Gov. Jim McGreevey speech on Property Tax Relief reactions, tape 2 of 2

No, that is so not working on contract reform with the provider communities. We've had groups looking at that and we're close to coming forward with an overall package of contract reform, eliminating onerous burdens and requirements. There's some elements that still need to be ironed out and discussed. There's a question about accruals, for example, at the end of a year and a contract, you know, and should those accruals come back to the state or could the provider community continue to have those year and contract accruals used for the benefit of the services that they're provided and the people that are providing those services within those agencies. And then the other thing that we're going to do is work with the provider community to look at all unfunded mandates that we as a department and as a state have imposed on them and if we can relieve them of the burden of those requirements, those unfunded requirements, the paperwork requirements, report requirements, whatever the case might

be and we're going to have this dialogue, then I want to move in the direction of doing that in order to help relieve overall the whole question of economic pressure. The other thing is, you know, I've heard some people talk about the idea of perhaps looking at such things as the provider community's insurance and maybe there's a way that we can do pooled purchasing so that we can do a better job of helping them purchase their liability insurance in a more rational way in order to reduce the cost of providing care. So a lot of things that we need to look at, but I think if you, everybody will say that's all well and good and we're going to move in that direction, but I think it's about the money. As it always is, I'm confident that your department will, as you've already expressed, show in be innovative and creative and not just finding other avenues but in maintaining,

we really need to maintain and preserve what's working and I think that's so important and we can't lose sight of that. Just one more question, I wanted to clarify something, you had said in your statement regarding family care and I think you had said, correct me if I'm wrong, that the number of children in the world has... That way, it's not going to be a plan that can be clocked every time in the administration are you saying, you can cut school age, you can cut municipal aid, I mean, what it is, he's stopping the bleeding and he said that, we're stopping the bleeding right now while

we look for the long term solution. I think that's proper, that's bold, he's talking about camping, government at all levels at 2.5% keeping level of spending so the property taxes don't go up, we must stop the bleeding before we can talk about long term solutions. Let me ask you something in the loan, did you imply that you prefer a millionaires tax if it went to school aid and municipal aid then if it goes directly into tax payers pockets all along that I said I would be more than willing to sit down and discuss and in some cases possibly support a tax if I knew for certain number one that it was going to property tax payers and it was going to reduce property taxes. This is not reducing property taxes and any property tax payer who believes that this is going to reduce their property taxes needs to go to some other planet because they're not on in this world. Senator let's tell, do you think that the Republican Senate or the 18 members of your caucus will all oppose this plan or might a couple of them support it?

Well, I think when they see what it contains they'll support part of it and oppose the rest of it. The hard thing to tell you at this time is where they stand because we haven't had a chance to talk about it. Senator, this reminds me of Florio's budget, I think it was 1995 somewhere around there. Act two, scene one. Senator Bryant, your colleague, Senator Madden, came out this week and said he couldn't support the millionaires tax or any hike in an income tax. You need all 21 other Democrats to pass the bill. Are there concerns about that bill in your caucus? Well, I think as someone on Greenwall said, he basically, this is just starting to dialogue even in our caucus.

I mean, this is proposable by the government, but we haven't come to conclusions. We don't want to work out the details. I think even with Senator Madden, Senator Madden, you had to put it in context. He basically said he couldn't support a rise in the income tax if in fact it wasn't meaningful spending relief. So I mean, if this is meaningful spending relief and he's convinced of that, I think he might end up supporting that millionaires ought to take part of their windfall and invest back in New Jersey. Senator LaTelle, Senator Bryant, Assemblyman Greenwall, Assemblyman Malone. Thank you all very much. This has been the legislative response to the governor's special address on property tax relief. I'm Michael Aaron. Back to you, Ken. Thank you, Michael. And we're back here in our NJN studios with Roger Bodman and Brick Thigpen. And let me ask you both your reaction to the legislative response. Roger, starting with you, the 2.5 percent cap the governor is proposing on school spending in districts. Can that work and your reaction in general to what you've heard? Well, like I said earlier, Ken, we've heard a lot of this before.

You know, these Robin Hood style rebate programs are by definition a gimmick. And they don't solve the underlying problem. And as I just mentioned, when, when, when, when, when, when, when, when was governor, they raised, they, they, they enacted the tax, when the floor was governor, they doubled it. None of this resulted in property tax reform. We've had, we've had these types of caps before. They don't appear to have held down a property tax increases. Assemblyman Greenwald just mentioned it went up approximately 6 percent this year and seven and a half percent or whatever last year. And clearly is a huge problem. So I just think it's a band-aid approach and, and the whole issue of whether the convention works, of course, they're delaying it until governor McGreeby is presumably safely reelected. And two, you know, is it, is it going to really deal with the underlying structural problems? I think it's fair to suggest given the history of the state on the income tax issue and its lack of ability to reduce property taxes that there's a lot of people out there, including myself who are enormously skeptical. Rick, is, is this good politics on the part of the governor who likely is going to run

for re-election in, in the next year or is it a real reform? This is bold policy, definitely. The politics he's playing with some fire, there's no question about it, and it shows how serious the problem is. Starting this on the ballot with him in 2005, it's not clear what the consequences are going to be. It really depends on how this debate gets managed and how people feel about it during the run-up. It could bring voters to the polls who he doesn't want at the polls ordinarily and it could be a problem for him. And second, like Senator LaTelle said, a constitutional convention could be a Pandora's box if it's, if we're not careful. Once they get themselves convened and they choose to search through the state government but they want to take the delegates who would be selected, who Senator LaTelle alluded to then give up control and answering to the legislature, to the governor, they act as a body in a constitutional convention. Unless the leadership, starting with the governor, can guarantee that people, they're

not unleashing, so to speak, a hungry dog on the state of New Jersey, this could be something that frightens people. They have a big challenge to manage this process and keep it under control. It could be a Pandora's box, it could really be a problem, and it could be a fabulous success if they're able to manage it successfully because it's a huge problem. People want property tax relief and he's willing to take the chance to do it. I don't, I wouldn't suggest that this is a politically risky to the governor because none of this he just mentioned is going to happen to laughter. He's presumably safely reelected if in fact the vote, because it's not going to take place till 05 when he's himself is on the valetary election. What's politically beneficial to him is the fact that they're taking some people's money and giving them to others. It's the Robin Hood aspect of this thing. It is income transfer. It is the core of democratic public policy to take some people's money and give it to someone else. So that's enormously popular. Like I said, if each of you would write, written here, check for $500, I'd answer any poll question to say it's a great idea. Would you vote for McGreevy? No, probably not, but I'd take your $500 anyway, so that's a bottom line.

So he juice, I need to get that taste of some great stuff. So where does this all go for here for the governor? He has to sell this, and we haven't even touched upon the fact that the speaker, the Senate decoding does not sign on to the Constitutional Conventional idea. He is against it. Well, here we go. It goes forward. That's where it goes. He's got a tough process to manage, keeping these legislators together as like hurting cats. There's no question about that. And we're going to see, can we get a single Republican vote for real property tax relief for the voters in New Jersey, or are we going to hear talk about Robin Hood? That's going to be a challenge for the governor to manage that process. And will this Constitutional Convention be viewed as real reform, constructive, or the chance of opening a Pandora's box? People see it as real reform. Our governor's really going to be sitting pretty. And it is politically risky because it will be on the ballot with him who we're going to come to the polls to vote on this Constitutional Convention.

Will it be people who are supporting McGreevy or is going to be others? We saw the Republicans put on a display in solidarity today at the beginning of the governor's speech. Understood. And I think you'll see that going forward. We've seen this all before. It's just wrapped in a new set of clothing. All right. Roger and Rick, as always, thank you very much for being with us today and sharing your perspectives. And that concludes our coverage of Governor McGreevy's address on property tax relief to a joint session of the state legislature, NJN will re-broadcast the governor's speech at 10 p.m. tonight. And we will have more on the governor's address tonight on NJN News at 6, 7, 30, and 11 o'clock. Thanks so much for joining us. Yes, I'm Kent Maddahan. Is that your daughter?

Yes. Wow. Have a nice Opening program please. Okay. OK, Commissioner, I'm coping on the issue with the two coalition air at 4. they want to open it up and open it up. In your role of private commissioner, I imagine that you work with me to some of the discussions in crafting that first budget proposal. That's because things weren't looking as optimistic revenue rise as they are now, correct? I would say that.

When we were crafting the budget initially working with the treasurer, and even the first few days that I was involved as the acting commissioner of the Department of Human Services, and having to deal right away with the budget proposal from the department, we worked real hard with the treasurer, these supportive and his staff, to include at least a 1% cost of providing care in the proposed budget. At the time, everybody was working real hard because we were confronting a $4 billion shortfall by trying to find the revenues to support the budget and making cuts in other service delivery changes in order to facilitate that $4 billion shortfall. But obviously, and I've learned this now that I've been a couple of months on this job, that the social service providers who are integral to the whole system of providing care, social service care, to the most vulnerable people of our society,

aren't making ends meet, they need help, they need their costs are rising, the requirements that are being placed on them are rising, demands are rising, something's got to give, and what they're asking for is a 4% cost of providing care, 1% is not enough, and I've heard the committee today and the senators on a bipartisan basis express bipartisan support to increase funding so that the providers that we're dealing with have the wherewithal, the financial resources and assets to provide the job, that we're asking them to provide. I think they're both on bipartisan, they're both saying that it's 4% too much, is that too much for us to afford a physical funding? You know what, they have to look at that, it's a tough job being a legislator, it's a tough job in a state treasure, it's a tough job being a commissioner, it's easy being a governor,

it's easy being a commissioner and saying, yeah, they need 4%, these legislators got less of them, they have to look at everything holistically with respect to the entire budget and find out what the right number is, and I'm sure that they will do that as they go through this process. Just briefly, the prescription, the proposal for the prescription, for the $2,000, okay. How much would that generate for the budget, is that? That's a cost savings of approximately $8.1 million. And it was crafted, you know, is it the greatest proposal in the world? No, but again, within a total context of trying to close a $4 billion shortfall, wall departments were asked to find cost efficiencies and cost savings, and this is one area, when you look at prescription drugs in the state budget, and it's not just in our department,

but if you look at the state health benefits program and what, I mean, prescription drugs are the fastest rising cost of service delivery in the budget. It's increasing at exorbitant rates, and we're not doing what other states are doing. We're not doing a preferred drug list, we're not doing a restrictive formulae. Formulary, we're doing, we tried to come up with, what we thought was a fair, equitable, modest, co-pay, a $2 co-pay with a $10 per month cap in order to achieve at least some measure of savings for this particular aspect of medical coverage that is rising exorbitantly, but at the same time, try to do it with some sense of fairness and compassion. I think considering the more optimistic outlook that it's still something that the state needs to do. I, you know what, I'm going to leave that to the legislator's working in conjunction with the treasure. Now that I'm not working in the governor's offices,

the way I used to, I don't have the whole sense of how the revenue numbers are looking at the economy. I sense that they're doing much better because through this governor's budget, he's been able to provide for new investments in areas that, you know, particularly in the area of children and the whole reform of the child welfare system, and he's also provided for other investments in higher education as well. But they've got to look at that question about whether the revenues are such that they kind of accommodate the idea of eliminating the prescription drug co-pay. I don't know that answer, that's a decision that they're going to have to grapple with working with the governor and the treasure. Maybe for the two-shot jam, I'm just going to ask you quickly about Daniel. Well, if there's a problem, we're going to have a break for Daniel. I'm sorry, you know. How much is a paper for Daniel? No, I think you could know it's what's appropriate, it's $5 million to do quality of service

to live very improvements at New Lisbon. And that's new training, that's the federal government. No, Daniel situation, right? There he is. Right, more seconds. OK. It's a big grief. OK. You know, I want more or 1% increase for these caregivers. 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for this character. 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding in this area flat last year, both Democratic and Republican members here today voice support for a bigger increase. But both question, just how much is realistic? Get it going.

Put it on. Put it on. Do you want to wipe out? Yeah, let's do that. Yeah, it's good. Beautiful. Thank you much. Thank you. 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding to this area flat last year, both. We're just blew straight up for a minute. Oh, hello. I'll just keep it real short. Pretty wide, like to your waist, OK? OK, so I should close it. OK, 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding to this area flat last year, both Democratic and Republican members voice support today for a bigger increase. But both question, just how much is realistic?

3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding to this area flat last year, both Democratic and Republican members today, voice support for a bigger increase. But both question, how much is realistic? I'm in Bryant. Chairman Bryant says many budget decisions will remain in the state of flux until the state. The state understands it's still the state determines. It's actual bottom line, but it won't be known. I'll just do the one I was doing. 3, whenever you're ready. 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding to this area flat last year. I have a bad feeling about this,

but you think it looks OK? OK. 3, 2, 1. Governor McGreeby's budget proposal includes a $20 million or 1% increase for these caregivers. This, after keeping funding to that area flat last year, both Democratic and Republican members voice support today for a bigger increase. But both question, how much is realistic? Realistic. Yeah, let's wrap this up. The teams could move. So we're going to do everything we can to try to put something within our means on the table that perhaps can salvage this situation. It has never made sense to me to talk about the retention of professional sports in a metal language that's not work. You, myself and others, we are tired of going there. And by the time we get now seated, it's the first quarter of the basketball game. You drive all the way over, and they say,

go back to the other side, parked by a giant stadium. Then you got a debate. Do you walk over that bridge? Do you wait for the show? But I can tell you one thing, by the time you get in your seat, it's halfway through the first quarter. Mayor James continues to say that Newark would be the better place for a sports arena. What's happening here with the sale of the nets? What's the likelihood that they're actually going to be sold to somebody who's going to move them to Brooklyn or Long Island? Well, isn't it the owners don't know that? So I don't know how we would know that. They're fighting with each other, and each person is trying to find the best deal to get out the door, who wants to get out the door, or stay in the game if they bring in the right players. And then the location of the teams become part of it. What I find fascinating is that it wasn't too long ago that we were hearing, let them go. Let them go, because then we make more money off the arena from non-basketball hockey. Who was saying that? People who were working with the metallands. They lose money on the arena because of the bad contracts

they have with the hockey and basketball teams, and they make money on the circus and the concerts and all those things. When there was this talk about putting them in the garden, they said, great, because now the garden will be booked up for twice as many more dates. Everybody will be coming to the continental arena. We'll make all the money. But there's some value in having professional sports franchises in the state, and it seems as if the governor has come around to that view, if he ever had any other view, when he's trying to keep the teams here. We just had the nets go to the finals, and the devils build the standing cup, and I just didn't get the feeling in New Jersey of any kind of like, hey, there are teams. You know what I mean? It just wasn't there. For some fans, it was, you know, for people. But it just, it doesn't seem to me to be the Jersey icon that some people feel it is. They have a certain fan base, and it grows, but agonizingly slowly. And I think that there are people involved with the teams who are tired of how slowly it grows, and they're tired of losing money, understandably. And they'd be willing to go, take the teams to Brooklyn,

take the teams to Long Island. And there's a certain amount of prestige that comes with having professional sports teams, and I don't know that the governor wants to be the governor when they lose those teams. I think to a certain extent, though, this debate got wrapped around sharp James, and his arena, rather than, and to a certain degree, some racial politics, you know, urban versus suburban. And the debate over whether it's important to have a sports team in the state kind of got lost in all that, and whether government should chip in to make that happen. And I don't know that that's going to be resolved from what I've heard, you know, even though he's saying it's coming to Norfolk, it's not dead yet in Norfolk. Others have said to me, it is dead in Norfolk. Well, Ray Chambers, one of the owners of the Yankee Nets, is apparently still trying to figure out a way to salvage a Newark arena, which James calls a New Jersey arena, not a Newark arena, like the New Jersey Performing Arts Center.

And there's, at least Ray Chambers and Sharp James are still trying to make it work, is what I understand. Don't forget, they were originally the New York Nets, and they played in the National Colosseum, and a bunch of New Jersey investors lured them into the Netherlands. I mean, there's always the possibility that the right investment team and the right business model will get them into Newark. What I find puzzling is the governor's office suddenly saying, let's renovate the sports arena now to keep them there, because that never seemed to be the message before. In fact, the message was, we'll come up with a redevelopment plan that's a bad use of real estate anyway. We want to dump the debt that's sitting there on the arena. And the key words in your software interview were that we can afford. So we'll have to see what he comes up with. But I don't know how much they really want to dump a lot more public debt into this building. We have one minute left, and I have one more subject, Mike Jennings, you wrote about the state budget, and you wrote about it being in trouble next year. How bad does the red ink look next year

compared to what we just went through? Well, probably in absolute terms, it's probably no worse than what we went through. But it's sort of like we don't have any more wiggle room. We've used up all of the easy sort of solutions to the problem. So I think that's really more about it. In the past few years, we've made some cuts, but the pain has been pretty minimal. Now, there's sort of like the pain is coming. There's really no way around ducking it. And one of the big areas, I think, where that will emerge is on the whole issue of the Abbott school districts. Because this year, they sort of got a partial reprieve from the New Jersey Supreme Court. They didn't have to put as much money in it as originally thought. And now, if they have another year of budget problems, those districts will be again saying, hey, we haven't gotten what we're supposed to get. Where is McGreevy on this? And why isn't he doing more for some of these urban school districts? Oh, no, no, no, no, no, no, no, no, no. That is the suburban district saying we're broken. We're getting really destroyed.

All right, well, it looks like we'll have a budget crisis to kick around next year. On that note, I want to thank you all, Kathy, Mike Herb. We'll be back with another roundtable next Friday night. It's 6.30 and Sunday morning at 11.30. On this week's edition of On the Record, sports next position authority, chief George Offinger, on the effort to keep the nets in New Jersey. See you next week. Reporters roundtable with Michael Aaron made possible by PSCNG. Serving customers strengthening the business community and investing in New Jersey's future. And by the New Jersey Department of Transportation, Division of Aeronautics, helping to meet the air transportation needs of business and the citizens of New Jersey for over 70 years.