New Jersey oxymoron-affordable housing

I shutter whenever the government use the word “planning” when it refers to our citizens.  There is a new term being assigned to the Council on Affordable Housing (COAH).  The latest bill, S1, transfers the power of ultimate decision on affordable housing to the State Planning Commission.  Either way COAH and the Commission are both under the auspicious of the Department of Community Affairs (DCA).

From the Mount Laurel judicial decision the Legislature passed the Fair Housing Act in 1985, which spawned the Council on Affordable Housing (COAH).  The latest move, S1, and has passed the NJ Senate and is due for voting by the NJ Assembly tomorrow.  Governor Christie has stated that he intends to sign the bill if passed by the Legislature.  This bill would move the first line of the administration from state to a preliminary review process done by each municipality.  It is not an elimination of COAH, but a morph.

Affordable housing advocates believe towns that do not want the housing will be freed of the obligation.   Environmentalists are concerned that more development will be built in what they consider sensitive areas.  There is a lot of controversy on S1.   So much so that what I see is more lawsuits and more bureaucratic costs, all of which will ultimately be paid by taxpayers.

In New Jersey the term “affordable housing” is an oxymoron, no matter what entity is working the program.  Counties vary in levels of income to qualify for the housing, along with various values assigned to the price considered “affordable”.   New Jersey will never be affordable until our taxes become affordable.  S1 needs to be voted down, or vetoed by Christie if passed, because it will not create a more affordable New Jersey.

Contact information
NJ Assembly
Governor’s office 609-292-6000

Declaration of Independence Township, New Jersey

There comes a time when a revolution begins.  It occurs when there is nothing, or not much left, to lose.  Most revolts start with a small group willing to stand up for their principles.  A meaningful revolution only comes to fruition if others with similar principles and fortitude join in the cause.

Independence Township, Warren County, occupies a land area of about 20 square miles with a population of less than 7,000.

The small township has evidently had enough of the continual bombardments of state mandates.  Independence Township has many concerns with the orders spawning from the original NJ Highlands Water Protection and Planning Act, signed into law by former Governor James McGreevey in 2004.  Major goals of the Highlands Act are centered on protection of water and environmental resources.  Landowners in the 860,000 acres, singled out from the rest of the state, are put in the position of carrying the financial burden, onerous regulations, and loss of property rights.  To date there have been only meager and unsuccessful attempts toward compensation for those in the Highlands.

For more background information on the NJ Highlands, please view my posts located under “Highlands Water”.

The NJ Highlands Council, an entity created as a result of the Act, formulated a Regional Master Plan (RMP) for the Highlands.  The RMP requires towns in the Preservation Zone to comply and those in the Planning Zones were given a ‘carrot and stick’ option to sign on.  Independence has land in both the Highlands Preservation and the Planning Zones.

With the December 8th deadline looming for conformance in the Preservation Zone, the Township Committee announced their unanimous November 11th decision.  Pound salt Highlands Council and their ‘parent’ entity the Department of Environmental Protection.   Independence spent many years formulating their own municipal master plan based on supporting professional examination of where land should be vacant land, and where residential and commercial development should be placed.  The mandatory compliance to the state RMP invalidates the municipal plan.  In the Preservation Zone compliance is mandatory anyway, so why bother with opting in to comply?

This article in the Warren Reporter is quite reflective of the ‘carrot and stick’ approach the state is often imposing on municipalities.  The Highlands Council Executive Director Eileen Swan uses a whip in this statement.

Swan said a non-conforming Independence would forsake, in addition to the legal shield, other benefits including: planning grants, technical aid, tax stabilization funding, transfer of development rights fees, and priority for Green Acres and farmland preservation funding.

Seems it is an extension of what I view as turf of the Highlands Council. Tax stabilization funding, Green Acres, and farmland preservation for those outside the Highlands, would be decisions stemming from different state entities.  But part of the RMP conformance involves “interagency coordination and assistance” with the Council on Affordable Housing (COAH) and DEP.  Swan’s verbal exercise of possible ramifications shows how power from the state is being used to intimidate and manipulate municipalities into this and many other mandates and regulations.

Independence’s choice of municipal civil disobedience is the first against conformance to the Highlands Master Plan.  One concern the township has expressed if they complied is possible exposure of lawsuits from those barred from building on, or improving their land.  If the township were to pass a resolution to conform they would be embracing the liability and thus would expose the municipality to the defense costs of the lawsuits, instead of the state.

Although many municipalities have expressed anger or displeasure over the imposed mandates, Independence has decided to stand with their principles against state manipulation and control of land within the township’s jurisdiction.

It is about time a stand is taken by a municipality that sees the boundaries drawn as political and arbitrary, overly burdening to their residents and businesses, and a blow to constitutional property rights.

The township is certainly giving their name due justice.

There are but a few weeks before the deadline for Preservation municipalities to either choose or reject the RMP mandatory compliance.  Now is the time to consider joining with Independence or forever face relegation to dependence on the state ‘benefits’ and servitude to the state mandates.

Either choice has its consequences.  For me it boils down to principles and I side with Independence.

Meltdown within a meltdown

On Thursday Governor Corzine addressed a joint session (NJ Senate & Assembly) of the New Jersey legislature.  He outlined four broad proposals, each of which we will explore.  His suggestions once again involve spending, and also are discriminatory in who would be helped rather than provide relief to all who reside in New Jersey.

Corzine’s first proposal “provides immediate assistance to those in greatest need”.  It would provide selective foreclosure assistance through the New Jersey Housing & Mortgage Finance Agency (HMFA), an in but not of entity in the Department of Community Affairs  (DCA).  This agency will then redistribute money to unnamed community housing groups for dispersal to “include financial counseling, mortgage restructuring, and house and mortgage acquisition”.  It is expected that $25 million will be doled out to assume a portion of the mortgage debt for a limited number of the 50,000 yearly foreclosures.  Assemblyman Joseph Malone is asking Corzine for specifics on the criteria, locations, and statewide effects of helping this limited few.  Many of the individuals facing foreclosure overextended themselves and made poor financial decisions.  Note that property taxes are a component of traditional mortgage payments and that if the taxes were under control than these payments would be measurably lower.

In addition to the housing bailout Corzine is proposing $10 million for energy grants to assist about 200,000 households.  Also proposed is expansion of the senior property tax freeze income levels from $53,000 to $80,000.  He claims it will aid approximately 70,000 seniors, the 1st year state annual cost is $5 million, expanding to an annual $30 million by the 3rd year.  As part of this first proposal Corzine is asking for an appropriation of $3 million from state funds emergency assistance to food banks.  He is encouraging individuals and businesses to give more.  All I can say about this request is donations have dropped because people and businesses are broke from the state’s addiction to money.  If property tax relief were enacted a few years ago there would be more money and items to fill the food banks.

Proposal two supposedly addresses economic activity and short-term employment.  I view it as aid to the union rate workers who earn prevailing wage and are inclined to vote for their ‘party bosses’ at election time.  Could it be a coincidence that their pockets will be full shortly before the November 2009 gubernatorial election?  He states that, “The projects are advancing capital plans already authorized, drawn and funded”.

“First and most practically, I have instructed all commissioners, most particularly the commissioners and directors of the Department of Transportation, New Jersey Transit, the Toll Authorities, the Schools Development Authority, the Board of Public Utilities and the Department of Environmental Protection, to accelerate where feasible all currently funded capital spending projects.”

This would infuse $4 to $5 billion in the next six months.  What will be left to do and spend if this is accelerated?

Another part of proposal two involves the Board of Public Utilities (BPU) and Department of Environmental Protection (DEP) Energy Master Plan.  The 89 page Draft New Jersey Master Plan can be viewed here.  Corzine touts this as “green collar jobs, private sector jobs”.  The businesses mentioned are mostly environmental, energy, and engineering with lots of state agency involvement.  I do appreciate that private sector jobs will be included, but in scanning the plan there also appears to be a lot of work for state agency employees and workers paid prevailing wage (union wage rates).

Also, under proposal two are attempts to help small businesses.  Corzine recommends, “depositing at competitive rates a portion of the State’s cash management funds”.  He believes that this financial support to banks will spawn small business lending.  Read what Assemblyman Richard Merkt has to say about this idea.  Corzine also wants to increase further involvement by the Main Street Assistance Program, again in the DCA and the Economic Development Authority (EDA) in supporting businesses.

Just when I think Corzine couldn’t be more out of touch, along comes another epiphany.  He proposes that the legislature consider a two-year program to write a $3,000 check to a small business (defined as 500 employees or less) and a sales tax credit for qualifying capital investments for each full time employee hired and kept for one year.  This is a total waste of money.  Virtually the only business that will take advantage of this are ones that would need and want another employee anyway.  Workman’s Compensation Insurance is a requirement for businesses, even for one low wage employee’s coverage it will cost about $800 a year.  On top of that the matching employer tax contributions will amount to approximately $2,000 a year.  There is extra bookkeeping, possible health insurance, and other costs to consider.

Yet there are real job killers in our state.  Take the Council on Affordable Housing (COAH) again in the DCA, where new commercial development creating jobs is punished.  Joan Verplanck, President of the New Jersey Chamber of Commerce provided information in this letter.

“Under the revised rules, for every 16 jobs that a New Jersey company adds, it must pay a “growth share” for the privilege. In other words, the new rules would force companies to pay for a unit of housing for every 16 jobs they add.

The “growth share” amount paid by companies varies by region. Job creation in Mercer, Monmouth and Ocean counties, for example, will cost companies $152,227 for every new affordable housing obligation. COAH has determined a need for 115,666 units of affordable housing in New Jersey through 2018 - up from 52,000 in the previous rules.

There is also a component of the new rules that forces companies to pay additional amounts to COAH if they decide to expand their facilities.”

If the State of New Jersey wants to do something meaningful for businesses there are a number of issues that should be addressed.  Here are a two to ponder.  Get the Division of Taxation under control to provide clearer support to businesses, rather than using ‘after the fact’ intimidation and totalitarian tactics when a matter arises.  Mandates are passed to the division as a result of the state’s government passing bloated and wasteful budgets, giving the tax collectors the hatchet and the orders to get money.  Second suggestion, pay businesses for the important fiduciary tax collection trust functions that is ever increasing in responsibilities.  Business is forced to act as an agent for the state, without compensation.

In proposal three Corzine recommends that the legislature enact long-term business climate and economic changes.  The Governor mentioned business tax reforms that would be helpful to some businesses.  The Corporate Business Tax (CBT) provision known as the “throw out” rule determines how the taxes are collected based on other state tax policies.  Basically, under this rule if a multi-state business with a New Jersey headquarter is not taxed in another state, New Jersey taxes the income.  Another is the business loss carryover extension from seven to twenty years.  States that surround New Jersey already have a twenty-year carry forward period giving a company a better chance to absorb losses from growth, investment, and expansion costs.  This will encourage New Jersey businesses to expand in those three areas and it make more desirable to do business in our state.  A third New Jersey tax rule discussed is a change toward a single sales factor tax.  New Jersey determines company taxable income based on property, sales, and payroll while a number of our neighboring states base income on only the sales component.  Corzine is also supporting 54 recommendations submitted by the Permit Efficiency Review Task Force.  These recommendations would mainly reduce permit duplications and aim to improve the efficiency of the permitting process.  The above-mentioned recommendations will do nothing for the hundreds of thousands of ‘mom and pop’ businesses that fuel massive amounts of taxes and jobs to New Jersey.

The last critical proposal voiced by Corzine is how he intends to remain fiscally responsible in a time of declining revenues.  He estimates the direct state cost (spending) of the above ‘stimulus’ package at $150 million.  The Treasury Department is guessing that the revenue shortfall for the year will be $400 million.  The departments have been asked to cut back on equipment purchases, consultant contracts, and lower priority programs.  He is counting on the federal government announcing a second economic package that will provide increases to state Medicaid support, unemployment aid, housing and energy funding, also infrastructure and children’s health care aid.

Democrats statements on Corzines proposals are general in nature, cheering for his plan.  Republicans are less complementary, negatively dissecting individual aspects of the plan.  My personal view of the proposals is that they are selective in nature and they do not generally address core issues for most businesses and taxpayers in New Jersey.  It is a blow to most of the financial supporters of New Jersey’s large moneybag.  I consider most of the plan more fuel for New Jersey’s personal meltdown.