As e-mailed 9-25-14:
Dear Mayor Jackson:
For much of the last three months, I have been mostly cautiously optimistic that your new administration is making a promising start to unwinding the massive damage to the City of Trenton and its local government sustained over the last four years. You’ve started to rehabilitate the City’s reputation. It has a long, long way to go, but I’ve generally feel encouraged.
However, amid the many positive signs of progress – the mostly drama-free appointment of department directors and senior staff, early success in winning key grants to help restore the town’s public safety departments, a transition report that lays out an ambitious agenda for your team, mending relationships with Trenton’s neighbors in the County and the State – I still find too many frequent nagging indications that much of the Same Old Business As Usual is back in effect. These are troubling to me, and threaten to undermine a lot of your early progress. Specifically, I refer to the ongoing leftover baggage from your campaign finances that I have been bothered with for months.
Contributions to your campaign from the ICE PAC Political Action Committee and its close association with the Long Marmero law firm raised questions of conflicts of interest and violations of the spirit if not the letter of the city’s Pay-to-Play (P2P) Ordinance in the first weeks of your administration.
The donation to your campaign was specifically cited by the Executive Director of the NJ Election Law Enforcement Commission (ELEC) in his call to strengthen New Jersey’s statewide P2P legislation. In his August 14 article in PolitickerNJ.com, ELEC’s Jeff Brindle sees the need for new legislation to “offset some of the increasing influence of independent groups over our electoral system…[and] help to dispel the confusion that often reigns at the local level of politics as evidenced by the situation in Trenton.”
So, to outside but knowledgeable observers we still have a “situation in Trenton!” And unfortunately, for the many signs of forward movement, there is still some leftover baggage from your campaign that, unless corrected, will continue to suggest we will have a “situation” here for some time to come.
Baggage such as we read in today’s Trenton Times. In Jenna Pizzi’s story about the reconstitution and first meeting of the “Mayor’s Economic Advisory Council,” Ms. Pizzi reports that one of the members of this Council is former Senator Robert Torricelli. Mr. Torricelli generously contributed to your mayoral campaign. There is nothing wrong with that by itself.
But Mr. Torricelli’s total contributions exceed the legal minimum allowed under state ELEC law. Unless and until your campaign returns the excess amount – $1,000 – I do not believe it is appropriate for Mr. Torricelli to sit on your Council or any public body of the City of Trenton.
This should not be news to you. I wrote in this space back in April that Mr. Torricelli had, under his own name as well as that of his Woodrose Development LLC, donated to your campaign a total of $3,600, whereas the legal maximum permitted is only $2,600. I wrote on April 22, “Since the maximum donation allowable from any one individual for a campaign is $2600, Mr. Torricelli has exceeded the legal maximum by $1000. Mr. Jackson now has to refund an excess of $1000.”
I reported those numbers based on disclosures made by your campaign’s own ELEC reporting, should there be any doubt of the accuracy of that number.
However, from April 22 to today, as evidenced by your subsequent filings with ELEC, your campaign has failed to return the excess contribution as state law would require. You have not even acknowledged a problem with the excess contribution.
I don’t know why you have not yet done so. But if, as I would hope and expect, you want to focus on the early positive steps you and your Administration have been taking, you should swiftly take action which would help to get rid of much of the baggage carried over from your campaign.
Continuing to ignore this problem – as you have since April – you may risk clouding the productive things you are doing, and help perpetuate a feeling that despite the publicly visible forward motion there is still a “situation in Trenton” under the surface.
Whenever you do things like hold on to that excess money and let Mr. Torricelli sit on your Council, you do a disservice to Trenton’s citizens, and allow a perception that the bad old ethically suspect days are not all behind us.
I don’t want that. I can’t believe you want that either.
The Administration of Trenton Mayor Eric Jackson made a good move yesterday. Mr. Jackson now needs to make another.
A resolution to grant a $20,000 contract for legal services to the law firm of Long Marmero & Associates LLP has been pulled from tonight’s session of Trenton’s City Council, due to serious allegations of ethical violations on the part of the firm, allegations filed by the Office of Attorney Ethics (OAE) of the Supreme Court of New Jersey. Those allegations are serious enough that I can’t see the City moving forward with this contract proposal. That deal is Dead on Arrival.
The Administration pulled the resolution from tonight’s Council agenda after New Jersey blogger John Paff yesterday brought to light the complaint filed against the firm by the state on February 19 of this year. This filing alleges that a non-attorney administrator working for the firm spent over a 3-year period (2009-2012) nearly $200,000 of client trust account funds – funds which by law must be used only for client-related purposes – to pay other expenses for the firm. This included nearly $70,000 to cover bank account overdrafts (which is pretty remarkable!), a $27,000 payment to firm name partner Douglas Long, and $35K to cover a company payroll.
The firm responded in May with a formal brief filed with the state Supreme Court’s Ethics Committee in May, and the next step will be a hearing on the matter by the Committee. As of this morning, I have no knowledge that one has been scheduled.
In a separate statement reported this morning by Jenna Pizzi in her article for the Trenton Times, Mr. Marmero tried to minimize the severity of these charges, describing them as “several instances of bookkeeping in the past that did not meet technical requirements.”
Despite Mr. Marmero’s attempt to dismiss this as a “bookkeeping” problem, this is all serious stuff, which could lead to several sanctions against the firm, up to and including disbarment. A quick perusal of disciplinary actions taken by the OAE over the last several years readily demonstrates that. Mr. Marmero is whistling past the graveyard if he thinks that repeated trust account violations over three years are just failures to meet “technical requirements.”
The City absolutely correctly concluded that a law firm currently tainted as it is by these charges should not represent the City of Trenton in any new legal matters, and was justified in pulling the resolution. I applaud that action by the City’s Law Department.
It is now up to Mayor Jackson to take the next logical step. During his campaign this Spring, Mr. Jackson’s election fund accepted a February 25 donation of $8,200 made by “ICE PAC,” a political action committee formally known as “Initiate Civic Empowerment,” an entity very closely – in my mind, too closely – associated with Long Marmero. Albert Marmero, the firm’s other name partner, was Treasurer of the PAC for several years, yielding that position to another Long marmero employee. The address for the PAC is the same as the firm. Based on the available evidence, ICE PAC exists primarily as the political action arm of the Long Marmero firm.
The payment to Mr. Jackson – the maximum allowed by State Law – was made less than one week after the OAE filed its complaint. Although no Long Marmero firm funds were included in the contribution, the close association of the law firm’s principals and employees with the PAC surely taints it. He should return the PAC money.
Mr. Jackson should also return $2,600 he received from the Bridgeton Democratic Organization in February. This organization made the contribution to the Jackson campaign mere days after receiving a donation in the exact same amount from ICE PAC. Since the finances of the Bridgeton group are murky – having failed to submit required quarterly reporting to the state’s Election Law Enforcement Commission since 2008 – it is impossible to feel comfortable about this donation as well. I noted last month that the timing and sequence of donations from ICE PAC to Bridgeton to Jackson seemed too convenient to be coincidental. And that was before yesterday’s revelation of the state ethics complaint.
Both of these transactions have looked strange to me since April. The murkiness and the aroma have only increased since then. It’s not going to look any better any time soon. The Jackson Administration made a good move yesterday to cut ties with the Long Marmero firm. The Jackson Campaign needs to make a clean break as well. These two donations need to be returned ASAP.
I’ve repeatedly criticized Mr. Jackson and his campaign for this and other problems that the candidate, now Mayor, stubbornly refused to address. Despite some encouraging action and rhetoric coming out of City Hall from the still new Administration and its friends in county, state and federal government, incidents like these will cloud the Administration’s efforts if they continue to linger and are ignored until revelations like yesterday’s come into the light.
I also frequently quote Mr. Jackson’s own words on these matters, because they are true on their own, and because Mr. Jackson publicly and clearly set a high bar for his expectations for himself in office, and all those of his administration.
In March of this year, in the midst of the mayoral campaign, Candidate Jackson wrote, “[T]he next mayor has to lead by example. Municipal government is only as strong, ethical and transparent as its leader. The mayor must make it clear to every employee working for the city and its independent agencies that there is zero tolerance for corruption, personal enrichment or dishonesty.”
Mr. Jackson has an opportunity today to lead by example. He needs to show us what zero tolerance means to him.
He needs to return these two tainted donations.
A version of my Tuesday post on the loopholes in Trenton’s Pay-to-Play Ordinance has been published as an opinion piece in this morning’s Trenton Times. Thanks to the editors of The Times for recognizing the importance of this issue, and for giving me space in their print edition today.
The opinion piece was written and submitted before last night’s news that the proposed legal services contract with the Long Marmero & Associates law firm, as well as another proposal from the firm of Eric M. Bernstein & Associates, have been withdrawn from consideration at tonight’s City Council meeting, at the request of the NJ Department of Community Services (DCA). DCA asked to review the two contracts, likely as a result of the questions that have been raised about the relationship between Long Marmero and the ICE PAC Political Action Committee.
ICE PAC earlier this year made a donation to the Eric Jackson campaign on February 20 this year, Check #1056 in the amount of $8,200, the maximum allowable under state law. The Treasurer of ICE PAC is Albert Marmero, a name partner of the firm. The PAC’s address is the same as the Long Marmero firm. Eric Bernstein has been a contributor to ICE PAC for the last three years, according to records filed by the Committee with the NJ Election Law Enforcement Commission.
Mr. Marmero and David Minchello, Trenton’s Law Director, deny that these matters violate Trenton’s city ordinance, and are perfectly legal due to provisions in the city’s law that are effectively loopholes.
Still, DCA asked to review the situation, suspending these two proposed legal contracts, while allowing others tonight to be considered by Council. Director Minchello doesn’t see this move as a roadblock. In today’s Trenton Times article by Jenna Pizzi, Mr. Minchello is quoted as saying, “‘We hope to receive the approval of the DCA’… The additional review, he said, is ‘just in an abundance of caution.’”
Mr. Minchello should be prepared to wait a while for the result of that review. It’s likely to involve some investigation by ELEC on a couple of other ICE PAC-related transactions involving the Jackson campaign.
Back in April, in a piece discussing what I considered to be several puzzling items in Mr. Jackson’s campaign finances, I noticed a contribution from the “Bridgeton Democratic Organization” to Jackson’s campaign, in the amount of $2,600, on February 25 of this year, as can be seen on the Jackson ELEC report for the first three months of this year, filed on April 14 and available here.
I didn’t have a clue then, and still don’t, about what interest a municipal Democratic Committee in Cumberland County would possibly have in Trenton’s non-partisan mayoral election that would lead them to make such a large donation.
At the time I wrote that, I couldn’t look any further into that transaction, both because ICE PAC had not filed any of the legally-required reports with ELEC since 2012, and the Bridgeton Democratic Organization had not filed any ELEC reports since 2008.
One June 3, though, ICE PAC filed all their late reports with ELEC, one day after I wrote another column about the connections between the PAC and Long Marmero. On the report for the first quarter of 2014, which can be seen here, the $8,200 contribution to Eric Jackson on February 20is disclosed on Page 14.
As is, remarkably, a February 20 contribution, Check # 1057 in the amount of $2,600 to… the Bridgeton Democratic Organization.
The notation for that contribution, appearing right next to that to Jackson, is “Primary, Cumberland.” It’s impossible to cross-check that with the financial records of the Bridgeton Organization because, as I have mentioned, they haven’t filed any reports with the state since 2008.
Can it be coincidental that on the very same day that ICE PAC writes Check #1056 – for the maximum legal amount – to Jackson for Mayor, ICE PAC writes another check – #1057 – to the Bridgeton Democrats for $2600; and that organization sends a donation – in the exact same amount - to the Jackson campaign, five days later?
Sure, it might be a coincidence.
But this kind of “coincidence” payment from a contributor to a Trenton Mayoral campaign using a PAC as the conduit is what got Cooper Levenson in trouble in 2010, when that law firm – up for a legal contract with the Mack Administration – donated $7,200 to the “Partners for Progress” PAC, and that PAC made a contribution in the identical amount to Tony Mack’s campaign.
Since the Bridgeton group hasn’t filed any reports in a half dozen years, this will not be easily or quickly resolved.
With the records that are publicly available as of today, a picture is being drawn which strongly suggests that, apart from whatever the determination is made about ICE PAC and Long Marmero’s compliance with Trenton’s Pay-to-Play law, ICE PAC may have wheeled a separate contribution to the Jackson campaign that would have illegally exceeded the maximum amount allowable under New Jersey election law.
Cronyism and corruption. These are not words that should ever be associated with public service and yet, too often, they are.
Politicians elected by their fellow citizens to improve the quality of life for their constituents too often end up taking advantage of their office for personal gain.
Taxpayers who believe their hard-earned money is going toward improving schools, roads and public safety instead learn that it is being spent to line the pockets of the connected few.
It does not have to be this way.
As New Jersey’s capital city, Trenton must be a beacon to the rest of the state based on our diversity, the strength of our residents and the industry of our neighbors.
The next mayor of Trenton will not only have to clean up the mess left to him or her, but will have to restore the faith and trust Trentonians have rightly lost in their municipal government…
I should have written all of the above in quotes. By not doing so, you might have imagined that I wrote this.
Sorry about any misunderstanding!
These words are actually from Candidate Eric Jackson, published as an op-ed in the Trenton Times, waaaaaay back in March when he was telling voters that this city needed a leader with “zero tolerance for corruption,” and that he was that leader.
Re-reading the op-ed, I keep looking for an asterisk after “zero tolerance,” but I can’t find it. Because this morning, it sure does look like the intent of Mr. Jackson’s bold declaration is that “zero tolerance” sure means “zero tolerance, *(unless there is a legal loophole the size of Texas available).”
Yesterday, I pointed out that the folks who run a Political Action Committee (PAC) that wrote a check for $8200 to Eric Jackson’s mayoral campaign in February – including the same guy who probably signed the check – were in line to get a $20,000 legal services contract from the City of Trenton, through their law firm. To me, this seemed like a pretty clear-cut violation of the City’s Pay-to-Play Ordinance (P2P), posing a conflict of interest that to me would require under the terms of that law refusal of the contract by our City Council.
Actually, in a way the guy who signed the check agrees with me. “I think it is a perceived conflict,” Albert Marmero told Jenna Pizzi of the Times in today’s article. Mr. Marmero is the Treasurer of the “Initiate Civic Empowerment” PAC (ICE PAC), as well as a name partner of the law firm Long Marmero & Associates, up for a new $20,000 contract with the City.
But, according to Marmero, it’s only the perception of a conflict or violation, not a real one. Since none of the law firm’s actual funds went into the PAC during a time period that would fall under our city’s P2P law, it is entirely legal for his law firm to be eligible for this new contract.
Trenton’s new Law Director, David Minchello, himself a personal contributor to Mr. Jackson’s campaign, agrees. As does Heather Taylor, a spokesperson for the Citizens Campaign, the organization who provided the language for the P2P ordinance that was presented to, and approved by, Trenton’s voters in 2006. In the Times article today, Ms. Taylor characterizes the circumstance under which this kind of arrangement can be considered legal a “loophole” in the law. A loophole attributable to the fact that “Since the ordinance was passed in 2006, the scope and range of PACs in the state’s political landscape has changed,” according to Ms. Taylor as reported in the Times.
Taylor and Citizens Campaign hold out a “solution” to this situation, offering “new legislation is available to citizens or elected officials who want to propose an update to the law.”
Closing this loophole would be a good thing. Because it is madness to me that individuals who wear one hat to operate a PAC, and who select recipients for what can be sizable contributions – $8,200 in the case of Eric Jackson, the maximum permitted by NJ state law – and who sign checks for those sizable contributions can also be eligible for contracts from those recipients when wearing another corporate hat, at the same address no less!
That’s not the situation that I foresaw when I voted for this law in 2006. I can’t imagine other voters had the same situation in mind, either.
So where do we go from here? With everyone acknowledging this situation is due to a loophole, we can seek to tighten it up. Trenton’s City Council can take this up and easily amend the law, using Citizens Campaign’s new model language as a starting point. If Council fails to do so, citizens can do what we did in 2006, and get a new, tighter law on the books.
In fact, it might be better if we as citizens do it ourselves, and not rely on Council or the Administration to do what’s right. Because, as citizens, we must take ownership of our government and not leave it up to others to do.
I forgot to use quotations again!! That part about “as citizens, we must take ownership of our government and not leave it up to others to do?” That was Eric Jackson again, from his March op-ed.
Oh. By the way, elsewhere in that same op-ed, he described “some immediate steps Trenton’s next mayor can take on Day One to help restore the public trust;” namely, “I believe the first act of business must be to create the position of independent inspector general.” [Emphasis mine - KM]
I didn’t think much of the idea at the time (still don’t;), but hey! it was Mr. Jackson’s idea. We are now on Day 36, not Day One. Still no Inspector General, hmmm??
Candidate Jackson also favored “preserving strong anti-pay-to-play regulations.”
Here’s the perfect opportunity to strengthen them, Mayor Jackson!
What do you say? Up for it?
Mayor Eric Jackson is quoted in yesterday’s Trenton Times article by Jenna Pizzi saying that his Administration has “hit the ground running” during its first thirty days in office. Several new department directors have been hired; town hall meetings have been held around each of the wards, beginning what should be a regular dialog between citizens and City; and expressions of good will and support have poured in from around the state as everyone pulls for Trenton to climb out of the deep hole it is in.
There haven’t been a great deal of concrete actions taken, nor expressions of any new policies the Administration will pursue. But no one minds that for now. The Mayor says “We are laying the groundwork for a lot of things to come soon.” He is, quite appropriately, somewhat cautious in his approach during his first weeks in office. Trenton’s government is pretty much at rock bottom after four years of absolute hell.
One of the voices raised to support the new mayor and his team, quoted ion Ms. Pizzi’s article, is William Guhl, whose long and distinguished career in NJ municipal and state government lends his words a lot of credibility. He thinks that the new administration has already achieved a great success: “Certainly what the new mayor has done with his appointments and his demeanor and his commitment is restore confidence in the city administration.”
Confidence in the city’s administration. We need that desperately in Trenton, and I am heartily glad that we are making progress in earning that confidence back.
In the context of this sense of initial accomplishment, and in the atmosphere of all this good will and good wishes, that I have to say I find it unfortunate that there is still some baggage from the mayor’s campaign that threatens to dull some of the luster of the mayor’s new administration.
Last week, in another Times article by Jenna Pizzi, she reported a couple of questionable new campaign finance items revealed in the mayor’s post-election reporting filed with the NJ Election Law Enforcement Commission (ELEC). These items include what was noticed by Ms. Pizzi as contributions apparently exceeding the legal limit from a Newark law firm to Mr. Jackson; and what appeared to be either a duplicate contribution from the NJ Education Association, which would also exceed the legal limit, or what may have been a clerical error on the part of the Jackson campaign treasurer in recording a duplicate entry for the same legal contribution. As of the date of Ms. Pizzi’s article, it was not entirely clear which was the case. Upon being notified by The Times of these problems, a campaign spokesperson told Ms. Pizzi it would “amend the report” to ELEC if necessary.
The Jackson campaign had a number of reporting problems with ELEC throughout the entire 2014 election, some of these problems extending back to the mayor’s unsuccessful 2010 campaign. As Ms. Pizzi’s article reports, these new items indicate that these problems are not yet over for the Jackson campaign. The Times article did not discuss a few other matters that are unresolved in Mr. Jackson’s campaign financing that at the very least will cause additional embarrassment to his campaign. One of these unresolved matters is likely to impact official City business.
Back in April, I wrote about a number of contributions to Mr. Jackson’s campaign from former US Senator turned real estate investor Robert Torricelli, in his own name as well as his Woodrose Properties LLC that in the aggregate exceeded the legal maximum for such contributions by $1000. Since none of the Jackson campaign’s recent ELEC reporting, nor Ms. Pizzi’s article last week, indicate that this excess contribution was returned to Mr. Torricelli, one can only assume that this still needs to be addressed by the Jackson campaign.
The other matter involves the Woodbury law firm of Long Marmero & Associates LLP, and a Political Action Committee (PAC) closely associated with the firm, Initiate Civic Empowerment, a/k/a “ICE PAC.”
ICE PAC first drew my attention in April, when I noted a contribution from the PAC to Mr. Jackson of $8200, the legal maximum. At the time, I could find no ELEC report from this PAC stating the source of their funding and contributions, which I found troubling. I discussed the PAC again in early June, during the Trenton mayoral runoff, when I saw that the Long Marmero firm was under contract to the City of Trenton as one of many outside law firms working for the City. I suggested that the contribution from ICE PAC, whose Treasurer is Albert Marmero one of the name partners of Long Marmero, might represent a violation of Trenton’s municipal Pay-to-Play Ordinance. As it turned out, the work done for Trenton by the law firm was completed prior to the donation made to Mr. Jackson’s campaign. So there was no apparent pay-t0-play violation, at that time.
As it turns out, on June 3 – one day after I wrote my column questioning that contract – ICE PAC Treasurer/Long Marmero Treasurer Albert Marmero filed several financial reports with ELEC, including this one for the first quarter of 2014 which reports their contribution to Mr. Jackson’s campaign.
As of this week, it looks like we have a new situation. On the Docket for City Council’s scheduled session this Thursday August 7, proposed Council Resolution 14-490 calls for a new contract in the amount of $20,000 to be awarded to Long Marmero for “professional legal services regarding general municipal and defense litigation matters” on behalf of the City of Trenton.
By the fact that the closely-associated ICE PAC contributed $8200 to Mayor Jackson’s campaign only six months ago, I believe it is clearly the case that Long Marmero cannot be considered currently eligible to provide professional services to the City of Trenton under the terms of its Pay-to-Play Ordinance. Accordingly, Council must decline to grant this contract.
At $20,000, this is not a huge contract by any means. However, the City made a professional judgment on the merits of the firm’s professional qualifications that Long Marmero was best suited to provide the specific legal services for which the City would like to hire them, and it may be impossible to do so because of their PAC’s support of the mayor’s campaign. Remember, it was on these same grounds that Trenton’s City Attorney Marc McKithen canceled the Cooper Levenson law firm’s contract in 2011.
This puts us now into a situation where the internal conduct of the mayor’s campaign is now impacting the conduct of the City’s affairs. I expect Council to address this during Thursday’s meeting.
One can only hope that this will be an isolated instance as the new administration continues to establish itself, and that there will be no further instances of campaign business complicating city business. Otherwise, the Jackson Administration may find it difficult to continue its “running” pace if it is weighed down by campaign baggage.
Today begins the effort to heal Trenton. I wish Mayor Eric Jackson, members of City Council, and all of the current and future municipal employees and appointees of the new Administration nothing but good will and good luck as they begin today to – hopefully – reverse not just four years of mendacity and disaster, but several decades of drift and decay. Their success will be our success, and their failure will be our failure. How, then, can we hope for anything but good fortune? We would be fools.
At least one voice has been raised to suggest that there are such fools in this city, describing the presence of “detractors [who] hope for monumental or minuscule missteps. Or even failure.” Where there is one person saying these things, there are likely others with the same thoughts unspoken.
What a sad, angry and confused sentiment! “Hope for failure?” What could possibly be the benefit of that? Nothing but infinitely more grief, that’s what.
No one living in this city today, who has lived through the last several years, could sanely want to see anything but improvement in the city. Neither the Mayor nor Council may be the people we preferred, but that’s how elections work. The voters have spoken, at least the ones who showed up to vote.
The new Administration and Council have the support and best wishes of every Trentonian who truly wants the city to prosper. That includes me.
Future successes will surely be acknowledged and applauded, in the hope that they increase in number. However, be certain that problems, too, will surely be acknowledged, in the hope that they be few in number, and quickly contained with minimal damage.
We have the sad example of the last four years to show us the folly of failing to appreciate that, as circumstance warrants, both support and criticism of their government – from Day One – are essential for engaged citizens. Our public officials deserve no less.
Today does represent a new act for Trenton, of a play already well under way. Mayor Jackson and our Council members will hear both cheers and jeers for their actions, as each are earned. I wish them, and all of Us, Good Luck.
The Trenton Times has a good editorial today. Titled “N.J. $82M[illion] incentive to bring 76er practice facility to Camden is purely for show,” the piece uses the specific example of the aforementioned incentive granted to the Philadelphia 76er basketball team over the next 10 years to make a larger point about the worrisome trend over the last several years of massively increased subsidies and incentives paid to NJ companies in order to keep them in New Jersey:
[C]oaxing the team across the Ben Franklin Bridge showed New Jersey has what it takes to do attract a marquee sports name and its billionaire owner.
What it takes is simply money, and the state has spent far too much placating businesses that threaten to leave the state. Since 2010, New Jersey’s Economic Development Authority has awarded 252 companies more than $4 billion in subsidies — tax breaks and credits. That’s more than triple the amount awarded over the previous 13 years.
That expensive and preferential treatment extended to approximately 1 percent of corporations in the state is not paying off as well as it should. A study by the think tank New Jersey Policy Perspective (NJPP) finds the policy to be largely unsuccessful in boosting the state’s economy with the value of a job tied to a subsidy award rising to $48,000, “leaving companies on the hook for far fewer jobs on a per-dollar basis than ever before.”
The report to which the Times refers, prepared by New Jersey Policy Perspective, provides a great deal of information about the explosive growth of the state’s tax incentives and subsidies over the last several years under the Christie Administration. In the decade of the 2000s, the value of incentives granted to corporations totaled about $1.2 Billion. In the current decade, that figure is up to $4 Billion so far, and that’s for barely more than 4 years!
This total represents tax revenue lost to the state, contributing greatly to the budget crisis the state is experiencing. To make up, in great measure, for the tax giveaways to a mere 1% of the state’s companies, the Christie Administration has resorted to deep cuts in the state’s budget such as the huge reduction announced last month in the state’s pension payments for public employees.
As bad as the budget squeeze has been, this massive tax giveaway isn’t even benefiting NJ. According to NJPP, the state’s economy is still a basket case:
The unprecedented growth in subsidies, however, has so far done little to significantly improve the state’s economy. Four and a half years into the surge, New Jersey’s economic recovery remains far behind that of its neighboring states and the nation. Just 40 percent of the jobs New Jersey lost in the recession have been recovered (including only 48 percent of private-sector jobs); the state has the highest share of workers who have been unemployed for more than six months; and New Jersey continues to lead the nation in the percentage of homeowners (one in twelve) who are in foreclosure.
The NJPP paper points an accusatory finger at the “Economic Opportunity Act of 2013,” passed by the Legislature last year and signed by the Governor, as a major culprit in its words of ”opening the floodgates” of NJ subsidies:
[T]he law dramatically expanded the reach of New Jersey’s subsidy programs, increased the total subsidy amount any one company could receive, created more generous award amounts than the old programs provided for comparable projects and removed most caps on the subsidies (a $600 million cap is in place on residential redevelopment projects, but none exists for jobs-related subsidies or commercial redevelopment projects).
This major critique of the state’s incentives is bad news, then. What’s the Trenton angle?
First off, historically when New Jersey gets a cold, Trenton catches pneumonia. Anything which negatively impacts the state as a whole will hurt Trenton even more. The City’s economy is much more fragile than the state as a whole, and dependent on state aid to balance its books and provide needed services. When NJPP says “the state has the highest share of workers who have been unemployed for more than six months,” you know that the percentage of Trenton’s citizens is much, much higher than the rest of Jersey.
Even harsher, though, is the direct impact of the “Economic Opportunity Act of 2013.” The proponents of this legislation made a lot of claims about the great benefits of this law, claims that now look more than a little hollow. However, for Trenton and a handful of other towns around the state, the law was guaranteed to have a negative impact on the finances of this town.
Readers of this space will recall that I talked about this impact a few times several months ago. I quoted the official analysis prepared for the Legislature by the NJ Office of Legislative Services that explicitly stated the program “will result in significantly reduced property tax revenues” [Emphasis mine - KM] for Trenton and a handful of other towns, as the City will lose the benefit of local tax revenue from major new commercial development financed from these programs for most of 20 years!
So, to recap. A policy of massive tax gifts and subsidies to corporations that was supposed to boost the fortunes of the state is not helping, as New Jersey badly lags behind the rest of the country in economic recovery.
And this policy is also designed to lose Trenton money. for years to come.
I mention this because our City Council unanimously signed on to this program in December of 2013. Several members of Council expressed serious misgivings then on participating in a program that even at the time looked to be of dubious value to the people and fortunes of this City. This needs to be close to the top of the City’s agenda going forward for the next several years. Unless there are revisions to the terms of the City’s participation in the programs established in the Economic Opportunity Act of 2013, we could be victimized yet again.
In the 1990’s and 2000’s Trenton saw a number of big programs and property developments that were supposed to boost the City. But after decades of things like Regional Contribution Agreements, Arenas, Hotels and Stadiums, we can see how all those turned out.
Many of the same individuals who at the time promised many great things for Trenton from these very things – including Doug Palmer, Robert Prunetti and Brian Hughes – are reported to be advising the incoming Jackson Administration during its transition into office next month. Their counsel frankly might not be the best to warn us away from the perils facing Trenton from this new program, based on past experience.
And with corporate beneficiaries of this program such as Robert Torricelli’s Woodrose Associates on board as campaign contributors and supporters of Mayor-elect Eric Jackson, there are more than enough players involved who might distract distract the City and its leaders from the best interests of Trenton’s citizens and taxpayers.
The Trenton Times and NJPP tell us today that the State is spending Billions of Taxpayer dollars on corporate giveaways of dubious economic value to the State as a whole. For Trenton, these giveaways might be little more than a long confidence game from the State, offering us more of the same snake oil we’ve been sold for decades, contributing to the City’s ongoing misery.
Here is the final installment of my interview on June 4 with Paul Perez.
In this segment, Mr. Perez talks about his campaign, including the endorsement given to him by former Trenton School Board President Toby Sanders, about which I wrote on April 6, who is married to Paul Perez’s niece. That, and other family connections, are discussed.
A couple of weeks ago, after the May 13 election, I extended an invitation to both Eric Jackson and Paul Perez to each sit with me for an interview about the state of their campaigns and some of the issues facing the City of Trenton.
Through a campaign spokesperson, Mr. Jackson declined the opportunity for an interview, much as he has also declined any opportunity to meet with Mr. Perez for any joint debates before next Tuesday’s election.
Mr. Perrez accepted, and last night he met me at my house for an interview. Part 1 is below. I anticipate there will be two more segments, which will be available over the next couple of days.