Monday, August 8, 2016

Phil Murphy Doesn't Understand State Aid

Phil Murphy just did an interview with Larry Mendte of "Jersey Matters" on several issues facing the state, including school aid.

The interviewer asked Murphy some pointed questions. In the first part, he asked Murphy would get
the money for everything that he has promised and why Phil Murphy never mentions that he worked for Goldman Sachs.  Murphy refused to directly answer to the first question about how he would pay for things, and instead said that a budget is a statement of a society's values, so the dollars and sense of costs can be figured out later.

Murphy said he didn't talk about being from Goldman Sachs because it "cuts both ways" and would turn off some voters, ie, the kind who supported Bernie Sanders.  Yet, he claims that being from Goldman Sachs gives him a great deal of insight into what facilitates economic growth.

Anyway, the section which most interests me occurs in the second part and is where Larry Mendte asks Phil Murphy what his plan on state aid is. If you're pressed for time and can't watch the whole interview, check out the 3:30 minute.

Larry Mendte frames the question of school aid with a short preamble about disproportionalities in funding, with some districts being overfunded and some districts being underfunded "for no rhyme or reason."

Rather than answer the question about redistributing money or comment on how unjust the status quo is, Murphy glibly vowed to "implement the formula," without any discussion of how much it would cost ($2 billion without redistribution) or where he would get the money from.  He then gave a semi-inaccurate explanation of SFRA.

Murphy repeats the description of SFRAthat "money follows the child," but claims that SFRA funds kids more who are from single-parent homes and who have learning disabilities, when this isn't true. SFRA have no references at all to giving more money to districts who have more kids from single-parent homes and intentionally assumes that every district in NJ has the same percentage of kids who have learning disabilities.  All else being equal, under SFRA, a district with a 25% classification rate would get the same amount of special education funding as a district with a 10% classification rate.

The major omission of Phil Murphy's answer is that he doesn't acknowledge that fully funding the K-12 component of SFRA would cost $2 billion (without redistribution), or give any pathway at all to where he is going to get that money.

Larry Mendte then asked Murphy, point blank, if he would move money from overfunded districts to underfunded districts. Murphy then repeats,  "I'd like to follow the formula."

Murphy never uses the word "SFRA," nor does he mention Abbott, which was what SFRA was a reform of. Murphy talks about his involvement with the NAACP, without mentioning that the NAACP supported the Abbott status quo and OPPOSED SFRA back in 2007-2008, when it was being passed.

Debt as a percentage of state income, 2013:

If NJ had a flourishing economy or low debt, we could "implement that formula" but NJ's economy is one of the most stagnant in the US and our debt levels one of the highest.  The stagnant economy plus the indebtedness means that NJ isn't going to be able to come up with the additional money to fund SFRA and bring every underaided district up to fairness without tax increases of hitherto unconsidered size.

Murphy already has the most expensive gubernatorial agenda of anyone running this year.  Murphy's endorsement of providing "free" Pre-K to another 45,000 children would cost $607.5 million.  (45k x $13,500).

So I really worry about where Murphy is going to find the $2 billion for K-12 aid that we would need if we didn't redistribute.

Source, NJ Spotlight
Murphy has aid in the past that NJ can solve its budget crisis by reining in tax incentives, but when every single state in the US has its own aggressive tax incentive program, I don't see Murphy's unilateral disarmament as a smart idea.  Murphy also confuses tax incentives approved with money actually given out and ignores that tax incentives provide positive externalities for Smart Growth and urban revival objectives.  He has proposed his own slew of tax incentives too for things like college loan forgiveness.

Murphy comes off as uninformed (again) in this interview of how SFRA's formulas work or what the rationale for SFRA was, Murphy has been asked about state aid before and he must know about Steve Sweeney's state aid reform proposal, so I can surprised that by now he hasn't gotten up to speed on state aid.

My belief in that opposing redistribution, Murphy is actually being politically calculating, since he must know what what overaiding and redistribution are.  He does not want to take aid away from any district because it would (the horror!) alienate some voters and Murphy wants to pander his way into the governorship.

Murphy knows that the NJEA is not on board for redistribution and NJEA support is essential for him to win the Democratic primary. 

Phil Murphy knows that Steve Fulop and the Hudson County machine don't like Steve Sweeney. Murphy knows that he is the second choice of the Hudson County machine, after Steve Fulop himself.  Murphy calculates that if Fulop drops out, he can get that support and defeat Sweeney.

Phil Murphy claims to be the "governor who has your back," but in opposing redistribution, Murphy is taking the side of Hoboken, Jersey City, Asbury Park, Pemberton et al against the rest of New Jersey.  The status quo aid distribution is already an "us versus them" scenario where districts who are richer or smaller now than in the past continue to receive state aid at a level that is unjustified in light of their current resources and needs.

Districts who have gone the opposite way, and gotten poorer and/or larger, are screwed.  These are the districts who need a "governor who has their back."

From the looks of things, that governor isn't Phil Murphy.

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