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The State of NJ: Not Earning All its Money. Not Earning All its Reputation

It’s awfully tempting to read this morning’s Special Report in The Trentonian as another in a long, long series of articles critical of the managerial expertise – or, rather, the absence thereof – shown by the Administration of Tony F. Mack. It is that, actually. But the article must be read in a context that acknowledges that the  “State Aid” spoken of in the article is currently considered by many towns in the state as municipal funds confiscated by the State and being improperly administered by the state Administration of Governor Chris Christie.

In brief – and there is no reason to duplicate the  reporting of Anthony Campisi – the article picks up and expands what was reported as news in March: that Trenton’s poor fiscal and managerial performance over the last two years has not qualified the city for inclusion with a group of some other NJ municipalities for having part of their state Transitional Aid awards converted into permanent state aid under the NJ “Consolidated Municipal Property Tax Relief Aid” (CMPTRA” program. This program is how most towns and cities in the state receive much of their state aid.

By failing to qualify to have some of its state aid qualify for CMPTRA, New Jersey has told Trenton that it is not as fiscally and managerially responsible under the Mack Administration as have been the towns of Lawnside, Asbury Park, Chesilhurst, Harrison. And Camden. Trenton is not as responsible as Camden! That has to hurt.

The City won’t have another opportunity to be reviewed for inclusion in the CMPTRA program until next year, when presumably the Mack Administration’ performance will improve to the point where we can belong to the same club as Asbury Park, Harrison, and yes! Camden.

According to this morning’s Trentonian, one of the state’s main criticisms of the Mack Administration is that – Surprise! – “significant turnover in City of Trenton management” make it difficult to feel confident about the competence of our city government. State Department of Community Affairs (DCA) spokesperson Lisa Ryan is quoted as saying, “DCA has consistently stated that it wants to see sound management in place in Trenton.”

In response, Mayor Mack as usual denies any problems. The Trentonian reports “Mack, in an interview,denied he ever violated the city’s agreements with the state, arguing that ‘the city has been in compliance with the MOU’ and has been able to ‘work out’ any problems with DCA.” Uh huh. Right.You know better!

So, yes, the article today repeats and expands upon the 2-month-old news that Trenton hasn’t qualified for the Transitional Aid to CMPTRA conversion. And therefore the headline that New Jersey is “punishing” the City has some validity.Yes, Tony Mack continues to screw up. And yes, as the Trentonian’s headline suggests, every day that he continues as Mayor costs the City and its taxpayers as well as the taxpayers of the entire State of New Jersey who support our Trenton and its schools with hundreds of millions of dollars every year.

But I do want to say a couple of things about the role of the State and this CMPTRA money. The Trentonian article paints the role of the State and of Governor Chris Christie in generally very complimentary colors. This article, and a lot of press about the State and the Governor treat the CMPTRA money and the manner in which they dole out funds to towns as consistent with the Governor’s tough, take-no-prisoners, hard-line management style that’s been a  big part of his image. In this way, CMPTRA money is seen as almost a reward to towns that toe the Governor’s line, as generous direct state financial aid.

CMPTRA, along with a similar “state” tax, the “Energy Tax Receipts” (ETR) mechanism, are actually intended as funds belonging to municipalities. They are collected and held by the State ostensibly on the sole behalf of cities and towns, to be distributed back to municipalities on a pass-through basis. That is, the State is not supposed to treat these funds as State money,, to be disbursed according to State priorities.

But – and this precedes the Christie Administration – the State of New Jersey has been doing just that. Last year, the NJ League of Municipalities estimated that nearly $900 Million in funds that should have been sent back to the towns was kept by the State to help balance its budget.  Over the ten prior years, the total was cited as close to $3.4 Billion. The League hosts a link to this presentation prepared by the Borough of Wharton explaining the issue; all the numbers apply to Wharton, but the overall problem is shared by most NJ towns.

Clearly, this practice of state diversion of municipal funds predates the Christie Administration, but the pace of those diversions has greatly increased: almost 1/4 of the ten-year total was from 2011 alone.

In Trenton’s case, I don’t think that there is really much money properly ours that has been kept by the State. We are such a basket case generally that we are surely a net recipient of more state funds than we’d be entitled to under normal circumstances.

So, why go into all of this? I suppose it’s that at some point, hearing so much about what a wonderful job that the Christie Administration is doing with state finances rankles more than a little bit, especially when it partially balances the State’s books with money that arguably does not belong to it.

And another reason is that, in Trenton’s case, the State really isn’t earning a reputation for being such a fiscal watchdog. As critical as it has been of the Mack Administration, I think there is much – too much – that the Mackers have been getting away with. In hiring and other personnel moves, contracting, and budgetary matters, I feel the State could be more involved proactively in some items to forestall and prevent some moves; rather than after the fact penalize the City in such a broad manner as cutting overall funding levels. I would prefer the State to work with a scalpel rather than a sledgehammer. I do understand, though, that DCA is a small department and probably not equipped to be so involved with city affairs on such a micro level.

It is unfortunate, however, that the State chose to construct a review process and write an MOU that did suggest that ongoing review of the city’s management would be more intimate than it has proved to be. I think the result has only been to embolden the Administration to basically get away with as much as it can, as long as it can.

Overall, I don’t mind stories in the press that call out the Mack Administration for its horrible record, and the daily cost to the citizens of this city and state. I do mind if those stories also serve to burnish the reputation of the State of New Jersey for fiscal and managerial rectitude it doesn’t deserve.

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