Eye on California and New Jersey

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Eye from Albany
February 2005

Eye on California and New Jersey
By Paul M. Bray

California
When Governor Pataki gave his 14th State of the State Address in Albany, I was in California where Governor Schwarzenegger (Arnold or the “governator” as he is referred to in the press) was delivering his first or second State of the State. New York and California are blue states with large economies, big state governments and Republican governors. California has out paced New York in population and economy and in size of its deficit. At $8 billion, California’s deficit is twice the size of New York.

The contrast in the two State of the State addresses was interesting. Arnold in his second year as governor is beginning to make his mark while George has racked up 14 years as governor and we may be seeing his swan song.

In California the Governor used his state of the state to combatively call for “ambitious changes that would reverberate in California and beyond, from classrooms to Congress; drug companies to prisons”. He took aim at powerful public employee unions, liberal democrats and even republican allies. “This is war” declared Brett McFadden, legislative advocate for the Association of California School Administrators.

Arnold’s “make or break agenda” included:
Eliminating guaranteed annual pension payments for new state employees and replace them with money to invest in retirement accounts like a 401(K); Merit pay for teachers; Taking away from state legislators the power to draw boundaries for state and congressional districts and giving that power to a panel of retired judges; Authority for the state comptroller to implement across-the-board cuts in state spending if state spending exceeded revenue and the state legislature did not act on the Governor’s call to close the spending gap (actually a lesser approach than the cap the conservatives are calling for); A promise that nearly 5 million uninsured low-income Californians will be eligible to purchase prescription drugs priced comparably to those in Canada.

Once commentator wrote that Arnold was “investing his political career in a single year of action, and with an opposition party controlling the state house”. Of course, in California there is the wild care of initiative and referendum or taking issues to the people as Arnold promised he would do if the legislature balked.

Back in Albany Governor Pataki offered some reform measures but he was not a combative reformer in the California style. In the words of Times reporter Michael Cooper, “..this year’s State of the State Address sounded more like a look back, and an effort to shape his legacy, than a look ahead at the battles to come later this year. He talked about land he had conserved, taxes he cut, criminal laws he had signed.” I guess in New York State everything is more hunky-dory than California or is it simply that in California the Governor is trying to forge an image while New York’s three term Governor has played all his cards.

New Jersey
Reform of public contracting by limiting the practice of “pay to play” is a major issue in New Jersey. Pay to play refers to elected officials granting governmental contracts based on campaign contributions. The result can be sub par work at higher prices or, it has been alleged, public work sometimes created simply to generate campaign contributions. In the closing days of James E. McGreevey’s administration in New Jersey, the departing governor issued an executive order banning contributions over $400 by vendors doing business with the state. Through initiative a number of NJ municipalities have adopted their own anti-pay to play laws.

Interestingly, support for anti-play to pay goes beyond good government groups like Common Cause and the NJ League of Women Voters to include AARP, NJ Chamber of Commerce, labor unions and taxpayer groups. Jim Leonard, VP for government relations of the NJ Chamber of Commerce, is quoted as saying, “If our elected officials are truly serious about attracting business, and encouraging the ones that are here to stay and expand, they will get rid of pay-to-play….” Business would like to see a level playing field.

States like Maine and Arizona are also on the anti-play for pay bandwagon. I wonder if this isn’t throwing a monkey wrench in to the GOP plans for political dominance. Simply state, privatization of the performance of governmental services creates private sector companies going after public contracts. Republicans, the driving force for privatization and when elected the grantors of public contracts, are likely to be the largest beneficiary of pay to play contributions.

Do you think I am being a bit too cynical? If you do, check out what is happening in New Jersey were the US Department of Transportation threatened to withhold highway money because of the McGreevey’s anti-play to pay executive ordinance. New Jersey caved. Yielding to pressure from the Bush administration, Acting Gov. Richard J. Codey scaled back an executive order intended to prevent political contributions from influencing the awarding of state contracts.

“This is a temporary measure forced on us by the federal government,” Mr. Codey said in a statement. “I am not happy about it. In making this necessary, the federal government is dead wrong. But I cannot jeopardize nearly $1 billion in federal transportation funds.”

The executive order will continue to apply to contracts that are not federally financed.

Procurement laws in New York State are up for renewal, so far, without anti-play to pay on the table. How much longer will New Yorkers have to pay the premium for public contractors having to pay to play?