Thursday, April 7, 2016

Will Vincent Prieto Put Hudson County First?

The only ray of light on the landscape of New Jersey school aid is the long-incubating, still-unreleased aid reform bill that Senate President Stephen Sweeney and Senator Jennifer Beck are working on.

Given that Sweeney is the Senate President and Beck is a respected Republican, the bill's chances in the State Senate are fairly strong. Chris Christie will have the final say on whether this bill becomes law, but even before the bill gets to Christie the bill would have to pass through the State Assembly where the political calculations are much less certain.

Even before any vote takes place, this may come down to Assembly Speaker Vincent Prieto.

Prieto's own constituents are severely underaided and he should be spearheading aid reform (more below), but he has a close relationship with Jersey City Mayor Steve Fulop.  Prieto is a backer of Fulop for governor and is not inclined to do Steve Sweeney any favors.

Star-Ledger columnist Agusten Torres says the the Fulop-Sweeney-Prieto dynamic goes like this:

Prieto is the counterbalance in the state Legislature to Senate President Steve Sweeney, who is considered a major Fulop rival for governor. If Sweeney tries to get legislation approved that would enhance his political stature or hamper Fulop's, Prieto is there to "fix" the situation or seek a compromise. I am not insinuating that their actions would hurt the state or its residents – you're thinking those thoughts. A classic example is the battle with Sweeney over competing legislation for adding two new casinos in New Jersey.
The Assembly Speaker's loyalty could well be rewarded when it is time to find a seamless replacement for U.S. Rep. Albio Sires of West New York, who is like Prieto, a Cuban-American out of North Hudson. A possible Gov. Fulop's endorsement would boost a Prieto run for Congress in 2018.
I wouldn't go as far as Christie went about Fulop being Prieto's boss, but the close relationship is there.  Fulop himself has said "I have significant clout with Speaker Preito."

Prieto himself is the chairman of the Hudson County Democratic Organization. As chairman, Prieto has made strengthening the Hudson County Democratic Organization a priority, saying "The (Hudson County) Democratic organization has always been renowned across the state. It's something everyone always talks about. We want to restore it to what it has been."

Since redistributing state aid would offend the Hudson County Gold Coast aid hoarders, Prieto may be reluctant to allow a vote to even take place.  Mayor Steve Fulop's strong opposition to a property tax revaluation for Jersey City indicates that he would oppose even more strongly the redistribution of state aid, since that would cause money to leave Jersey City instead of just be redistributed within Jersey City.

Christie and Zimmer
(This was pre-Hurricane Sandy)
Nor would Fulop be the only alienated Gold Coast politician. Among just the Gold Coasters who have been vocal about maintaining aid levels, Jersey City/Hoboken Assemblyman Raj Mukerji who defended Jersey City's state aid, saying critics of it "don't get the challenges of urban education,"   Jersey City/Bayonne State Senator Sandra Cunningham, who voted against SFRA in the first place, Assemblyman Ruben Ramos of Hoboken who had no qualms about demanding 100% state-funding for construction in Hoboken despite Hoboken's astronomical tax base and desperation elsewhere.  Mayor Dawn Zimmer of Hoboken has been more of a passive exploiter of the rest of the state, but she puts low taxes as a major priority and while clearly a Democrat endorsed Chris Christie in 2013 (well before Hurricane Sandy), saying "he had been good for Hoboken."

A greater difficulty of prediction is that Prieto is not an education legislator by any stretch.  At his 2016 swearing in as Assembly Speaker his only remark on education was a platitude that he wanted "Quality of education for all children."

Although Prieto voted for SFRA, his statements on education funding are few and far between. What few stances he does take on education funding are restricted trying to get more money to vocational education and Pre-K, although he never proposes any offset to pay for either. The education funding legislation Prieto has sponsored has included every kind of education other than K-12; he has sponsored money for vo-tech, adult education, county colleges, a NJ version of the Dream Act, aid for nursing students, and $110 million for Pre-K but nothing for K-12 in at least the last two legislative sessions.

In fact, Prieto seems to think that the education-world talks about funding too much.

Prieto's points about how little attention vo-tech gets in contrast to K-12. In an interview Prieto said “[Vo-tech] one component in education that’s often neglected. We always talk about K through 12 and higher education."

Prieto is right about vo-tech, but do we really "always" talk about K-12?

The vo-tech bill, which Prieto has authored in multiple legislative sessions, is telling because it would give additional state aid to vo-techs whose student populations have gained 10%. Why Prieto does not author a parallel bill for K-12 districts whose populations have grown by 10% is beyond me.

What is shocking about Prieto's lack of interest in education funding is that Prieto's constituents are among the most underaided in New Jersey.

And who are his constituents?

Despite his deep involvement with Hudson County politics, Prieto does not, in fact, represent "Hudson County."

Prieto's constituents are the residents of a legislative district known as "District 32," consisting of East Newark, Edgewater, Fairview, Guttenberg, Harrison, Kearny, North Bergen, Secaucus, and West New York. He does not represent Jersey City (overaided by $130 million or $4,272 per student, plus Pre-K), Hoboken (Officially overaided by $7.5 million or $2,887 (but I believe Hoboken's SFRA aid target is too high given its wealth), plus Pre-K), or Weehawken (overaided by $1 million or $773 per student).  District 32 touches the Hudson River, but the Hudson River towns of District 32 aren't prime "Gold Coast" real estate (yet).

And Fairview and Edgewater are in Bergen County too.

All of the school districts of District 32 are underaided, sometimes severely so.  East Newark is NJ's third most underaided and is farther below Adequacy than any other district.   Fairview is the fifth most underaided and is the lowest spending district in New Jersey.  Guttenberg is the 10th most underaided district in New Jersey.

The cumulative aid deficit for District 32 is $103 million. Since the total deficit for all 380 underaided districts (not counting vo-techs) is $-1,871,376,087, District 32 alone represents 5.5% of the state's total aid deficit.

District 32's cumulative deficit has to be one of the largest of any legislative district in New Jersey.

When I Googled Prieto and "SFRA," "state aid," etc I get nothing substantive. In Prieto's Twitter and Facebook feed references to education are almost nonexistent and I went back years. There are no photos of Prieto visiting schools that many other politicians like to share.

When Christie came out with his FY2017 budget, Prieto ignored the underfunding of SFRA and the unfair distribution within the amount that was disbursed.

Governor Christie gave his annual budget address to the legislature today and he continued to mislead on several of our...
Posted by Assembly Speaker Vincent Prieto on Tuesday, February 16, 2016
Prieto is a progressive and supports important parts of the progressive agenda, especially measures to alleviate poverty, but on education funding there is nothing there.

Prieto's constituents are uniquely underaided, but Prieto is not unique in indifference to education funding or prioritization of pensions and the Transportation Trust Fund.  However, most other legislators from underaided districts don't depend on politicians from NJ's most overaided districts for political support nor want the mayor of NJ's most overaided city to become governor.

In contrast to Prieto is District 32's State Senator, Nicholas Sacco (also mayor of North Bergen). While I haven't heard Sacco call for redistribution, Sacco is fired up about state aid unfairness. Sacco called the Abbott district list "totally artificial" and says "tell me the difference between North Bergen, Union City, and West New York in the real sense of the children?"  "Because of the state’s bizarre interpretation of the funding formulas, districts like North Bergen, that are not wealthy and don’t receive Abbott funding, are hurt the worst."

(Sacco overstates the similarities, but his basic point is correct.)

Redistribution has to Happen

It's 2016 and New Jersey's economy remains below where it was pre-Recession.  Whereas the country has recovered 154% of the jobs lost in the Recession, we have recovered on 87% and in January and February 2016 New Jersey had  a net loss of jobs.  The state's debts are more intractable than ever.  Moody's has cut our outlook from "Stable" to "Negative."  The pension funds lost over 6% of value in the twelve months preceding February 2016.   If NJ loses Berg v Christie (over COLA suspension) the state's obligation will increase by $500 million.  Even without COLAs, NJ's unfunded pension obligations increased by over $2 billion last year.

There's always going to be another recession, but even before the next one arrives, New Jersey is not going to be able to fully fund SFRA even if the next governor is willing to raise taxes.   I don't even think the current $8 billion distribution is sustainable.

Although redistribution wouldn't come close to bringing all underaided districts up to their SFRA targets, it would be more than enough to bring severely underaided districts up to less-awful deficits and among those severely underaided districts are several in District 32.  Hoboken/Jersey City Assemblyman Raj Mukerji said that critics of Jersey City's state aid "don't get the challenges of urban education," but he's flat out wrong.  The critics do get the challenges, but see identical or more severe challenges outside of Jersey City, know the state's finances are limited, and know that Jersey City's $22 billion tax base is capable of paying more than $112 million in school taxes.

Given who is real constituents are in District 32, Prieto should be leading the charge for fair aid on his own, but because of a personal lack of interest and political conflicts of interest with Gold Coast politicians, Prieto has done nothing.

Now the question is what will happen when the Sweeney/Beck bill forces Vincent Prieto to take a stand on education funding and the acceptability of redistribution.  If so, Prieto will have to choose whether his aspiration is to serve his own constituents or his "friends" in Jersey City and Hoboken.

Prieto with the Gold Coast Team:
L-R: Hoboken Mayor Dawn Zimmer, Hoboken/JC Assemblywoman Annette Chaparro, Hoboken/JC Assemblyman Raj Mukherji, Jersey City Mayor Steve Fulop, Vincent Prieto.

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