Gov. Corzine's Proposal on Pension Payment Deferrals

The pension deferral proposal is concerning. It seems more like a gimmick rather than sound fiscal responsibility. It is not truly saving money, it is only deferring payment into the pension system. The responsibility for fully funding the pension still exists. Corzine’s argument is that this will save taxpayers money in the short term. This is true, but it put an even bigger burden on future years.

I have been in the retirement and pension industry for over 20 years and from what I can tell, this proposal violates one of the sound financial principles, dollar cost averaging. Employees in 401(k) and similar plans will put in the deposits to their plans every pay period buying what securities / funds they have selected. Rather than trying to “time” the market, these periodic payments will buy more shares when the market is low and less shares when the market is high. I am not sure of the investment mix of the pension funds, but I am assuming there is a good percentage of an equity investment. While no one knows if we are at the bottom of market now, by not making contributions, we miss an opportunity to get in at a lower cost which would generate more appreciation when the market comes back. Also at this time, funds are being depleted to pay out pensions and a larger percentage of the balance is necessary since the fund value has decreased. So by not buying at a possible low, and losing a larger percentage of assets in withdrawals, we may not get the appreciation in a normal market cycle. This may mean we may need to pay even more than currently anticipated to make up for the deferred payments. This is potentially extremely dangerous. One of the major issues with the US auto industry, now looking for a bailout, is their pension obligations. If New Jersey runs into trouble with pension obligations, who will bail us out? Of course, if the market continues to go down over the next few years, Corzine could be deemed a financial genius. But, I do not think it is the government’s responsibility to time the market.

What is really needed at this time is pension reform to make the system more fundamentally sound to protect the retirement of employees while not costing too much in taxes for the residents. A potential option that should be investigated is converted to some sort of defined contribution plan, similar to a 401(k) (they are called 457’s in governments). Many corporations converted to these types of plans. Rather than guaranteeing a payout and the state managing a pension fund, some type of employee investment program could be set up which would include government contributions, employee contributions with a match. The money would then belong to the employee and they could take it out at retirement. The state would not need to worry about the market uncertainty of managing a pension fund. While it would not be good to take anything away from current employees pension promises, they could be given the option to the new program. There is a lot of work to do to see if this type of program would work including ensuring does provide an adequate retirement for employees but it is an option that could be beneficial to New Jersey’s employees and taxpayers.

Questions on COAH

This year’s election for the open seat on the Cranbury Township Committee is more important than ever to our town due to issues such as COAH / Affordable Housing.

As I have spoken with residents of our town about my candidacy for Cranbury’s Township Committee, I have been asked many questions regarding COAH and Affordable Housing and how it will impact our community, I have also been asked about my views and how I would handle these issues if I were elected to the Township Committee. Below are my replies to a few of the questions I have heard regarding Cranbury’s COAH / Affordable Housing Obligation…

Question: What should be done now for Affordable Housing in Cranbury?

Win’s Answer: The original round 3 regulations provided a means for municipalities to create housing and provided affordable housing for many families. Under the prior rules Cranbury and CHA devised a great plan to build additional housing that incorporated the use of regional contribution agreements.

The revised plans drastically increase our obligation, remove the RCA’s and retroactively change some of our prior commitments. Our goal should be to get COAH to agree to accept our original Round 3 Plan as submitted.

Question: What should be done to support the needs for Affordable Housing for Cranbury in the future?

Win’s Answer: While Cranbury cannot directly make changes to COAH regulations, we can be influential. An equitable tradeoff of development fees for commercial and non-commercial should pay for new affordable housing, as long as the fees do not hinder smart development in New Jersey. Cranbury can work with our elected state officials to help bring some rationality to COAH. Bill Baroni has been a champion for Cranbury on COAH and we should continue to work with him. It remains to be seen if Linda Greenstein will be of any help to Cranbury due to her lack of tangible support to date for our town. Wayne DeAngelo has shown he will not be of any assistance. Cranbury also needs to keep fighting the current legislation by taking a strong position against the new COAH rules, participating in appropriate legal action and not accepting what has been done to Cranbury and towns like ours. I pledge to fight for Cranbury so that we have a fair Affordable Housing obligation which will not destroy our town as we know it.

Question from Cranbury Resident: As we have seen over the past few years, the TC is not listening to our residents. Please let us know how you'll involve residents in the decision making process. How will you differ from the current people on the TC? http://www.cranbury.info/viewtopic.php?t=2856

Win's Answer: I feel it is critical for the Township Committee to take in the opinions of the residents on making decisions. The township committee is elected to represent the people of Cranbury. Decisions should be made that serve the best interest of Cranbury. The larger the magnitude of the decision, the more input is necessary before making a decision. By magnitude I mean large expense (i.e. library, ballpark, etc.) or long term potential irreversible action (land preservation).

There are several ways to get more input from residents:

• Being around, attending events and talking to people in town. I have started my walking around town and have already visited several hundred houses. This is a great way to get the pulse of what people care about.


• Listening to residents at the township committee


• Reading email and letters from residents


• Having a booth at Cranbury Day where the TC can interact with residents, I was disappointed there was no TC booth this year


• Reading the cranbury.info site. All the activity is great way to get a sense of what is going on. But, because most posts are anonymous, it is sometimes unclear to determine how widespread a view is held in town by posts on this board but it is a great indicator and a way to learn information.


• I feel there needs to be more openness from the Township Committee to improve communication. I feel there are too many closed sessions and sub-committees. Sub-committees are de-facto closed sessions. Of course closed session for certain matters such as personnel are still needed but they should be kept to a minimum.


• For major decisions (i.e, ball field, new stand alone library), I would propose we have public referendums to truly get the sense of the town. Before we embark on large non-emergency expenditures, a plan and business case should be put together outline expenses and impact, then presented that to town and placed on a ballot. The plan and business case need not be done exclusively by the TC or consultants, concerned residents can help put these plans together where appropriate. There are at least two elections (primary and general election) each year, there should be sufficient time to plan and put these on the ballot without increasing expenses.

Response to COAH on Round 3 Proposed Regulations

I sent the following letter to COAH in response to the Round 3 proposed changes. It would be great if many citizens from Cranbury could send in comments to COAH as well . Responses can be sent to coahmail@dca.state.nj.us

Dear Ms.Voorhoeve,

I want to express my concern over the round three proposed regulations for COAH and the impact on the town of Cranbury. While affordable housing is a worthy goal, the new regulations will have a devastating effect on Cranbury which has diligently worked to fulfill its housing obligations.

Cranbury has been working well with COAH to meet and stay ahead of its affordable housing obligations. However, the new regulations are extremely punitive and it seems that Cranbury is being especially punished. The new regulations could require a one to one ratio of affordable homes for each existing home in Cranbury. The burden on the township would be tremendous in terms of new taxes necessary to support the housing and supporting services. I am sure you are getting flooded with messages from Cranbury. We had a township meeting which overflowed the room with almost 300 people (about 25% of the adult population). I want to point out a few issues:

• Making the rules retroactively effective back to 2004 is completely unfair. There are major new obligations based on commercial property already built or in progress. Making changes based on previously built property does not give the town the opportunity to assess appropriate fees to developers for affordable housing.
• The revised warehouse calculations for number of employees are completely inaccurate. There are far fewer employees in the warehouses than assumed in your new square footage calculation. In fact, the original ratios are also high.
• I don’t understand why there is a need to double the affordable housing inventory in the state. This is especially confusing in this economy.
• New Jersey is already very crowded and we don’t need to double the housing stock in our town. Growth needs to be managed carefully and these rules make development out of control. Small towns are a benefit to the state and we don’t need to turn the entire state into one overcrowded suburb.
• There will be a negative impact with these changes. The new regulations would require a massive tax increase and change in schools. This will chase a lot of people out of the town (and state) and depress property values. The depressed property values will require higher tax rates and make the affordable housing tax burden even more expensive.

I appreciate your attention to these concerns and sincerely hope you review the proposed regulations and change the obligations so that they will be closer to the previous regulations.

COAH Issues - other towns

Cranbury is not the only town with issues with the new COAH obligations, following are links to recent articles about reactions to the new rules.

Princeton council members gripe about COAH

HILLSBORO: Officials call state's COAH calculations unfair

Dept. of Community Affairs Comminssioner Joseph Doria discusses new COAH Rules

Municipalities worried by changes to affordable-housing rules (Middlesex County)

Clinton leads the 7 town group on COAH 3rd round

Affordable Housing Obligation

Cranbury is facing some urgent affordable housing issues. There is a special township committee meeting on Monday night, March 17 at 7:00 pm in the cafeteria of Cranbury school on the topic. This will help put together a response for the 3/22 deadline.

The new round 3 COAH (Council on Affordable Housing) rules could have a devastating effect on Cranbury. I am not sure of the exact figures, a lot of numbers have been thrown around, but the increase in new housing obligations is between 5x or 10x the original round 3 rules. It would be a serious hardship if Cranbury assumed that much new housing, which is 50-100% of the existing housing stock.

What seems particularly unfair is changing the original round 3 rules making it retroactive to previous construction. This takes away our ability to ask builders to shoulder the burden on affordable housing when they are planning their construction.

More will be determined at Monday's meeting and I will keep this updated as things progress on this issue.

Cranbury Press Article - Cranbury hit hard by new COAH rules

Link to the NJ State COAH website giving the rules

Vote for McCain on February 5

I am proud to support John McCain for President. I feel he has the best experience and leadership qualities for our country. His independent thinking and ability to appeal to all people is critical for the next four years. He has on many occasions worked with colleagues in the other party to come up with bipartisan solutions on many important issues such as campaign finance reform. Please join me in supporting John McCain at this Tuesday’s Republican Presidential primary election.

An important note to all registered voters, if you have never declared your party affiliation, you can declare it at the polls and vote on primary day.