I like Sal Bonaccorso, the mayor of
Clark. He is the only mayor from whom I have heard
the magic words, “We will do more with less.”
In response to severe budget
constraints, Clark has demonstrated some pretty
innovative thinking and Mayor Bonaccorso has asked
his Department of Public Works to pitch in and do
more with less. And to their credit, the Clark
employees readily bought in.
All the towns around here are in a
quandary. State aid is down. Revenue from fees,
permits and fines also is down. A lot of towns also
have lost property tax revenue as houses have gone
into foreclosure. Because business property values
also have fallen, many businesses have appealed
their assessments and lowered their taxes
substantially.
Our towns are running out of money.
The solution favored by the unions
representing municipal employees is pretty simple.
Just raise taxes.
Hey, they worked hard to get a
municipal job that gives them high salaries, the
best benefit program anywhere in the country and a
35-hour work week. Why shouldn’t town residents pay
more? Who cares about their kid who wants to go to
school or the fact that mom just got laid off.
Fortunately this is not the solution
favored by most mayors and town councils. I think
they have a much better feel for how severe this
crisis is, and how untenable it is to expect their
residents to fork over more of what little cash they
have left.
The alternative typically
utilized by town governments takes one of two major
forms. The first is layoffs. As never before, towns
are being forced to curtail bloated workforces. It
is without question a harsh response to the
recession. However, it also is the solution that
most businesses have had to use to survive.
The second technique used to save
money takes the form of furloughs. The state
government also is using this technique. Furloughs
have the advantage of sharing the pain. They also
are a default pay cut for municipal workers, but
since you are losing the work performed by the
employee, the true amount of the savings is somewhat
questionable.
Never, never, never discussed is
a pay cut for city workers.
This is probably the most widely
used adjustment in industry. Sometimes it is a
simple cut in base pay.
Other times it is a cut in
bonuses that are so pervasive they have become part
of expected income. In my own case, my income is
going to be down dramatically this year in response
to the recession. Let me tell you, I am feeling pain
and the last thing I want to do is pay more taxes to
keep someone in a cushy job.
In town after town I hear the
cry, “How can you expect us to do more with less?”
Well, personally, I think we should all be expected
to do more with less. We should all work a little
harder and a little longer. I know very few who have
the luxury of a 40-hour work week, let alone 35
hours.
Mayor Bonaccorso is asking his
employees to do more. He is telling them that he
will not lay them off, ask them to cut their pay or
take furloughs.
He is telling them that if they
want to keep their jobs they are going to have to
work harder. They are going to have to do more for
the residents of Clark. They are not going to get
more pay for this.
They simply are going to be more
productive members of society. The mayor is to be
commended. Others should look to his example.
James Coyle
President
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Where the Chamber Stands...
Snake Bitten
Once More
The best laid plans of mice and
men – and new presidential administrations – often
go awry. That seems to be the case with new COBRA
requirements that took effect March 1, enacted as
part of the Recovery Act passed by Congress in
February. COBRA is the federally mandated health
insurance plan that allows employees who leave a
company to continue their health insurance for a
certain period, generally at a much higher rate.
The new legislation provides
subsidized COBRA coverage to employees who lost
their job between September 1 and December 31, 2008,
as well as individuals who accepted COBRA but have
stopped paying their premiums or who initially
declined the coverage, as well as qualifying
dependents. In Washington lingo, these former
employees are called Assistance Eligible
Individuals, or AEIs.
Under the new plan, AEIs are
required to pay only 35 percent of their COBRA
premium, with the federal government subsidizing the
remaining 65 percent. With 14,000 people each day
becoming uninsured and with the cost of providing
health care for the uninsured much greater than for
those with coverage, any attempt to enable people to
stay insured makes financial sense.
In addition, extending additional
federal aid to needy citizens fighting through the
worst economic crisis since the Depression is the
right thing to do.
Unfortunately, this best laid
plan laid an egg. The new COBRA requirements place
an unfair onus on the business community for both
administration and initial costs, responsibilities
that should rest with the government.
First, employers are required to
pay the 65 percent of the premium costs not covered
by the former employee and seek reimbursement from
the federal government through credits on their
payroll and federal income taxes. That means an
outlay of funds.
Second, the new legislation
places substantial administrative responsibilities
on employers. For example, they must determine if
former employees are eligible for subsidized
coverage – have they qualified for Medicare or
spousal coverage, or is their household income too
high? Employers must determine the applicable
election period and must have notified AEIs by April
18. They also may need to reimburse former employees
for some premium payments, depending on enrollment
dates, and will need to monitor termination dates.
Employers must provide
substantial notification to former employees,
including but not limited to information on: subsidy
availability and eligibility; plan administrators;
enrollment periods; and the responsibility of the
former employee to notify the former employer if
they become enrolled in another health plan or
Medicare. (How important will that be to an employee
landing a new job?)
Employers will need to establish
new procedures to meet the expanded COBRA
requirements, including notification, premium
payment and reimbursement, enrollment and
monitoring, and compliance. Finally, employers in
non-compliance with the new regulations will face
fines in accordance with existing COBRA penalties,
such as an IRS excise tax penalty of $200 per day
for multiple beneficiaries and special damages of
$110 per day.
The new regulations do not hit
only larger businesses, either. While COBRA applies
to employers with 20 or more workers, New Jersey is
placing the same requirements on businesses with
2-19 employees.
At a time when businesses of all
sizes are struggling to survive – and to continue
employing workers – the new COBRA requirements are
unacceptably onerous. It is unfair to expect
business owners and managers working more hours
while generating less revenue to now become COBRA
administrators, as well. Even summaries of the new
requirements are complicated and convoluted – for
example, severance packages that included COBRA
payments on behalf of the former employee may now
need to be reviewed to ensure employer
reimbursement.
A ride through New Jersey’s
downtowns or along the state’s retail corridors
shows the impact of the recession in the reflections
of empty storefront windows. Office vacancy rates
hovering above 15 percent mirror the state’s loss of
more than 60,000 jobs last year.
The state’s private sector
currently employs 3.3 million people, with half of
those working for small businesses, those least able
to handle an increase in COBRA administration and
outlays.
On March 16, President Obama
stated, “Our recovery in the present and our
prosperity in the future depend on the success of
America’s small businesses and entrepreneurs.”
Certainly imposing additional onerous administration
and potential fines on small businesses and the
business community overall during a recession is not
in the best interests of their success.
While the new COBRA requirements
certainly are well intended, this is one case where
no good deed goes unpunished. Unfortunately, once
again it is the business community being punished.
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No Republican underestimates the
budget problems we face in New Jersey. It’s clear
we’re going to have to take extraordinary measures
to cope with this economic crisis.
The question is which steps will
put this state in the best possible position for a
rapid recovery, and break the cycle of multi-billion
dollar deficits that we have seen year after year
since 2002.
Republicans believe Governor
Corzine’s budget puts off difficult choices needed
to end that deficit cycle, and that the governor’s
spending plans set the stage for future tax
increases and service cuts that will devastate New
Jersey’s middle class.
Like the governor’s past budget
proposals, this one calls for spending far more on
government than taxpayers can support over the long
haul. It uses gimmicks and tax increases to balance
the budget rather than spending only what we can
afford.
Nearly every economist advises
against raising taxes in a recession. Yet the
governor proposes raising taxes and fees by more
than a billion dollars.
The burden of those higher taxes
and fees will inevitably fall on the middle class,
either by taking money directly from their pockets
or by draining the revenue that small businesses and
entrepreneurs need to generate the jobs that middle
class New Jersey desperately needs today.
Our unemployment rate already is
above 8 percent. It’s far above the rates of all our
neighboring states because of seven years of
heavy-handed regulation and exorbitant taxation.
This budget’s proposed taxes will make things even
worse for our business community.
That’s why every Republican in
the Legislature now stands firmly against raising
taxes.
Republicans also oppose
election-year budget gimmicks.
The biggest: The governor’s
effort to score political points by claiming this
budget spends less than the first one passed after
he first took office in 2005.
The budget ignores more than $2
billion in federal aid that will go to state
programs. With that money included, this budget
isn’t much different than last year’s budget in
terms of total spending.
Yet even with a $2 billion
federal bailout and $1 billion in tax and fee
increases, the governor wants to use more
irresponsible one-shots and accounting gimmicks than
any other governor in history.
This year and next year, the
governor plans to defer an incredible $4 billion in
payments to the pension funds, which already are $58
billion short of the funds needed to pay for the
future to retirees.
Pension obligations are debt,
owed to retirees as surely as borrowed money is owed
to bond investors. This debt will have to be paid
back at some point by taxpayers.
The governor plans “temporary”
tax increases totaling nearly $800 million. The
governor has essentially placed a bet that economic
recovery will come so swiftly that these “temporary”
increases won’t become permanent. Republicans are
skeptical.
A plan to push $361 billion in
debt payments off the budget has yet to be
explained. The scheme will almost inevitably involve
kicking the can of today’s expenses down the road to
future taxpayers.
Republicans want to rein in
spending now in case this downturn lasts longer than
anyone expects.
We want to hold the line on taxes
to keep businesses and executives in the state,
creating jobs that will end this recession.
Most of all, Republicans want
government to be honest about what it’s spending and
to stop pushing today’s burdens onto future
generations.
We believe there will be no
better time in the future to restore this state to
fiscal soundness.
Republicans will do everything in
their power to try to push this governor to make the
choices that are necessary for responsible,
sustainable government that doesn’t spend more than
the people can afford.
<Back to top>


By Daniel Higgins
“You know, it’s a shame about
Ed.”
“Oh, it was. Yeah, it was really
a shame. To go so suddenly like that.”
“He was dying for years.”
“Sure, but the end was very, very
sudden.”
“He was in intensive care for
eight weeks.”
“Yeah, but I mean the very end,
when he actually died. That was extremely sudden.”
In this classic exchange from the
1985 comedy Fletch, the title character, an
investigative reporter played by Chevy Chase, tries
to bluff his way through a medical exam to get
information from a doctor.
Sadly, if Fletch were real today
he would probably be laid off and his newspaper
would be joining others across the country, either
folding or moving to an online-only service with a
skeletal staff.
Like Ed, the financial health of
the newspaper industry has been in decline for a
long time, and yet it still comes as a shock when we
read that papers like the Seattle
Post-Intelligencer and the Rocky Mountain
News will no longer print. Indeed, the very end
was extremely sudden.
It is not that newspapers have
lost their relevance or that people have stopped
reading. In fact, people are reading more news now
than they ever have before.
It is simply that in this
Internet era, newspapers cannot generate the same
revenue they used to through advertising and
subscriptions. As more newspapers lose the battle of
profitability, no longer will they be able to afford
the reporters who investigate stories that keep
business and government accountable for their
actions.
The real question then is: Can
the media still serve as the government watchdog?
A Google search of “Government
watchdog” will yield more than 1 million hits, so
it’s unlikely that this key role will go unfilled.
Groups with a predetermined agenda are likely to
find a greater voice in the watchdog business, and
what we are likely to lose in this exchange of
reporter for reformer is the independence and
credibility that the newspaper industry once
embodied.
Newspapers used to “speak” to all
of us as a voice of independent authority,
sensational tabloids with their comical headlines
notwithstanding. They wouldn’t print something that
wasn’t exhaustively investigated and found to be
true. Editorials were carefully considered opinions
based on substantive facts.
Of course, at one time, news was
news and entertainment was entertainment. Now those
lines have blurred so much that many in the media,
print and electronic, don’t even try to appear
independent. The liberal media in one corner battle
the conservative talk show hosts in the other, using
spin in lieu of facts for weapons. There is no
referee and we, as the judges, use our remote
controls as gavels, rendering verdicts through
ratings.
Readers, listeners and viewers
are branding themselves by becoming loyal fans of
certain media outlets. As the media have
compartmentalized, so have we and now seek only the
information that we like, affirming our viewpoints
instead of challenging ourselves to think
critically. No longer is the question, “Did you see
the news?” The question now is, “Do you watch
O’Reilly or Olberman?”
Newspapers themselves have become
targets of politicians who charge bias in reporting
and editorials. And as comedians like Jon Stewart
and Bill Maher replace journalists as the dominant
presenters of “news,” the joke is now on us.
Whether the newspaper industry is
able to make a successful adjustment to economic
realities and somehow survive is not the point. What
is important is whether independent,
straightforward, investigative reporters will be
around to watch our backs in this “infotainment”
world.
The answer is up to us. The
fail-safe entertainment motto has always been, “Give
the people what they want.” If we don’t demand it,
then the independent government watchdog will be
long forgotten – kind of like Fletch II.
Daniel Higgins is the executive
director of University Communications at Rider
University
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