Bag Here, Bag Now

In Amsterdam, at a Super de Boer, imagine my surprise when I had to pay for a grocery bag because I didn’t bring my own. In the U.S., I buy those biodegradable poop bags for my dog, so I don’t need the plastic grocery bags. I bring canvas to the store, etc. Yeah, I try to be “green” when I can. I think more and more people these days do.

But when I left the Super de Boer, I was amazed. I don’t live in an area, or a state, for that matter, that would employ such a progressive-minded initiative. I do know that New York City Mayor Mike Bloomberg has been on a lengthy campaign to get people to recycle their plastic grocery bags, or bring their own from home, but like Europe, in an ever-shrewd way to use taxes (or fees, in this case) for the public good, Bloomberg is now proposing a bag fee. Joe Biden, eat your heart out—now here’s a tax that we can feel patriotic about.

According to The New York Times:

City officials estimate that the fee could generate $16 million a year, a figure that Mr. Bloomberg would no doubt appreciate, given the lingering and concussive effects of the global economic crisis on the citys economy.

The article continues:

If the proposal passes, New York City would follow the lead of many European countries and become one of the first places in the United States to assess a so-called plastic bag tax.

It’s a fantastic plan, and every city should engage in such bold plans, but does it go far enough? In New York City, cigarettes approach $8 per pack, and guess what? Smoking is way down. A study by the city’s health department in 2007 indicated a 20-percent decline in smoking since 2002. Why? A combination of strategic advertising, a smoking ban in public places like bars and restaurants, and that cig tax were all attributed to that decline.

New York City, in 2006, also banned artery-clogging artificial trans fats at all restaurants. Why? Because public health is in the utmost interest of any government (and not just public health that keeps a locality from getting sued, like bad sidewalks, etc.)

So what’s my point? There are always going to be the “keep your laws off my trans fat” people, but isn’t one of the roles of government to protect the citizenry, from both exogenous and endogenous forces? I think so. And here’s the other thing: the city’s real intent is to not make money from this fee. The intent is environmental: people would stop using plastic bags, and any subsequent revenue from a bag fee would dry up. Further, $16 million is a mere whiff of New York City’s $50 billion municipal budget. This ain’t about more money to line the pockets of the folks at City Hall.

But it’s always baby steps with these laws. The cig tax was slow to increase; no one noticed a flavor difference when their food lacked trans fats; and, alas, the bag tax is too small, and needs to hit the consumer. We’ve squandered three decades of environmental warnings, and these are issues our local governments can control. Just like implementing aggressive recycling plans, plastic grocery bags are things of the past we need our local governments to help to drive home that message.

The Times article notes that following Ireland’s implementing its 33-cent bag tax in 2002, plastic bag use dropped by 94 percent. Ninety-four percent. Now that’s the stuff!

The article quotes local grocery store owners saying that customers would be outraged by paying for bags. Perhaps, but how long would it take for a customer to start bringing a bag? Once? Twice? It wouldn’t take long.

We don’t have long. Bag here, bag now.

NJ Needs an Affordable Housing Tax. Period.

At least we’re talking about an affordable housing mandate (even if that talk is in its third decade).

OK, now that’s out of the way, the affordable-housing-as-mandate discussion in New Jersey is a mess.

In June, when the governor here signed into law a bill that would eliminate Regional Contribution Agreements—a tool used by some towns to wire funds covering their affordable housing obligations to nearby, typically poorer, urban, areas—it was viewed as a triumph by housing advocates because of its anticipated impact on helping to reintegrate neighborhoods, staving off so-called golden ghettos, and providing housing for lower-income residents in even the wealthiest of communities.

The Legislature also passed a measure that would levy a 2.5 percent fee on the assessed value for non-residential construction or improvements. Opponents say that fee is far too small, covering only a portion of a construction project’s affordable housing requirement, leaving the town to cover the rest of the cost.

So the state, with its 566 towns, could not fully come to terms. That’s why the New Jersey State League of Municipalities is challenging the bills, along with some 230 towns that have joined the fight. Conventional wisdom mostly said that any regulations put forth by the state’s Council on Affordable Housing (COAH) would be amended, but implemented at some point, but it now appears we could be sent back to the drawing board.

On September 15, The Star-Ledger reported that one town’s challenge—Medford Township—would challenge COAH’s rules with the state’s Council on Local Mandates—a powerful state agency whose rulings cannot be overturned by state courts. Medford’s Republican Mayor (yes, this is largely a partisan issue—he is running for state senate) and the township says COAH’s regulations could cost towns roughly $6 million statewide and then cites a 1995 amendment to the state constitution that bans certain unfunded state mandates, the Ledger reports.

This is more than a legal dance—it’s tactical maneuvering that could successfully curtail the implementation of sound affordable housing policy in a state the desperately needs it. While it’s unclear how the Local Mandates council will rule, one thing is clear: the Legislature needs to step it up a notch by:

• Creating a value-added tax, like a gas tax that would be used strictly for infrastructure. Gov. Jon Corzine is still pushing his asset monetization plan that would increase toll costs on some of the state’s busiest thoroughfares, but that’s largely a regressive tax for those commuters who have to drive long distances.
  
• We need to move away from the property-tax-based funding for social mandates that benefit everyone (yes, even you there, living on the horse farm in bucolic northwest New Jersey). The implementation of an affordable housing policy that works and is reasonable can be funded by more than just property owners.
  
• The developer’s fee—the aforementioned 2.5 percent fee—and the municipal mandate system of funding affordable housing is ludicrous. This is important because it could very well thwart all economic growth in New Jersey with ratable-generating enterprise moving over to places like Pennsylvania (no offense, Pennsylvania—I’m there often—great commonwealth. We love ya’.)
  

It’s encouraging that the state legislature here understands the importance of providing affordable housing, but after decades of wrangling, we need to think clearly here, and do what’s got to be done.

The GOParadox

Despite everything, the Republican Party's playbook still revolves around calling the Democratic platform, Democrats themselves, and even their professions as weak, cowardly, effete, tame, and impotent. No matter that the Republican party INCREASED the size of government in the last eight years, increased spending, increased the deficit, distracted the entire globe with its ill-designed version of a terror war (terror war was necessary, but not this one), has tried to use wedge issues like same-sex marriage and abortion to divide the country.

You didn't hear a lick of the Republican-esque vitriol at the Democratic convention. Almost everyone who spoke went out of their way to honor McCain's service to the country. In 2004, Republicans refuted, avoided, and even dispatched deep-pocketed thugs to discredit John Kerry's service to the country. Republicans have not put "country first" in years, and they're certainly not doing it this year. John McCain's address Thursday night was the most disingenuous, dishonest, misleading 45 minutes I have seen during this election cycle.

Sarah Palin's address, on the other hand was the most honest, accurate depiction of the state of the Republican Party I had seen in years: angry, bitter, vitriolic, sarcastic, dismissive. The only disingenuous aspect of that address was its "toughness": her speech was, in fact, weak, cowardly, effete, tame, and impotent because it simply set out to impose a false sense of impending doom, and to rattle the GOP base by puffing themselves up while putting down more than half the country.

The Best Biden He Can Be

The test message never came: the media, once again, by way of stakeout, pestered its way to this scoop. After 1 a.m. Saturday morning, and after leaks throughout Friday evening indicated that Barack Obama’s vice presidential finalists were being slowly disqualified from the veepstakes, it’s now being reported that Obama will run with six-term Delaware Democratic Sen. Joe Biden.

Obama’s choosing Biden will present all of the positive and negative effects that the punditocracy can muster up, but picking Biden is certainly more than simply running with a Washington fixture with a quick wit and a progressive bent. He has more foreign policy experience than John McCain, and that’s what we’re going to hear in the coming days.

But what about at home? Biden’s 1994 crime bill was lauded as putting more police on the streets resulting in a reduction in violence nationwide. In 2007, the senator introduced a reauthorization of many of the original elements of the 1994 bill, including the reauthorization of the Office of Community Oriented Policing Services; adding 1,000 FBI agents to focus on traditional crime (Biden has argued a drop in FBI resources since 9/11); creating a national commission on crime intervention and prevention strategies; a proposed reduction in recidivism; and not to mention the renewing of the assault weapons ban while closing the gun show loophole.

So while we’re going to hear a lot about a foreign policy balance on the Democratic ticket, let’s ask ourselves what this ticket, with Obama’s community organizing background, can do for American communities?

What Shall We Do? What Shall We Do With All These Useless Houses?

John McCain could have dismissed his inability to recall how many houses he has as a senior moment, but that would have pointed to his age.

So there wasn’t any way for John McMansion to dig out of this one, but one thing is clear: the McCains have more houses than you or I do, and his inability to count them is not due to a simple forgetful moment, but because of a legitimate clarity issue in how to count separate houses on one estate, what is owned by the senator and what is owned by the financially reticent Mrs. McCain, and how many condos they fused into one giant McCondo-seum.

Fortunately, most of us are privileged enough that we will never, ever have to deal with such pesky clarity issues.

McCain’s staff says he has four houses, but then the watchdogs are saying that he has at least seven. Then again, Huffington Post cites an assessment by Progressive Accountability that says they have 10, with a combined value upwards of $14 million! I’ll tell you, nothing makes me feel more in touch with a presidential candidate than when I compare his or her financial holdings, to my personal financial worth. Now McCain says that I won’t be rich until I reach the $5 million threshold? Man, I have a long way to go.

Barack Obama, who has taken a hit in the polls that pundits say worsened while he was catching rays during the Russia/Georgia conflict, has launched something of a populist attack against McCain to a point where it could push back the much-anticipated text message that I’m supposed to get telling me of Obama’s veep pick. Why would anyone want to hurry the announcement of the potential second-in-command of the Free World when there is political gold to be unearthed from this prospector’s mother load?

Politico quoted Obama on a campaign stop in Virginia where McCain was painted as out of touch:

"Somebody asked John McCain, ‘How many houses do you have? And he said, I’m not sure. I’ll have to check with my staff. True quote: I’m not sure, Ill have to check with my staff. So they asked his staff and he said, at least four. At least four! ...

"If you’re like me and you’ve got one house—or you were like the millions of people who are struggling right now to keep up with their mortgage so that they dont lose their home—you might have a different perspective. By the way, the answer is: John McCain has seven homes. So there’s just a fundamental gap of understanding between John McCain’s world and what people are going through every single day here in America."



To be sure, it’s difficult these days to relate personally with our presidential candidates. These folks generally live in a world that most Americans will never experience. So with that, the “I just want to have a beer with my president” argument off the table.

The questions we need to ask is, with millions of Americans facing foreclosure and with the concept of a sturdy fixed-rate mortgage to some Americans as foreign as that of your spouse being worth $100 million after inheriting a beer distributorship, is McCain in touch with everyday economic issues? How big of a tax deduction are the McCains getting from owning all of these houses? At what point do we call someone “out of touch” with the common man? Is it when he or she needs two hands to count his or her houses, or when he or she can’t count at all?

Bottled Hot Water

Drilling For Finances From Tax-Exempt, Non-Profits?

It's tight here in New Jersey.

It's crowded. With 8.7 million people, we are 11th in the country in population, but first in population density in the Union with over 1,100 people per square mile. We're also wealthy -- 2nd in the country -- but you wouldn't necessarily know it by looking at those areas that make us the most densely-populated state in the country.

The Garden State, as it so happens, also as the highest imbalance of any state in the country in terms of what it gives and receives to and from the federal government. According the the New Jersey State League of Municipalities, the Garden State gets back just less than two-thirds of every dollar it sends to Washington.

So there are demands here. There are spatial demands, housing demands, demands for resources, infrastructure, you name it. As such, New Jersey is often at the vanguard in dealing with all kinds of issues facing the nation. The state hits a major stumbling block, however, when it comes to property taxes.

In New Jersey, where we rely on a property-tax-based system to largely fund our public schools and governments, rising municipal costs are taxing people out of towns. The state has mandated a four percent cap on municipal budget increases, and as home values are reassessed and towns are revaluated, property tax rates will adjust -- either up or down. But obviously the worst-case scenario is an increase, so that's what we'll examine.

In 2006, the average tax bill of the wealthy Township of Montclair was $13,547, and that was based on an average home assessment of $252,742. According to NJ.com's "New Jersey by the Numbers," if you equalize that assessment for comparisons with other towns, that $13,547 bill applies to a house worth $624,207. So often is the case that you have a homeowner who can no longer afford the tax-related costs to their homes, even if they were smart and took out a 30-year fixed mortgage.

So what to do? We've increased taxes on the highways, per Gov. Jon Corzine's asset monetization plan to raise tolls on select highways and increase the state sales tax to 7 percent. Both of these can be regarded as regressive as they pose a greater burden on the poor.

So what next? With the New Jersey Legislature in constant "hold on" mode when it comes to the long-anticipated "property tax convention," towns, facing affordable housing development mandates, and approaching complete build-out with little area left to develop tax-ratables, are looking at those who, by law, do not have to pay taxes.

According to the New Jersey Policy Perspective, the assessed value of all property -- buildings and land -- in New Jersey in 2000 was $648.5 billion, and of that, 13.5 percent paid no property tax. Under law, that 13.5 percent was tax exempt. This tax-exempt property is largely composed of public, private and religious schools, state, county, and municipal buildings, churches and charitable institutions, hospitals, and cemeteries. Other partial exemptions include those for water and sewage facilities, urban enterprise zones.

New Jersey's Princeton Borough, a 1.1-square-mile, 12,000-resident municipality lies right smack in the middle of the state, and is a pretty good example of "if it can go wrong, it will." Princeton Borough is a donut-hole municipality -- a town that is physically surrounded by another town, in this case, Princeton Township. Both towns consider "downtown" (Princeton Borough) its downtown, share a school district, a municipal library, and more than a dozen other municipal agencies. In fact, the only agencies the two towns do not share are administration (government), public works, and police.

However, as you might have guessed, Princeton is home to Princeton University, and, alas, most of Princeton University's tax-exempt land lies in tiny Princeton Borough, which is already strapped for cash. About 50 percent of the Borough is tax exempt.

The Borough's annual operating budget is roughly $23 million, and Princeton University, which is the largest employer in the Princetons, and pays the most in what is taxed -- sewers, buildings with full, or partial, tax levies, etc. -- holds an agreement to give about $1 million a year in voluntary municipal funds, used however the Borough sees fit. Princeton University also funds other community projects, adding value to the town-gown relations.

There has long been a tension between the local government and PU regarding these in-lieu finances, but this year, the local Democratic Party has upped the ante, gathering signatures as part of a petition asking if PU pays its fair share.

The petition contends that a resident's property tax levy would drop a whopping 24 percent in the Borough. The average resident there pays in the $13,000 range per year in property taxes. The Democratic Party there is lobbying for local officials to support efforts to negotiate a fairer payment from Princeton University. PU currently pays tax on its commercial property, and maintains voluntary tax roll inclusion for grad and faculty housing where schoolchildren might live, and pay its "fair share" of all taxpayer-supported services.

The petition does not call for the removal of federally authorized tax-exempt status -- granted to all nonprofit educational institutions

According to a report in The Times of Trenton, the university's tax payments in 2006 amounted for about 8.5 percent of the $9.5 million in municipal taxes the borough collected from all taxpayers in 2006. According to the story in the Times, "when school and county taxes are included in the calculation, there was a $27.9 million gap between the $7.1 million in property taxes the university paid in 2006 and what it would have paid if all its property in the Princetons were taxed."

The state legislature has so effectively slept on working with localities in creating a sensible solution to rising property taxes that towns are now taking it upon themselves to drill for oil, er, money in local reserves, rather, $15 billion university endowments, that had been largely untapped, not counting the annual contributions, agreements, and institutional presence. As is the case with so many institution-based towns, the existence of the town is based squarely on the existence of the institution -- is there a formula that quantifies that value?

Other heavily-endowed private institutions like Harvard University in Cambridge, Mass. have devised long-term in-lieu-of-tax deals with their municipal hosts. In 2005, Harvard and Cambridge came to terms on a deal that would bring the city more than $60 million over the next 20 years.

But Cambridge, with more than 100,000 people, is the fifth-largest city in Massachusetts, has a far higher annual city operating expense budget, and has far more tax-ratable property than Princeton ever could. So, in effect, it's incomparable.

Just another example of New Jersey being the science laboratory for social progress, but with so much at stake, this issue is far too big for a couple hundred local residents to swallow. The legislature must step in, and step in soon, to find broad-based creative ways to amend what is quickly turning into a statewide property tax crisis.