NJ News & Views

[Editor's Note: On November 13, 2009, this story was edited for style, content and accuracy.]

On November 3, Lakewood voters handed local government a mandate for unrestrained growth that Americans nationwide will have to subsidize.

The state can't afford to finance Lakewood's public policy and neither can the township.

This past spring, members of the Lakewood Township Committee adopted a municipal budget approved by the state that was balanced by deferring over $10 million in July school taxes owed to the district. At the end of 2008, the township certified there was approximately $7.5 million in surplus. After deferring payment of the $10 million to the district, the township had approximately $5.5 million in surplus.

After the November 5 committee meeting adjourned, a reporter for NJ News & Views asked township Manager Frank Edwards how much money the committee currently had in surplus.

"No one keeps track of surplus until the end of the year," Edwards said.

According to media reports, the state employs the same accounting practices.

With a projected state deficit of $8 billion, Lakewood Mayor Robert Singer, a state senator representing the township in the 30th Legislative District, said at the close of the November 5 committee meeting that early financial planning was essential to any New Jersey municipality.

"If you wait till June to get state (aid) figures, you'll regret it," Singer said.

Despite his advice of fiscal prudence, the township has continued to spend money Lakewood and state taxpayers cannot afford by relying on funding generated through the township's Urban Enterprise Zone (UEZ) program.

UEZ funds are generated by a reduced sales tax and by interest earned on loans to qualified businesses.

A sales tax is a regressive form of taxation that is paid by everybody, including those that can least afford it. Under the UEZ program, members are permitted to charge half the state sales tax, which is currently seven cents on each dollar spent.

During the first four year cycle of the 16-year program, which the state recently reauthorized in Lakewood, all sales tax collected by UEZ members goes to the township. During the second and third 4-year cycles of the program, a portion of the reduced sales tax goes to the state. By the final 4-year cycle, all reduced sales tax collected goes to the state.

Russell Corby, former Executive Director of the Lakewood Development Corporation (LDC), which oversees the township UEZ, told NJ News & Views that no loans were made to qualified businesses during 2008.

The township, which is seeking state Plan Endorsement, would like to change that.

During a 2007 LDC meeting, Corby said the state rejected Lakewood's proposal of mixed-use developments to fulfill its retail component for Plan Endorsement. LDC board members and the township committee approved $250,000 in UEZ funding for a new plan.

Last week, Lakewood committeemen approved another $250,000 in UEZ funds to advertise their town to big business.

Years earlier, the neighboring townships of Howell and Jackson each hired the same consultant to achieve the same goal at considerably less expense.

From 1998-2005, Howell Township hired lobbyist Barry Lefkowitz of EDC Consultants Management and Government Resources in Lumberton at a monthly fee of $4,000 plus expenses. Under the terms of his contracts, the township agreed to pay Lefkowitz a 2-3 percent commission based on the amount of state and Federal grants he secured to help develop retail properties.

Lefkowitz told NJ News & Views on November 13 that Howell officials paid him a commission under the terms of his contract.

Although NJ News & Views made an October 16 request under the Open Public Records Act (OPRA) to inspect all file documents related to his employ, including resolutions of hire, contracts, bills for payment and purchase orders, Howell officials did not provide all of them - including records of the amount paid to Lefkowitz in commission or the amount of the grants the township received as a result of his efforts.

Township officials did not provide a written reason for denial of any records, as required under state law. Instead, Howell officials told NJ News & Views there were no records of his employ prior to 2003, even though Lefkowitz and media reports confirmed there were.

Howell Chief Financial Officer Jeffrey Filiatreault told NJ News & Views that Lefkowitz was instrumental in helping several big box retailers to open stores on Route 9, a state highway and high-profile retail corridor.

A Democratic majority on Jackson's former governing body, a township committee, hired Lefkowitz in 2003 based on his success in Howell.

During partisan discussions to renew his contract, Jackson Republicans argued that Lefkowitz did not bring any new commercial ratables to town that would not have chosen to open there on their own.

Both townships declined to rehire Lefkowitz after 2005.

While the commercial ratables Lefkowitz helped bring to Howell did not require school district services and brought needed revenue to the township during their first year on the tax rolls, Filiatreault said state policy in conflict with state finances reduced their benefit to local government in succeeding years.

Filiatreault said the state capped local government spending to provide property tax relief, while continuing to pursue a less fiscally restrained spending program of its own.

One of those state expenditures could turn Lakewood into a city.

On October 29, Lakewood committeemen held a public hearing at Lakewood High School auditorium of a proposed Smart Growth Plan, which would be funded in large part through UEZ taxpayer dollars. Since the state reauthorized the Lakewood UEZ program, effective this month, the township will receive all sales tax collected for the next four years, which is deposited in designated state accounts.

The state Urban Enterprise Zone Authority (UEZA) must approve all LDC approved expenditures before the town can spend UEZ money it has earned.

In documents posted on the township's Web site, professionals of T&M Associates based the need for a Smart Growth Plan on the township's projected population growth.

According to a 2007 American Community Survey used by planners Stanley C. Slachetka and Martin P. Truscott of T&M Associates in preparing the document, the township had population of 86,770 - about 1/100 of the state population of 8,685,920 that same year.

"Of particular note, the Township's average household size and average family size are substantially greater than the County and the State," T&M reported. "In addition the Township's population density is nearly four times that of Ocean County and over three times that of the State average."

T&M also reported that Lakewood's population had grown exponentially over the last three decades.

"From 1980 to 1990 Lakewood's population has increased by approximately 6,500 persons," T&M reported in the Smart Growth Plan. "Between 1990 and 2000, Lakewood's population grew by another 15,000. Based on current estimates, Lakewood will have added an additional 30,000 persons between 2000 and 2010, corresponding to a 50 percent rate of growth per decade."

Last year, Singer told NJ News & Views that Lakewood was a college town.

Lakewood is home to Georgian Court University and Beth Medrash Govoha, described by many sources as the world's largest rabbinical college.

As student enrollment has grown at Beth Medrash Govoha, so has the township. As a result, most new residential construction is expected to consist of multi-family affordable housing for adult married students and their extended families.

"This population growth fuels a continuing and growing demand for housing," T&M said. "For example, Lakewood's current average family size is approximately four (4) persons. This average includes the approximately 8,000 senior housing units in Lakewood, which suggests an even larger household size for the other existing non-age restricted housing units in Lakewood."

T&M estimated a doubling of Lakewood's housing stock over the next two decades.

Those estimates may be premature.

According to a spokesperson for the Ocean County Board of Elections, as of October 16, 2009, Lakewood had a total of 37,928 registered voters. Of that total, 11,837 were registered Republicans; 6,874 were registered Democrats; 19,199 were unaffiliated; 3 were registered Conservatives; 6 were registered members of the Green Party; 6 were registered Libertarians; 1 was a member of the U.S. Constitution Party; and 2 were members of the Reform Party.

On November 3, 2009, 19,092 registered voters - 50.34 percent of all 37,928 registered Lakewood voters - turned out on Election Day to vote in the township's 38 precincts. By an overwhelming majority, voters re-elected Committeemen Marc (Meir) Lichtenstein, a Democrat, and Menashe Miller, a Republican, to a third 3-year term on the local governing body.

Voters rejected a bid by former Democratic Committeeman Charles Cunliffe to return to public office for a fifth term as an Independent candidate with his running mate, former LDC member Lynn Celli.

Lakewood voters also rejected the re-election bid of Democratic Governor Jon Corzine, who received the endorsement of the Vaad, in favor of Republican challenger Chris Christie - as did the rest of the state.

The Vaad is a political interest group that makes endorsements for elected office. Because the Vaad can coerce a large bloc of Orthodox Jewish voters to elect endorsed candidates, the Vaad is also an influential government lobbyist.

According to media reports, representatives for both Corzine and Christie sought the Vaad's endorsement in what was believed to be a close election, according to pre-election polls. However, sources told NJ News & Views that the Vaad endorsed Corzine over Christie because members believed his Democratic Party affiliation would bring the most Federal funding to Lakewood since President Barak Obama is also a Democrat.

Orthodox voters opposed to Corzine's support for gay marriage reportedly turned out in large numbers to instead elect Christie, whom they felt was less likely to promote a liberal social agenda. While Orthodox voters spurned Corzine's bid for another term, they helped re-elect the Vaad's other endorsed candidates, Lichtenstein and Miller.

A higher percentage of Lakewood voters turned out last year to unsuccessfully elect Republican candidate John McCain for President.

A higher percentage of Lakewood voters were also eligible to vote in last year's general election.

On November 4, 2008, a presidential election year, 27,750 registered voters - 70 percent of all 39,640 registered Lakewood voters - turned out on Election Day to re-elect Democratic Committeeman Raymond Coles and elect first-time committeeman, Republican Steven Langert.

In one year, the total number of registered Lakewood voters dropped by 1,712, even though the Vaad's political influence is dependent on the total number of voters the group can turn out for each election.

Earlier this year, adult residents of Pine River Village told committeemen that Somerset Development LLC could not afford to finish building out their development unless its age restriction were removed.

Commercial property developers may be even less willing to invest in Lakewood, which permits home-based businesses in competition with them to open unregulated anywhere in town.

Rosenet.org, a Web site dedicated to the Borough of Madison in southeast Morris County, 15 miles from Times Square in New York City, examined a school of municipal planning known as the Ratables Chase.

"The theory of ratables sounds good to municipal officials who are struggling to balance a short-term budget," the Web site noted. "If a commercial development pays more in taxes than it costs in services, then this surplus can be used to hold down the residential property taxes of the residents (their voters.)"

Rosenet.org told visitors that the ratables chase was a never-ending quest for new sources of municipal revenue.

"Officials are often mystified a few years later when their budget is still in trouble, so they seek out another infusion of funds from another good ratable," the Web site said. "In many New Jersey communities, this cycle has spiraled out of control, transforming rural hamlets and semi-rural towns into sprawling corporate centers, mind-numbing housing developments, and sterile malls. The only things that remain constant are budgets in trouble and the misapprehension that a good ratable will solve the problem."

The Web site included a 1992 study of all 59 Morris County municipalities, which it used to support the need for citizen involvement in municipal planning decisions.

"Local citizens can protect their communities from these bad business decisions by playing an active role in local and regional planning," the Web site advised. "Make the calculations. Make your views public. Make a difference."