Tuesday, September 25, 2007

Our Friends at the 7-Eleven

Got a job around the house and looking to save some money? I know of several hard working folk who only charge $10 per hour and are available for immediate work. Where can you find such people? Any day of the week, standing outside the 7-Eleven, next to the Aberdeen-Matawan train station, are several eager beavers looking for work. Of course, it would help if you could speak to them in Spanish. And ignore the fact that they’re here illegally.

Before discussing illegal immigration, we need to first acknowledge several facts.

First, these “undocumented” workers are here illegally. They broke our laws when they came and they break our laws when they stay. The only way for them to be in accordance with our laws is by leaving our country.

Second, it is illegal to employ “undocumented” workers. The “I didn’t know” defense isn’t plausible. All employers have a legal obligation to determine their employees’ residence statuses. Additionally, it would be quite unconvincing for a contractor to claim that he assumed the non-English-speaking Mexicans were here legally.

Yet, we also have great sympathy for immigrants, both legal and illegal. Our country is a nation of immigrants. Our forebears came to this land as conquerors and slaves, adventurers and refugees, skilled and unskilled. We recognize that America is the Land of Opportunity, that these illegal immigrants are coming here, not to steal, but to earn a better life for themselves and their families. And, put in the same situation, we would likely do the same.

Does our town have an obligation, legal or ethical, to enforce those laws that are contrary to our interests? Legally, the answer is no. Law enforcement has discretionary power. We can choose to not prosecute jaywalkers, cars traveling only 5 MPH above the posted limit, or people making too much noise. Ethically, we should enforce those laws that, when not enforced, could pose a danger to the violator or others. For example, people stepping into traffic, driving much too fast, or disturbing their neighbors, should be cited.

Should our town enforce our nation’s immigration laws? Legally, we are not required to do so. Ethically, we should if the illegal immigrants in our town are causing harm to themselves or others.

The three main areas of harm from illegal immigration are crime, healthcare, and education. While these are certainly problems, would they be alleviated in any way if our town unilaterally chose to enforce immigration laws?

As for crime, the answer is no. Our Aberdeen and Matawan are blessed with a very low crime rate and there’s no evidence that illegal immigration is a significant contributor to local crime.

As for healthcare, the answer is, again, no. Enforcing immigration will simply push the immigrants to neighboring towns. They’ll still be using the same area hospitals.

As for education, the answer is, sadly, yes. Over ten percent of our students are classified as learning disabled. Special education services can cost upwards of $50,000 per pupil. There is no way to know how much of this goes to students who are illegal residents because the school does not track such information. In Pyler V. Doe, a divided Supreme Court ruled that the Fourteenth Amendment requires schools to provide the same services to illegal aliens. Still, we are only required to educate children who actually live within our district.

I would not support converting our school staff into law enforcement; however, our elected school board is another matter. As policy, our school board should not authorize any special expenditure on a student’s behalf until the board first verifies the student’s residency status.

Though I agree the child is innocent, I do not believe we should be providing special services at taxpayer expense to children who do not live within our district.

Unless the government at the national or state level chooses to truly tackle the illegal immigration problem, our police are acting correctly in leaving unmolested our friends at the 7-Eleven. Our school board, however, should restrict special funds to students who are entitled to them.
>>> Read more!

Friday, September 21, 2007

Change Property Tax to Land Tax

Tax policies change people’s behaviors. Hence sin taxes are used to discourage certain economic activity. A property tax is a de facto sin tax. When you decide to add a deck to your home, the municipality will tax that deck until you take it down. You want to convert your attic or basement to usable living space? The municipality will tax that space until you make it unusable. But home improvement is not a sin and should not be taxed as such.

Property taxes are determined Ad Valorem, Latin for “according to the value”. Each municipality sets a tax rate and taxes the property according to its assessment. So, if your neighbors work to make your neighborhood more desirable, your taxes go up. If you work to make your home more desirable, your taxes go up. If you do absolutely nothing but happen to be in proximity to a desirable location, your taxes go up.

Meanwhile, the converse is true as well. As neighborhoods become less desirable, their taxes go down. Why would a neighborhood allow itself to deteriorate? Homes require constant investment to maintain their value but many of these “improvements” are punished by taxes so people are often disinclined to make the necessary upgrades.

Furthermore, developers, who are crucial to a community’s growth, are discouraged from any new construction that will incur higher taxes and thereby diminish the property’s value.

For example, the four (slated to become five) Ciaglia homes on Cambridge Rd have been unoccupied for over a year. Each is priced about $650,000 and have estimated property taxes of $15,000. Similar homes that are about a decade old have property taxes around $11,000. Does the town truly believe a new house is worth 35% more than a decade-old house? Apparently so.

(Property assessments have a legal range of +/- 15% of the market value. If two properties each have a market value of $100,000, the municipality could assess one house at $85,000 and the other at $115,000. The second home’s assessment would be 35% higher despite the fact the two homes are worth the same.)

Obviously, Ciaglia knew the risks prior to developing the property and is not entitled to any assistance. But is it in the town’s best interest to make it prohibitively expensive to own a new home?

Another example is the high number of modest 3-bedroom ranches and capes sitting on lots over 15,000 sq. ft. Were it not for the property reassessment, developers could knock down these houses and build attractive modern housing. Nicer homes create a nicer neighborhood and benefit the entire community.

I would suggest the following: While the county continues to tax according to property values, the town could petition for an exemption, allowing it to set tax rates according to the assessed land value. (Disclaimer: I live in a 4-bedroom house on an 18,500 sq. ft lot in a cul-de-sac.)

Since this would aversely affect many homeowners, I would implement the plan over a twenty-five year period. During this period, the town would assess both the land and the “improvements” (i.e. buildings) but reduce the assessment on the “improvements” in 4% increments until it reached zero. Also, to encourage new development, I would cap the assessed value on all “improvements” for single type residences at $300,000 (assuming 100% ratio of assessment to market value).

For commercial properties or multiple dwellings, I would implement similar programs.

Not only would this significantly increase the level of home improvements and benefit the local economy, it would also be an immediate boon to the property values of all homeowners. Owners with high assessments would see their taxes gradually go down. Owners with low assessments would see their taxes gradually go up but would also see an immediate jump in their property values as they become more attractive to developers. The newfound equity would actually reduce the overall tax rate.

The entire community would benefit from increasing property values, new development, and higher living standards. Let’s move from a property tax to a land tax.
>>> Read more!

Wednesday, September 19, 2007

Rezoning Main St.

As reported in the local press, the new owners of 226 Main St. in Matawan want to convert the stately home into office space. Residents are understandably upset. Among the homes in Matawan, this one is truly one of the more magnificent ones. Set back over fifty feet from the street behind an impressive wrought iron fence, the Victorian house is four floors high with a blue exterior reminiscent of mansions in the old south. I, too, want to see the exterior of the house preserved, but I believe the Planning Board should rezone all of Main St. as commercial or mixed use.

226 Main St. was sold to Sonia Santos in 2004 for $555,000. Whatever plans Santos had for the house, never happened. Two years later, the banks foreclosed on the house. Six months after the foreclosure, the house was sold at auction for $450,000. By the time the new owners acquired the property, the house had already noticeably deteriorated from years of neglect.

The new owners were well aware of the home’s condition as well as the fact that they would need the town’s permission to rezone the property. They knew the risks and are not entitled to any special consideration.

As the Planning Board reviews the application to re-zone and modify the house, it's only proper consideration is to determine what's in the town's best interest.

Considering all the amenities Aberdeen and Matawan have to offer (proximity to the shore and the highway, easy commute to Manhattan, modern homes on spacious lots, etc.) the one major drawback is the shopping.

Yes, we have access to all the big box stores on Rt. 35 and Rt. 9 but we don’t have any of the local stores, boutiques, and restaurants that give a town its character. Our restaurants are mostly fast food and diners. Our stores are primarily discount shops.

Our town can’t support higher end shops and restaurants because we don’t have a single street with pedestrian traffic. Not one. Until we develop a street that can attract pedestrian traffic, we will never have the higher end stores and restaurants that are vital to our community’s growth. The only street that could ever generate pedestrian traffic is Main St.

I don’t recommend evicting people from their homes. Rather, I would request the Planning Board to develop a master plan to cover the following areas:

  1. Pre-determine which properties along Main St. have historical or cultural values
  2. Rezone all other properties along Main St. to allow their owners to use them for residential or commercial use
  3. Provide tax incentives for developers to create commercial buildings
  4. Create requirements for developers that all new development must be in accordance with the town’s character and provide necessary parking
  5. Expand Clark St. to allow for a left turn lane onto Lloyd Rd.
  6. Have Monmouth County install signage by GSP Exits 117 and 117A directing traffic to Main St.

Property values along Main St. will jump higher as developers take advantage of the tax incentives. Naturally, many residents will choose to stay in their residences but others will use their newfound equity and move to larger and more modern homes in other parts of town.

Our town needs a real Main St. where people can walk, shop, and eat. Until then, our community’s development will stagnate. >>> Read more!

Monday, September 17, 2007

Reforming Our Schools

My “school philosophy” is grounded in two principles. First, the school’s mission is to develop the student into a productive member of society. Secondly, we have limited resources. Our objective is to provide the best practical education within reasonable budget constraints.

Some of the suggestions are common sense while others are radical. Some can be enforced unilaterally by the school board while others require statutory changes. All of the propositions will encounter resistance, both political and judicial. I also recognize the challenges posed by the unions and other special interests. However, if we’re ever to reform our schools, we must first be willing to discuss all reasonable ideas.

I've tried to adopt the best practices of businesses and universities. The proposals below specifically target the high school. They are in no particular order.
  1. Form a Corporation – Owners (i.e. shareholders) have far more rights, and control, than voters. Create a private company to manage the schools. The company would be jointly owned by local residents over the age of eighteen. Shareholders would be able to pool their votes through a proxy system and force change. All disputes between the shareholders and the school board would be resolved by a local arbitration panel elected by the shareholders. New residents would be issued new shares while former residents would be required to surrender theirs.
  2. Have Partisan Elections – Candidates should be able to identify with parties and run on shared platforms. Then, both the candidates and the parties can be held accountable at the next election.
  3. Make the President Responsible – Presently, no one person is responsible for the ballooning budget or the dismal test scores. The President should be the sole person to submit budgets and present candidates for office (such as superintendent). The school board would have the power to approve or deny. In the event of an impasse, both the president and the school board could present their budgets/nominees to the electorate at the first scheduled election.
  4. Generate Commercial Sponsorships – Pursue corporate sponsorships wherever appropriate, from the athletics department, to vending machines, to computer equipment.
  5. Develop an Alumni Association – Develop an active alumni association along the lines of the university system. Incorporate online systems such as Facebook.
  6. Create Opportunities for Giving – Like the universities, enable donors to dedicate a room, endow a chair, or fund a program.
  7. Create Endowment Fund – Adopt the university model for the creation and management of an endowment fund.
  8. Pursue Grants – Hire a full-time lobbyist to pursue educational and research grants from the government, charitable foundations, and private corporations.
  9. Develop an Emergency Staffing Plan – Contract negotiations should never take place under the threat of a walkout. Be prepared with an emergency staffing plan by pre-certifying temporary workers in the event of a walkout.
  10. Change Teacher Benefits – The school system has enormous pension liabilities and healthcare costs. All new teachers must be given a 401(k) and a healthcare plan in line with private industry. Existing teachers should be offered a financial incentive to move from a defined benefits plan to a 401(k).
  11. End “Use It or Lose It” – The current system forces all departments to use their entire budget or risk having their budgets reduced the following year. Each department should be allowed to save money in special “pet project” accounts and have those accounts be “hidden” from the budget process. While these “pet project” accounts won’t reduce costs, they should curb spending growth.
  12. Create a Bidding System – Work with the local Chamber of Commerce to create an online bidding system that allows the public to comment on preliminary purchasing proposals and encourages businesses to submit competing bids. Outsource when feasible.
  13. Streamline Operations – Officers and directors should share secretaries. All full-time director positions should be converted to part-time positions and offered to existing faculty.
  14. Publicize Lesson Plans – All lesson plans should be available online and available for comment.
  15. Cut Faculty, Hire Tutors – Cut the faculty in half, double class sizes, extend the class day by three hours, and hire two hundred certified tutors to provide individual instruction during the extended hours. At twenty dollars an hour (twice what Shoprite pays), we could hire semi-retired people and top-tiered students to provide individualized tutoring. The students would get a better education, parents would be relieved from doing their children’s homework, and the town would save over $2 million annually.
  16. Measure Performance – Teachers should be ranked by the following criteria – Students’ Overall Performance, Students’ Performance Change from prior year, Student Ranking of Teacher, Parent Ranking of Teacher.
  17. Reward Performance – Teachers should be rewarded according to performance criteria. For example, a teacher might earn a larger bonus turning a C student into a B student than having an A student remain an A student.
  18. Regular Audits – In addition to the financial audit, there should be an annual educational audit. An educational audit should measure the cost of a teacher or administrator against his performance and ranked against the others. A capital audit would review maintenance of school facilities and equipment.
  19. Publicize Financial Reports – All financial reports should be made available online in a regular and timely basis. The financial reports should include all expenditures and the purpose of such expenditures.
  20. Require Minimum Class Enrollment – Any class projected to have fewer than five students should be canceled.
  21. Increase Physical Education – Studies show that students who exercise and eat well also do better at school. It would cost the school half a million dollars annually to have every student enroll in a local gym and participate in an exercise program. Buses could pick up the children at the gyms. Those children who opt out would still be required to exercise at the school.
  22. Create Apprentice Programs – Working with local businesses and colleges, the school should create apprentice programs enabling students to work with professors, mechanics, computer programmers, etc.
  23. Close Extraneous Classes – Just as the school doesn’t teach paleontology, astronomy, or Hebrew, the school could eliminate classes that have little practical benefit, such as Latin.
  24. Alternative Income Strategies – The school building is only used part of the day. During the evening and weekend, the school could offer adult education courses, show recent movies in the auditorium, or create a simple food delivery business from the cafeteria.
  25. Alternative Energy - Use state funds to finance the construction of quiet wind turbines. Estimated annual energy cost savings: Over $250,000
  26. Special Ed - Special education programs normally cost $30,000 - $50,000 per pupil. Limit these programs to legal residents.

I hope these proposals will provoke discussions and lead to action. As for our critics, I have only one response – What are your ideas for improving education and reducing costs?

>>> Read more!