Thursday, April 28, 2011

Politics in all its glory

In NJ last year school budgets went to vote and of the 541 voted on 316 were defeated. Governor Chris Christie called this moment a sign that the people of NJ agreed with him that these budgets were out of control and spending needed to be controlled. At the time that the budget elections took place Christie had already called for the cut of $820 million in aid to schools. In a grand political move Christie took the defeat of the budgets as a sign that he had succeeded in proving that people didn’t want to see their taxes go up to make up the difference.

OK, that makes sense. People didn’t want to see their taxes go up by some incredible rate. That brings us to 2011.

This year voters went to the polls for school budgets and as of today, 301 of 373 school budgets passed. We’re still waiting to get the results from another 165, but at this point it’s clear that we’ve seen the majority will pass. Now again Christie views this as a victory for his stand. But is it really a victory for him or just a victory based on circumstance?

Towns got less aid from the State last year and the current projections, while showing a slight increase in State aid, are still lower than usual. As a result of last year’s significant cuts people were laid off, budgets were cut and now there is no need to suggest or submit a budget that goes far beyond what the expected annual tax increase is. So is that really a victory? No it’s just budgeting based upon the knowledge that you’ll have less to work with.

I work for a company and had to make my first budget for my department this year. I’m also a finance major and did very good in my budgeting and forecasting class. When creating a budget it is important to know the limits if you are going to see it approved. You have to anticipate increases on a year to year basis due to inflation in certain areas, and at times, based on the economic environment can expect lower costs in other areas. However, on the majority whole you should expect increases. The level to which you increase is of course based upon your forecast. Will you have the funds to cover the budget and end the year even, above, or below your budget. Think of the expected State aid as part of the forecasted income to cover the necessary costs. If you know your income is fixed you aren’t going to create a budget that challenges the expected income. Since our financial planners in the districts know Christie will not budge on the amount of aid districts will get they are not going to make a budget that challenges that. So it stands to reason that there is no way any district will propose a budget that would be voted down. It is simple logic! If last year districts knew that there would be no movement from Christie and no increase in aid they probably would have made budgets that met the ultimate income expectations.

Now, will the Supreme Court order Christie to restore funding to schools? Who knows? Will he actually restore it if they do? That is also up in the air, but the point remains, this method of saying defeats one year are a victory, and victories the following year are also victories is just all political nonsense and a way to further flash the smoke and mirrors from the real issue—we are a State that has seen Democracy erode into Dictatorship. A State where a bully gets what he wants because he’s got a big mouth and a really pointy finger. And like any good bully he knows how to play the game to always look like the good guy because people are too stupid to question him. Yet even if they did, would they get results? Nope, they’ll just get escorted from the Town Hall meeting.

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