thinks and works entirely through the courts.  New Jersey liberals in particular like judicial activism because they won on Abbott and Mt. Laurel.  

However, the artillery of judicial activism can be fired at liberal laws just as easily as it can be fired at conservative laws.  At some point I hope to see more liberals realize that their veneration of judicial activism is misplaced as it rests on an institution that is undemocratic in multiple ways and which they are not guaranteed to control.


Number of Republican SenatorsNumber of Democrat SenatorsPopulationPeople Represented By RepublicansPeople Represented by Democrats
AL24,858,9794,858,9790
AK2738,432738,4320
AZ26,828,0656,828,0650
AR22,978,2042,978,2040
CA239,144,818039,144,818
CO115,456,5742,728,2872,728,287
CT23,590,88603,590,886
DE2945,9340945,934
FL1120,271,27210,135,63610,135,636
GA210,214,86010,214,8600
HA21,431,60301,431,603
ID21,654,9301,654,9300
IL212,859,995012,859,995
IN116,619,6803,309,8403,309,840
IA23,123,8993,123,8990
KS22,911,6412,911,6410
KT24,425,0924,425,0920
LA24,670,7244,670,7240
ME111,329,328664,664664,664
MD26,006,40106,006,401
MA26,794,42206,794,422
MI29,922,57609,922,576
MN25,489,59405,489,594
Mississippi22,992,3332,992,3330
Missouri116,083,6723,041,8363,041,836
Montana111,032,949516,475516,475
NE21,896,1901,896,1900
NV112,890,8451,445,4231,445,423
NH21,330,60801,330,608
NJ28,958,01308,958,013
NM22,085,10902,085,109
NY219,795,791019,795,791
NC210,042,80210,042,8020
ND11756,927378,464378,464
OH1111,613,4235,806,7125,806,712
OK23,911,3383,911,3380
OR24,028,97704,028,977
PA1112,802,5036,401,2526,401,252
RI21,056,29801,056,298
SC24,896,1464,896,1460
SD2858,469858,4690
TN26,600,2996,600,2990
TX227,469,11427,469,1140
UT22,995,9192,995,9190
VT2626,0420626,042
VA28,382,99308,382,993
WA27,170,35107,170,351
WV111,844,128922,064922,064
WI115,771,3372,885,6692,885,669
WY2586,107586,1070
TOTAL5248320,746,592142,889,862177,856,730

http://bit.ly/2eG1B9E