By Robert J. Tartaglia
With Elections Looming, Questions Arise on Governor’s Plan
Gov. Jon Corzine has been touting his plan to privatize the toll roads as a means to rescue the state from its serious financial problems. In fact, the governor made it the centerpiece of his budget address to the Legislature earlier in the year. The state has projected cost increases that are staggering and will already face a $2.5 billion deficit for Fiscal Year 2008-2009. Asset monetization could potentially free up a billion dollars a year or more every year long into the future, but could potentially become a political firestorm as members of both parties have criticized the plan.
The Senate and Assembly are up for reelection this November and with members of his own party doubting its political viability, he has taken the show on the road with his new chief of staff, Bradley Abelow. Touting it as the means to restoring the state to financial repair, the administration is now looking to hold town meetings in all 21 counties. Corzine is also considering placing it on the November ballot for the voters to decide, although recent polls are suggesting voters want nothing to do with monetization. Other states that have monetized their toll roads have seen sharp increases in tolls and unleashed voter backlash. One thing is for sure: New Jersey needs a financial plan to restore its fiscal stability! Stay tuned.
The crisis in subprime lending has sent shockwaves through parts of the financial system. The concern caused big drops in the stock market in trading recently as investors worried about whether an expanding credit crunch could do serious harm to the overall economy. The Fed joined with other central banks around the world to add extra money to the banking system in an effort to bolster confidence. The crisis in subprime lending reflects an overall slump in the housing market following a boom period in which sales and home prices had both soared.
NJBankers has been consistent in its message that our members historically produce a risk-based underwriting approach that continues to be a key element in producing strong loan performance and lower delinquency rates for many of our member’s customers. The focus here in New Jersey continues to be on the businesses that have sold exotic products to consumers in the last couple of years. Potential legislative activity is focusing on licensing requirements for mortgage bankers and brokers. Assemblyman Neil Cohen is leading the charge along with Sen. Ron Rice, who is looking at programs to assist those going through foreclosure. In fact, Sen. Rice will be holding a hearing in mid-September to look at best practices available for families going through foreclosure. NJBankers stands ready to participate, along with the Department of Banking and Insurance and other interested parties.
New Jersey’s business community may be in for a tough road, as there is a real possibility the Assembly may take up action on A-3812 (Albano/Panter/Oliver/VanDrew), which would require all employers to provide 12 weeks of paid family disability leave to employees to take time off to participate in providing care for a family member or to be with a child during the first three months of birth or adoption. While its goal is laudable, the unintended consequences could bring serious disruption to large and small employers alike. Businesses with two or more employees will be required to provide the benefit, which does not take into consideration how those businesses will be affected.
On the Senate side, S-2249 (Sweeney) has passed the Senate Labor and Budget and Appropriations committees. The full Senate has yet to vote on the measure. NJBankers would like to congratulate Sen. Shirley Turner for her courage in voting against the bill in the Senate Budget and Appropriations Committee and for calling it a new tax on employees. She hit the nail on the head, stating “my constituents can’t afford a single penny more from their pay checks.” Other committee members who voted against the bill were Sens. Bark, Bucco, Kavanaugh, Lance and Littell. Paid Family Leave’s time may be here, but at what cost? NJBankers strongly opposes the bill.
As a new feature in this quarterly column, we will highlight issues the American Bankers Association has been focusing on in Washington, D.C. Under the leadership of our new president, John McWeeney Jr., we are expanding our government relations efforts to assist the ABA in its goal of protecting our interests in Washington, D.C. We urge all NJBankers members and their employees to support the association and the ABA by contacting your Congressional representatives by phone or e-mail on key issues affecting the future of our industry.
ABA Executive Director of Congressional Relations and Public Policy Floyd Stoner helped lead the fight when the House of Representatives rejected provisions in the 2007 Farm Bill that would have expanded the powers of the Farm Credit System to engage in non-agricultural lending. It was a great effort here in New Jersey, led by NJBankers’ immediate past chairman Michael Quick, who assisted NJBankers in spreading the word and helping to defeat that onerous provision. Great job by all, but the FCS hasn’t stopped there, and is looking to have the amendment put back in the Senate version of the Farm Bill. Make sure you contact your senator and urge them to oppose the bill.
NJBankers in Colorado
A delegation consisting of NJBankers’ Chairman Roger Bosma, Vice Chairman Norm Beatty, past Chairmen Mike Quick and Ted Bessler, member George Scharpf and President John McWeeney represented the association at the ABA’s annual summer meeting at the Broadmoor Hotel in Colorado Springs. This meeting of state executives and bankers serving on the ABA’s Government Relations Committee focused on the key legislative and regulatory issues our industry faces in Washington, D.C.
NJBankers’ delegation presented ABA with a $20,000 check as our annual contribution to the ABA’s BankPac fund. This represented a 25 percent increase over last year’s contribution and is a record for the association. As NJBankers continues to grow, we look forward to increasing our contribution again next year to support the vital work the ABA is doing in Washington, D.C.
NJBankers’ JebPac campaign is going strong with about $65,000 raised so far this year. We are asking members to please remember and participate in the campaign, as the never-ending need for funds always exists. Also, both houses of the Legislature are up for election in the fall and we are hopeful to make our goal of $100,000 by year’s end.
The Action Banker’s Council will soon resume its monthly legislative meetings. We have former banker and current Assemblyman Jack Connor – a member of the Assembly Financial Institutions Committee – slated for our September meeting, followed by Assemblyman John Wisniewski in October. Assemblyman Jack Connor’s meeting will be held at Mastori’s in Bordentown on Sept. 13 at 8:30 a.m. Please make every effort to join us. These informal breakfast meetings have become a staple of our Government Relations program and have broadened legislators’ understanding of issues affecting our industry.
Robert J. Tartaglia is director of government relations for NJBankers. He can be reached by e-mail at email@example.com.