Gateway Regional Chamber of Commerce
Past President’s Messages - 2007

President’s Message – December 2007

A Cast of Clowns - The Show Goes On

Ho-hum. Status quo once again. New Jersey just went to the polls and re-elected the same people to the legislature. Now we can look forward to two more years of corruption, incompetence and poor government. I for one did not vote for any of the incumbents at any level, so at least I cannot be blamed.

While it would be nice to get wholesale change in the state Legislature, I have come to realize that it is not a sufficient condition to achieve better government. The very way the legislature operates guarantees problems no matter who is elected. With few exceptions, new legislators become just as bad as the old ones. It is the height of decadence.

Recently I have been listening to a series of lectures on the fall of the Roman Republic.  Throughout the series, which mainly concerns the corruption, incompetence and poor government of the Roman Senate, I could not help but be reminded of our own system. The Roman Republic fell because of the underhanded deals, the unholy alliances and unabated self-interest of its Senators. Today, these remain the same causes of our own governmental misfortune.

Since the type of people that go into politics has not changed since Roman times, I do not think we can have any hope that it ever will. One would think, however, that we could become a little more astute in keeping them in line.

Clearly money is at the root of the problem. The primary interest of most any politician, like most anyone else, is to make money. The difference is that a politician does it by wielding influence whereas everyone else does it by working.

Hardly a week goes by where we are not reminded of this. One of Union County’s assemblymen was just discovered to be a member of a lobbying firm based in Westfield whose clients’ matters he regularly votes on. Two other county legislators (one now deceased), together with the party head, were discovered to be partners in a title insurance company that derives business based on their influence. Seemingly every lawyer in government finds that their law firm benefits when they get elected to office, and some, like Union County’s most prominent senator, have made a fortune driving business to his law firm.

Many people laughed when Steve Lonegan, the Mayor of Bogota, filed 35 ethics complaints against legislators for voting on spending bills that affected either themselves, their employers or their family members. All but two of the cases were dropped because in New Jersey it’s ok to do this!

Clearly what is called for is some sunshine on our elected officials dealings. Yes, they have financial disclosure forms, but they are not disclosing nearly enough. Too much has been hidden from public view for too long.

So, what should be disclosed? Everything! We should know where our legislators’ money comes from. We should know how they have it invested. We should know for whom they work. And we should know for whom their employers work. We should know where their families work.

This means – especially in the case of lawyers, lobbyists and consultants – a constantly updated list of every client represented by their firm should be provided. It is not enough to know whom they represent directly.

Coupled with this should be a requirement that government officials recuse themselves from voting on anything that affects them, their families, or their employers. Surely this would result in a lot less people wanting to get into government, but it certainly would make it more transparent and honest.

For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.  Timothy 6:10 (King James Version).

President’s Message – November 2007

What is the Mayor of Elizabeth thinking?

He has spent tens of thousands of dollars with the aim to keep the children of Elizabeth from getting a new high school. It is one of the most pernicious uses of public funds imaginable.

For years, the Elizabeth Board of Education has been trying to acquire land to build several new high schools. Elizabeth High School, with 5,300 students, is the largest high school in the United States. These kids are crammed into a space designed to hold only 3,000 students, a monstrous number in itself. This overcrowding has meant that the services and opportunities that can be offered to the students are greatly diminished. 

The most urgent need is for a vocational high school. Many students in the Elizabeth school system do not have the interest or funds to go on to college, and without technical skills, they face a pretty marginal future as a result.

Though the Board of Ed understands this, their efforts to get their kids vocational training have been continuously stymied by Mayor Bollwage because of his personal disdain for individual Board members. At issue is a piece of land on Trumbull Street that used to be owned by NJ Transit. The Board of Ed in the late 1990s sought to obtain the property from NJ Transit, but it was instead turned over to the City of Elizabeth for about $520,000.

Rather than giving the land to the Board of Ed to build a school, the Mayor instead sold it to a campaign contributor for the same $520,000 to build a strip mall. The actual value of the land is over $5,000,000. This transaction almost became one of the all time great New Jersey sweetheart deals.

Unfortunately for the Mayor and his friend, the Board of Ed filed suit to overturn the sale, and knowing how bad the deal looked, both the Mayor and his buddy decided to reverse their sweetheart deal. In a fit of pique, however, the Mayor still refused to transfer the land to the Board of Ed unless it pays him the $5,000,000 instead of the $520,000 he was going to charge the friend.

There is a certain irony in the Mayor’s stance that seems only to be lost on him. That irony is that both the City and the schools draw on the same pool for their funding, the taxpayers of Elizabeth. Thus, if the Mayor had his way, the taxpayers of Elizabeth would pay him $5,000,000 for a piece of land that cost them (the citizens of Elizabeth) $500,000.

Of course, knowing the Mayor, this windfall would in no way benefit the citizens of Elizabeth, but likely be spent on giving contracts to other friends outside the city. Many people ask: “How does this happen? Why can’t we get honest politicians?”

This fight is now in the courts. Though an appellate court just ruled that it did not think it could force the city to sell the land to the Board for the $520,000, its disdain for the city’s actions was clear. In the course of oral arguments, Judge Weissbard said to the Elizabeth City Attorney, William Holzapfel, “. . .. this really seems embarrassing for the City of Elizabeth. In fact, one could say it’s a disgrace.”

The case is now headed for the Supreme Court. At question is whether under the Abbot decisions municipal government also has an obligation to ensure an adequate education for their students, or is it only a state obligation. Let’s hope the court continues to decide in favor of the students. Unfortunately, the cost of getting this decision is probably going to exceed the cost of the land.

This controversy could be solved, however, if the members of the Elizabeth Board of Education would simply come to collective senses and give the mayor what he wants. If each board member made a substantial contribution to the mayor’s reelection campaign, perhaps he would start treating them like other contributors and giving them whatever they want. Jeez, this way we could get four new high schools built in no time.

President’s Message – October 2007

“Mims is cool. ... He’s gonna do it.” – Assemblyman Alfred Steele, on Mims Hackett (U.S. Attorney complaint) 

“It’s been six years doing this job, and I thought I could no longer be surprised by a combination of brazenness, arrogance and stupidity,” Mr. Christie said. “But the people elected in this state continue to defy description.” 

“I want to make myself clear on this. I know there’s been criticism and talk about whether the US Attorney is political in nature in his investigations – the timing of his investigations,” said Codey. “Let me say to those who would say that, that is not the question. He is doing his job, and he should be doing his job. He didn’t put a gun to anybody’s head and put their hands in the cookie jar.” 

“It’s like catching salmon in the Northwest during mating season. The rivers are choked with overeager fish waiting to spawn. In New Jersey, the halls of government are choked with officials all too eager to throw themselves into a legal net if they get even a whiff of some chum.” – The Record columnist Alfred Doblin - The Record, 09/07/07. 

It’s not hard to get memorable quotes here in New Jersey. Like most people, I both want to laugh and cry when I read them. Eleven arrests, including two assemblymen, two mayors, several present and former councilmen, board of ed members, and one staff person. When you read their taped quotes, you realize how keen they were to capitalize on their positions for personal gain.It is all so tawdry. It is all so New Jersey. It makes you want to laugh. It makes you want to cry. 

It also makes you want to vomit. These 11 arrests are just the latest in a series that I think now numbers in the range of 120. All have been brought by U.S. Attorney Chris Christie. Both the McGreevey and Corzine administrations have been almost completely absent in trying to root out political corruption in the state. Of course, when two of your Attorneys General have to resign for ethics violations, it makes it hard to pursue corruption cases against your friends and colleagues.

 Many voices in the Democratic Party and several newspaper editorials have spoken out against Chris Christie, claiming these investigations and arrests are politically motivated. While it certainly does make good politics to arrest corrupt politicians (in this case of both parties), their confessions, plea bargains and convictions are not politically motivated. These crooks are going to jail because they are crooks, not because they happen to be on the wrong side of the political fence. 

That only 120 or so of our elected officials have been caught is what is sad. The number of corrupt politicians in our state is so much greater that the number could easily be 10 or 20 times higher if every lead was followed up on. 

And this is only on the illegal corruption. The governor and the legislature have continued to make a mockery out of ethics reform. Though Governor Corzine recently signed ethics legislation into effect, it is a sham that gives these guys what they think is enough cover to get them reelected in November. 

Many people ask: “How does this happen? Why can’t we get honest politicians?”

These are questions I never ask because the answer stares me in the face every time I look in the mirror. We elect people time after time. We almost never change them. Change comes only when they get tired of ripping us off and retire, or they die – or they get themselves put in jail. If you vote for the incumbent in November, you will be voting for corruption.

President’s Message – September 2007

This month's issue of Inside Business has special importance for me.  As a parent with a teenage child with special needs, I am very aware of the challenges that parents face, especially as their children become older. We parents of special needs children all thought it was going to get easier as our children grew up.

In reality, the challenges have simply changed.

Eleven years ago I made the decision to change career paths primarily because of my older son's disabilities. He has neurological issues that make learning and socializing difficult for him.  Since his earliest school years he has been in special education programs, both within our school district and outside. 

My career before coming to the Chamber was primarily in the international arena and involved a very substantial amount of travel. When you have kids, however, especially one with special needs, you have to make a decision as to what is more important, your career aspirations or your family. In my case, I decided that my son was of greater importance, and I decided to work in a position that allowed me to stay close to home. 

My son, like so many kids with neurological issues, has greatly benefited from the services he has received from our school district. It was pure happenstance that we ended up in New Jersey, but if you have a child with special needs, this is one of the best places in the country to be. The services and the expertise here are unsurpassed, and constantly expanding and developing, as discussed in our article on the proliferation of special needs schools.  

While this is great, many school board members will point out that it comes at a very high cost. For years now, school board budgets have been increasing at extremely high rates, and one of the drivers is the need to provide services to an ever-growing number of students who have special needs. 

So is it worth it? Well, from a parent's point of view, these services provide a definite benefit. Of course, this is an extremely selfish view, but as a parent, I naturally put my child first.

From society's perspective there is also more than a simple altruistic reason to provide these services. Frankly, it is in our self-interest. You see, kids who receive early and continuous intervention are less likely to use drugs or commit crimes, and keeping them in jail is much more expensive than educating them. Also, the more education these kids receive, the more likely they are to get jobs and provide for their own support rather than counting on public funding. 

Kids with special needs are often described as having “developmental delays,” and this tends to be a very apt description. These kids are capable of learning; they are just slower than the rest of us at doing it. However, with lots of patience and repetition, special needs kids almost invariably make progress in developing their skills. Let me tell you, it is hard work, and I give tremendous credit to the professionals and volunteers who work with these children.

The problem is that we are all too often too ready to give up on these kids. The state is required to provide an education for all students through high school. Because of their delays, the time frame for children with special needs is extended to age 21, whether or not they finish high school.

After that, they are pretty much on their own, at least as far as education goes. Though there are some really good job training programs, such as the one run by the Occupational Center of Union County, there is not a lot out there for kids who want to develop there academic skills.

In my view this is a real disappointment. Because of their delays, many neurologically impaired kids reach their best years for learning in their late teens and early 20s. Many want to continue with academic pursuits even though perhaps not at the same level of a normal kid. 

President’s Message – August 2007

One of the most effective agencies in the U.S. government is the Occupational Health and Safety Administration (OSHA). A small and somewhat obscure part of the U.S. Department of Labor, OSHA has been responsible for a revolution in workplace safety awareness since its inception in 1970. 

In its early years, OSHA was looked upon by business as an intrusive and abusive regulator bent on destroying U.S. manufacturing by creating a web of regulations that would govern every aspect of the workplace. This body of regulation has in fact come to exist, but rather than destroying business, it has instead made it much stronger. 

You see, what happened along the way was that first management, and then labor, began to realize that there are definite advantages to having a safe workplace. When someone gets hurt, operations stop or at least slow down. When someone gets hurt, it costs a lot of money. The worker has to go to the doctor or the hospital, and that causes health insurance and workman’s comp costs to rise. And when a worker is in the hospital or at home, they are not working. This lost productivity is certainly the greatest cost related to workplace injury.  

As business began to realize the advantages of a safe workplace, OSHA began to realize that the real experts in making plant operations safe were the plant operators. This almost simultaneous realization led to creation of the Voluntary Protection Program (VPP) during the 1980s. VPP establishes formal, cooperative relationships between management, labor and OSHA to voluntarily work for continual improvement in workplace safety.

Getting into this program is not easy; it often takes years, and is based on how well you are already doing. If your plant has a lot of injuries, for instance, or unsafe conditions, these need to be dealt with before any application can move forward.  

VPP has been embraced more by the chemical manufacturing industry than any other. Given the volatile nature of chemicals, most manufacturers, especially large ones, have always been the most safety-conscience businesses. Nationally, New Jersey has the highest participation rate in the VPP and there are more Star sites, OSHA’s highest safety designation, in Union County than anywhere else in the country. 

Though it was not the intention of VPP, another thing has happened along to way to making plants safer. While OSHA will not admit to this, its programs and inspections have also made the communities around the plant safer, as well. When systems to minimize or contain risk are in place to protect workers inside the plant, those same systems protect the people who live outside the plant by default. 

So if systems are in place to control releases in the event of a catastrophic breakdown, if evacuations plans are in place, if emergency response contingencies are practiced – all part of VPP – the danger really becomes quite minimal. 

These safety programs are the biggest part of making chemical plants secure. This is not to say that there isn’t a need for fences, controlled access and all the other security measures that have been added to combat terrorist threats. These precautions are needed, and frankly predate 9/11. That they have been continually improved and strengthened makes good sense as part of an ongoing process of continual improvement. 

It doesn’t take a lot of background to realize that the risk posed by chemical plants is nowhere near what we are lead to believe by popular press reports and questionable studies. OSHA has done a great job in making us safe. In my view, they are the unsung hero of this whole terrorist threat.

President’s Message – July 2007

My wife is a fanatic about clean windows and at least once a year we have a window washing company based in Irvington come in and professionally clean them. The company is a small African-American-owned business and the workers have always been African-American, at least until this last visit to my house. 

This time, the owner showed up with two Hispanic workers who spoke no English, and since the owner didn’t speak Spanish, it made for an interesting experience watching the interaction that involved a lot of yelling. I guess, if someone can’t understand you, just talk louder, and surely they will get it. 

What interested me, however, was the social dynamic. Why would the black owner of a business in a predominately black town hire Hispanic workers who he couldn’t understand? When I asked him this question, he said without hesitation that it was because he couldn’t find anyone else to do the work. 

This, of course, is the typical response when an employer is asked why they hire workers with questionable documentation. If they would only pay more, they could get all the help they need, so what they are really doing is just putting more money in their pocket instead of giving jobs to red-blooded Americans. 

Now in the case of my window washer, if this is what he is doing, it sure doesn’t look like it. Frankly, my guess is he’s just barely getting by, eking out enough to feed his family. This is not a business that is going to make him rich no matter how little he pays the couple of guys who work with him. 

So why doesn’t he just raise his price? Then he could afford to pay more and hire American workers. Well, if having my windows washed cost any more than it already does, I would tell my wife to live with dirty windows, or point her in the direction of the ladder. As anyone in business knows, if you raise your prices too much, you go out of business. 

My windows serve as a microcosm for the U.S. economy and efforts to reform immigration. Though there are people out there who would like to have jobs, the economy is desperately short of labor, especially those who are willing to do hard, unskilled work for low pay. Outside of the country is a huge pool of workers who are willing to do the hard, low-paid work, because they need the money. 

It’s all about supply and demand, and as a result people are going to come to this country to get jobs, and we are going to hire them, and there is nothing that government can do to stop it short of putting all of us in jail. 

The government can, however, within limits control this supply and demand through immigration reform. 

There are two main components to immigration reform that are always tied together, although there is no reason for them to be linked. By far the most important is to establish a mechanism to get workers into the country legally and in numbers that meet demand. Usually referred to as a guest worker program, if we had a decent one, we would greatly cut immigration. Most people who come to the United States do so because they can earn a lot more money than they can at home. They come to earn money so they can improve the lives of their families back home. 

Right now this is most often done illegally because there is no legal option. And once you’re here illegally, you realize that you can’t go home, so you tend to stay. And, of course, since you’re illegal, there is no one to remind you that it’s time to go home. With a guest worker program, workers would come here temporarily, earn money, and go home. This type of program is used in other labor-short counties like Singapore and Japan very effectively.

The second component of immigration reform is what to do about all the folks who are here now illegally. As I see it, there are two options: one is to punish the people who are already here, handcuffing nannies and locking up window washers; or we can find ways to make them legal. One is costly and mean-spirited. The other is realistic and generous. I’ll go with generous every time.

James Coyle

President

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Over the past several weeks I have been working with the Elizabeth Public Schools to develop a health and wellness fair for the students at Elizabeth High School. We picked Elizabeth High School to host the fair because it is the largest high school in the United States, and its student body is 65 percent Hispanic. While health issues related to teen obesity are problematic throughout the population, they are epidemic in the Hispanic teen population. 

Working with the school was an eye-opening experience. After years of hearing bad things about the school from many quarters, including Elizabeth’s mayor, I was expecting something out of the Blackboard Jungle, with the students running amuck and everything except education taking place. I expected a dirty, dilapidated facility. I couldn’t have been more wrong. 

The school I actually found was clean, well lit and amazingly quiet, even during class changes.  Over the past several years, the Elizabeth Board of Education began work to improve the city’s schools. This has included building 11 new schools over a 10-year period using funds from the School Construction Corporation, more than any other school district in the state. 

While this has been a massive undertaking, it has focused on primary education. At the high school level the emphasis has been to develop stricter standards to improve the quality of education. This year new and wide-reaching standards were implemented at Elizabeth High School, all of which exceed the nationally mandated standards of No Child Left Behind. 

For instance, the required school day at Elizabeth High School is 7:30 a.m. to 4 p.m. To graduate, students are required to have a 95 percent attendance rate and complete 160 credits, compared to 130 credits in the rest of the state. There is discussion of requiring uniforms in the school, which have been successfully introduced in many of the primary schools. These requirements may be the most stringent of any public school in the state. 

As important as these initiatives are, Elizabeth High School is like a huge ship, and once set on a course, it does not turn on a dime nor does it stop on a dime. With more than 5,300 students at the school, it is unreasonable to expect it to become a top performing academic powerhouse overnight. Rather, what is needed is to break this large ship into a number of smaller, faster, more nimble ships that can respond to student needs quickly. 

And herein lies the problem. Attempts by the Elizabeth Public Schools to build new high schools have been systematically stymied by the Mayor and Elizabeth City Council. Elizabeth’s most pressing need is to build a vocational high school, as vocational training will present the greatest number of opportunities for Elizabeth students who want to enter the workforce and will help cut school dropout rates. Two contiguous pieces of property have been identified as an excellent site for a vocational high school, but the city administration prefers to see that land developed by specially connected friends rather than being used for educational purposes. 

This controversy over the best use for the sites has led to a series of lawsuits. To prevent the Elizabeth city government from selling one parcel of the land to a developer at 10 percent of its appraised value, the Board of Education was required to hire a law firm and protest the sale. The city continues to balk at providing for students, and causes more money to be spent on legal fees. With one public entity fighting another public entity, the ones losing are the taxpayers who fund all the legal bills. Meanwhile the students are packed like sardines into a building designed for just more than 3,000. 

James Coyle

President

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Sometimes there are real disadvantages to being a monthly publication. Issues come up that are important, but fade from our attention by the time we get ready to go press. A few weeks back, however, The Star-Ledger ran two stories that were so incredibly misleading that I feel the need to provide a bit of clarification. 

The first, and most egregious was a front page story by Tom Moran on March 21 entitled “Lax federal rules won’t prevent a chlorine cloud.” Moran opened his story saying that there is a railroad tank car sitting at Kuehne Chemical in South Kearny that could easily be attacked by terrorists. “If that single tanker were blown up by a skillful terrorist, it could spread a cloud of poisonous gas for miles and cause casualties on the scale of Hiroshima and Nagasaki,” wrote Moran. 

Now I think Moran meant Hiroshima and Nagasaki combined by this. In Hiroshima approximately 140,000 people were killed with another 74,000 in Nagasaki for a total of about 214,000. That is a huge number of deaths from two single attacks, and a number that has been etched into my mind since I was a child. So when I read Moran’s story, I couldn’t figure out the logic. 

You see, chlorine rail tank cars “go-up” all the time. In the past year, I can remember several derailments around the country that caused chlorine releases, but for the life of me I don’t remember 200,000 plus deaths occurring anywhere. And usually I would notice that number of people dying all at once. 

I called Moran to ask him about this, but when I didn’t hear back from him I decided to do a bit of research just in case I missed something this monumental. Nope, I didn’t. The most deaths from a single chlorine release that I could find was 27 in China. I couldn’t find any related to a release from a chlorine railcar, though I did find a lot of information about releases from derailments. 

So where did Moran come up with his horrendous numbers? From the EPA and the Department of Homeland Security, of course. He was simply too lazy to check and see if those numbers made any sense in the real world. 

Moran’s second big mistake was to not realize that he was being played by Kuehne Chemical. Kuehne’s president, Don Nicolai, told Moran that he could make his plant safer by modernizing it. He applied for a $50 million grant to do so from the Department of Homeland Security which was rejected. Moran implies this doesn’t make a lot of sense given the threat. He seems to think that it was a much better idea to use taxpayer funds to modernize a private business. I’m sure there are a lot of businesses out there that would like this kind of largess. 

The second Star-Ledger story was written by Joe Ryan on March 23 and entitled “Report: 2 Linden plants are polluters.” In the story, Ryan notes that according to a report issued by the New Jersey Public Interest Research Group and the New Jersey Work Environment Council, the Linden Cogeneration Plant of Cogen Technologies released 232,000 pounds of harmful substances into the air in 2004, making it the ninth largest polluter in the state. What Ryan neglected to check, however, is what was released and why. 

Cogen Technologies is one of the most advanced and technologically sophisticated power generators in the country. It produces a lot of power. In doing so, it uses a catalytic converter to remove pollutants from its exhaust. As part of the process, it sprays the exhaust with ammonia, which traps the particles that cause air pollution. The ammonia is then vaporized and goes up the stack at a rate of five parts per million. 

This process was developed in conjunction with the U.S. Environmental Protection Agency and the N.J. Department of Environmental Protection and is considered state-of-the-art. The resulting emissions are in fact government mandated as the best way to assure air quality. 

It would be really nice if my colleagues at The Star-Ledger would spend a bit more time to get it right.

James Coyle

President

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The purpose of our education system is to prepare young minds for the travails that will be faced in adulthood.  According to a recent study released by the US Chamber of Commerce entitled “Leaders and Laggards: A State-by-State Report Card on Educational Effectiveness,” it is a task at which most states fail abysmally.  

Interestingly, New Jersey is among the leaders, not the laggards, at least in most the categories evaluated. 

Academic achievement is always the area that is considered most important when reviewing school performance.  The US Chamber study used reading and math scores of 4^th and 8^th graders on the federally sponsored National Assessment for Educational Progress (NAEP).  New Jersey received an “A” with the fifth highest score in the country.  Only Massachusetts, Minnesota, New Hampshire and Vermont scored higher. 

When I mentioned this to my wife, her response was probably the same as most of you; “well of course, you have some super schools like in Millburn and Berkley Heights and Summit and they raise the average.  Most schools are nowhere near that good.” 

But, another metric used by the US Chamber broke out the academic performance of low-income and minority students.  By this measure, New Jersey had the 11^th best achievement nationally.  This is somewhat misleading, however, because most of the states in the top ten have very small minority and populations.  These include states like Wyoming, Kansas and Idaho.  Only Texas and Florida did better than New Jersey and had larger minority numbers. 

In my view, however, the metric for postsecondary and workforce readiness is the most important measure of the success of the school system.  This measure really gets at how effective the schools are at the end, when kids graduate.  Postsecondary and workforce readiness use performance on Advance Placement exams, high school graduation rates and the chances a student will attend college by age 19 to determine the overall measure of readiness. 

By this measure, New Jersey is the best in the country followed by Connecticut and Massachusetts.  New Jersey has the highest graduation rate at 85 percent.  It also has the second highest percentage of 9^th graders who finish high school in four years and attend college; 54 percent.  As for the AP exams, New Jersey has the 8^th best record. 

I have to admit that I was blown away when I read these numbers.  I probably shouldn’t have been quite so surprised, however.  My son recently completed a battery of high school entrance exams.  When compared to his peers in New Jersey, he did just ok.  When compared to all the students who took the exam nationally, he looked much better.  New Jersey parents tend to hold their kids to high standards, and it pays off. 

There was one other measure in the US Chamber report that is important to examine, return on investment.  How much did it cost to achieve the performance measured?  In this category, New Jersey is at the bottom of the list.  Even adjusted for cost of living, New Jersey’s cost to educate a student was $9,888, an amount exceeded in only Vermont. 

Thus, although we are getting what we want, we are paying way too much to get it.  That’s nothing new though; we’ve all known that for years.

The US Chamber study can be found at www.uschamber.com/reportcard.  It is a fascinating report to peruse.

James Coyle

President

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“The people won,” said Senate President Richard J. Codey, referring to the passage of the new property tax rebate program for New Jersey. What he really meant was that the incumbent legislators won, as once again the wool has been pulled over the eyes of the state’s taxpayers.

The process of watching the governor and the legislature work on reforming New Jersey’s infamously repressive property tax system has been one of the most depressing spectacles that I have ever witnessed. As Otto von Bismarck said, “Laws are like sausages, it is better not to see them being made.” Unfortunately, this process has played out in full view.

Let’s review how we got to this sorry state. Last summer, the governor and the legislature couldn’t agree on the state’s budget, so they shut down the government for several days, which no one outside of Atlantic City even noticed. Afraid of the wrath of the slot zombies, both sides caved and raised the sales tax to 7 percent.

The compromise was that half the increase was to be used to close the deficit and half was to be used for property tax relief. The governor also tasked the legislature to come up with ways to cut costs. Numerous legislative committees were formed to examine a range of government expenditures from pensions to shared services to dual office holding.

Amazingly, these committees actually did some good work. For once, they seemed to focus on the public good rather than the special interests. Most amazing was that they came up with ideas that were in direct conflict with their own selfish self-interests. They identified overly generous health and pension benefits as major cost drivers, even though they receive those benefits like every other state employee.

The legislature actually started out to be bold as the governor asked them to be. However, he soon let it be known that he wasn’t going to be bold back. Governor Corzine unfortunately had other, narrower interests to please, and when he stopped the legislature from addressing benefits and pensions, it became clear that he was going to put those interests first.

This opened the floodgates. Once the governor pulled the rug from under benefit reform to appease the demands of government employees, every other interest group started lobbying to keep their perks as well. The guys I especially love are the mayors/legislators (sometimes called thugs) from Hudson County who didn’t want to give up their double paychecks, and so thwarted those reform measures.

But wait, the legislature still needed a bold way to get re-elected in spite of their failures, and they saw one in a proposal to cut property taxes by 20 percent. The only problem was that since there was no reform, the tax cut wasn’t really a tax cut, because there were no savings in any area. The idea was enticing enough, however, to completely refocus the discussion away from the underlying government reform

So, we have what is called a 20 percent tax cut passed by the legislature and expected to be signed by the governor. Really though, no one’s property taxes are going to go down. For a short time, until we re-elect our valiant legislators, some of us will get a tax rebate. When next year’s budget is in deficit again, however, we can expect it to disappear.

Political pandering is such a marvelous accomplishment. We should all be proud of the people we elect.  

No one has “won” anything, Mr. Codey.

James Coyle

President

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My God, the current majority party in the New Jersey Legislature is sounding just like the former majority party in the US Congress when it comes to crowing about bogus, irresponsible tax cuts:

We're almost there. We're almost at the finish line. We know it's essential to get this problem solved."  Assembly Speaker Joseph Roberts Jr., D-Camden, on legislative efforts to cut property taxes.

"I'm positive, absolutely 100 percent positive." _ Senate President Richard J. Codey, on prospects that property tax reforms will soon pass the Legislature.

"At the end of the day, we will be judged by whether or not this state is in better condition."  Assembly Majority Leader Bonnie Watson Coleman, D-Ewing.

all said to the AP after Governor Jon Corzine’s State of the State speech last week.

Now I am not opposed to tax cuts, but the proposal to cut property taxes by 20 percent is as shamefully misleading as any politician has ever come up with.  It is a shell game to end all shell games.

If you take a close look, there really isn’t a tax cut, what we are talking about is a tax rebate.  Last summer our sales tax was increased to 7 percent.  The proposal is to take the revenue generated from this increase, plus more, to be able to give homeowners their rebate.  Taxes are not being cut, only refunded.

Second, the talk of a 20 percent cut is also misleading.  If you make less than $100,000 your rebate will be just over $1,000 based on the average property tax bill of $5,400.  If you pay $25,000 like I do, the rebate will be only about 4 percent, a far cry from the 20 percent they are advertising.

Also, if your household income is over $100,000, the rebate reduces dramatically, and in New Jersey this will catch most of the homeowners in our sprawling suburbs.  At $250,000 annual family income, the rebate disappears completely.

On top of this, no rebate is planned for the businesses that pay New Jersey’s outlandish property taxes.  Keeping businesses healthy and viable should be of the greatest concern because they provide the jobs that provide the income that allow all of us to pay our property taxes in the first place.  The Corzine/Codey/Roberts plan is in fact a tax increase for businesses because it raises the real business property tax rate relative to other landowners.   

Ironically, the funding for the rebate program will fall proportionately higher on the backs of the urban poor.  How can that be?  Well, the poor spend a higher percentage of their income on consumables for which they pay sales tax.  Thus, they pay a proportionately higher share of the sales taxes that are now going to be rebated to property owners.

Jon Corzine is often described as a financial wizard, and truly he is.  However, it must be kept in mind that Wall Street wizards are great at moving money around and taking a bit for themselves.  What they don’t do is create anything.  They are great players of the shell game, and Jon Corzine is certainly the master of that universe.

It would be nice if our Governor would find a way to cut spending by reining in public employee benefit costs instead of eyeing the White House.  Then we might really be able to have a tax cut.

James Coyle

President

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President’s Message – January 2007

I didn’t know at the time that I wrote last month’s column on consumer driven health care that I would need to do a part two, but numerous reader comments regarding my message were so on target, that I feel I did not really do the topic justice. 

My intent last month was to point out how the government puts roadblocks in the way of many people being able to use consumer driven health plans.  It is kind of a recurring theme for me that so often government policies have the perverse side effect of actually discouraging things that they should encourage.  On the other hand I do strongly support the personal choice and responsibility that goes along with a consumer driven health plan. 

The problem, as was so clearly pointed out to me, is that obtaining information that allows you to make an informed personal choice is more lacking in the healthcare industry than anywhere else in the economy.  How many of us are really able to tell if we really need that operation, and whether the hospital that we are going to is really the best place?  Or how do we know that there is a generic formulation of a drug that will save us a lot?  It is extremely hard to tell. 

Recently, I decided to change my personal doctor.  I had been at a practice for 15 years, and though I had been dissatisfied for years, the thought of finding someone new was daunting.  Finally, my old practice made such an error that I felt I could no longer stay, but I was at a real loss on how to find someone new.  Should I ask my neighbor or co-worker?  Really are they the best reference?   

In the end, I was able to call the senior management at one of our member hospitals to get a recommendation.  I was lucky, I got a good one.  I am very happy with my new doctor, but I also realize that most people do not have as extensive as a network as I do, and thus obtaining information and referrals is much more difficult. 

One of the calls I received on last month’s column was from the US Department of Health and Human Services.  I had no idea my column was being that widely read, but they too are very concerned with this paucity of information.  The Secretary’s office wanted to let me know that they were in the process of developing a solution, which they call Value-Driven Health Care. 

The Value-Driven Health Care initiative is, at its core, an information system designed to bring transparency to the health care marketplace.  The system is envisioned to bring the health care industry out of the shadows, and into the electronic information age. 

As described to me, the initiative is based on four cornerstones.  One of the cornerstones it to collect, measure and publish information on the quality of services delivered by doctors and hospitals.  New Jersey last year published a report on hospitals that, though limited to two procedures, was a great start.  HHS envisions a much more elaborate system.  This type of information will force providers to achieve higher standards.  As HHS Secretary Mike Leavitt says, “every case, every procedure, has an outcome.” 

The second cornerstone is to publish price and cost information.  Can you get the same thing done cheaper by traveling a bit, or even just going to the hospital across town?  Is it better to fill your prescription at Costco or the corner CVS?  Is your non-network doctor’s fee standard and customary or is it way out of line?  Is that worth it to you?  Is your insurance company’s measure of standard and customary accurate, or are they way under the market? 

James Coyle

President

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