new jersey

New Jersey Voters Likely to Support Legalizing Sports Betting

by Michelle Minton on November 1, 2011

in Features, Nanny State, Personal Liberty

http://www.openmarket.org/wp-content/uploads/2011/11/money-chips.jpg

In just one week, New Jersey voters will have their say on whether or not the state should pursue legalizing sports betting.

According to preliminary results, residents overwhelming favor legalization. Yet, even if residents are 100 percent in favor of sports betting, the process of actually making it legal, like a “Jersey Shore” character, is going to be loud and ugly. That’s because there are several federal laws that make the activity illegal in all but four states.

State Senator Ray Lesniak has been attempting for years to overturn the federal ban on sports betting, a ban he believes is unconstitutional. As I wrote almost exactly a year ago, Lesniak attempted to file a lawsuit on behalf of New Jersey against the federal government, an effort that was supported by former Governor Jon Corzine. Current Governor Chris Christie was a little more reluctant to support the attempt and hasn’t shown any change of heart since. The governor’s support is required in order for the suit to have standing in court.

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Regulation of the Day 168: When Chickens Mate

by Ryan Young on April 29, 2011

in Agriculture, Regulation, Regulation of the Day

In Hopewell Township, New Jersey, chickens are only allowed to mate on 10 pre-selected days per year. And that isn’t the only law that poultry must follow. They must be disease-free in order to mate. There are to be no more than six hens per half-acre lot. And roosters must keep their crowing in check — violating Hopewell’s strict crowing regulations means a two-year banishment from the property they disturbed.

Judge Orders More Spending on New Jersey’s Education-Industrial Complex

by Hans Bader on March 27, 2011

in Legal, Politics as Usual, Zeitgeist

New Jersey spends more money on education than almost any state, resulting in the nation’s highest property taxes (and arguably the highest taxes overall). But to some New Jersey judges, the skyrocketing spending is never enough.

A New Jersey trial judge Tuesday declared unconstitutional the state’s recent attempts to scale back rapidly-rising education spending, “effectively tying Republican Governor Chris Christie’s hands on budget and education reform. Superior Court Judge Peter Doyne ruled that Christie’s budget cuts to school aid left public schools unable to provide a ‘thorough and efficient’ education to New Jersey children.”

In his ruling, “Doyne even wrote that despite the ‘significant increase in spending levels from 2000 to 2008,’ some New Jersey districts are moving even further from adequate proficiency. His solution?” Force the state government to give them even “more money.”

For the last 30 years, the New Jersey courts have been using the New Jersey State Constitution’s goal of a “thorough and efficient” educational system to force the state to increase education spending in ways that are anything but efficient. They have ordered that school systems in underperforming urban areas (often run by corrupt Democratic political machines) be given extra money — which has led to huge amounts of waste without increasing student achievement.

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New Jersey Trying to Seize Unused Gift Card Balances

by Ryan Young on January 3, 2011

in Economy, Politics as Usual, Regulation

New Jersey residents with unused gift cards might want to make that trip to Target or Home Depot soon. The state legislature voted to seize the unused balances of all gift cards and traveler’s checks issued in the state before a certain date.

A judge struck down the law, but the state is appealing the ruling. By stealing the gift card balances from their owners, the state could raise up to $80 million.

That’s one way to fix a busted budget. Here’s another: spend less.

Regulation of the Day 160: Sleeping in Public

by Ryan Young on November 19, 2010

in Regulation, Regulation of the Day

In Roselle Park, New Jersey, it is against the law to fall asleep in public. It is intended to address Roselle Park’s homelessness problem. Maybe the theory is that if you pass a law banning homelessness, or at least its trappings, nobody will be homeless anymore.

Or maybe it will merely keep them out of sight, and out of mind. After all, it can be depressing to see people sleeping on benches, at bus stops, and in parks. Especially if they clearly have nowhere else to go. And they can’t have that in Roselle Park.

Image credit: city of delusion’s flickr photostream.

Online Casino Gambling Moves Forward in New Jersey

by Michelle Minton on November 16, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty

As I reported last week, though federal attempts to legalize online gambling have seen little progress in the last year, states’ efforts have shown much more promise. In particular, New Jersey State Senator Raymond J. Lesniak’s attempt to legalize online gambling in the state has made significant progress. Yesterday his bill, S490 and its companion S11, were approved by the Senate Budget and Appropriations Committee and they await a full Senate vote.

S-490 would authorize the state’s Atlantic City casinos to offer online versions of their games to New Jersey and also to international customers. The bill is meant to bridge the state’s budget gap and support the state’s flailing horse racing industry. The Interactive Media Entertainment and Gaming Association (iMEGA) estimate that New Jersey’s intrastate gambling system could raise up to $250 million in gross revenue and $55 million in taxes per year.

According to the text of the bill, the games that casinos would be allowed to offer online include:

[Roulette] Poker, roulette, baccarat, blackjack, craps, big six wheel, slot machines, minibaccarat, red dog, pai gow, and sic bo; any variations or composites of such games, provided that such variations or composites, and any above listed game or variation or composite of such game to be offered through Internet wagering,

The bill also leaves room for the commission to approve other games in the future so long as the game is found to be “compatible with the public interest and to be suitable for casino use after such appropriate test or experimental period as the commission may deem appropriate.”

While it shouldn’t have taken a budget crisis to move this forward and the state should not be subsidizing the horse racing industry, it is a step toward freedom for individuals who wish to gamble. If other states follow New Jersey’s lead and legalized Internet gambling within their borders, states could enter into agreements that allow residents to gamble online at each other’s online casinos. It isn’t perfect, but it is better than a blanket ban.

Image credit: FamilyofFun’s flickr photostream.

Legalized Internet Gambling in New Jersey?

by Michelle Minton on November 9, 2010

in Deregulate to Stimulate, Economy, Nanny State, Personal Liberty

What does it take to get governments to deregulate? You might think the answer is “a miracle” or maybe “drugs in the water,” both of which might be right. However, it seems that another way to move free-market legislation forward is economic crisis. Perhaps then it’s unsurprising that New Jersey has been really pushing the economic liberty agenda, considering they were ranked as having one of the worst fiscal situations in the nation.

Since the beginning of the Great Recession of 2008, we have seen several surprising moves to deregulate online gambling and some surprising people backing legislation because of their belief in defending individual rights, as well as their belief that legalized online gambling could be a monster revenue-raiser.

Since New Jersey has a major stake in the business of gambling, it makes sense that they have led the charge on several initiatives that would increase the ease with which bettors can lay down their dough. For example:

Former New Jersey Governor Jon Corzine supported a lawsuit initiated by New Jersey State Senator Raymond Lesniak declaring unconstitutional the federal ban on sports gambling. Current New Jersey Governor Chris Christie was a little more reluctant to throw his support in that direction.

Yesterday the New Jersey Senate’s Government, Wagering, Tourism, and Historic Preservation Committee met and considered a proposal that would legalize Internet gambling for the state. The bill was sponsored by Sen. Lesniak once again.

Under the provisions of the proposed legislation, New Jersey would receive 20% of gross gaming revenues from the online gambling sites.

According to supporters, allowing online gambling would help alleviate several issues facing the state and its struggling gaming industry. Revenue from online gambling could be used to subsidize horse racing, boost the state Treasury, and help support Atlantic City casinos. Supporters have also said that several thousand support jobs could be created through the legalization of online gambling.

As it seems to always be, the rationale behind legalization is deplorable — it will generate tons of tax revenue for the state — but the result would be an incremental step toward liberty in New Jersey.

New Jersey’s Not-So-Palatial Xanadu

by Marc Scribner on July 22, 2010 · 3 comments

in Bailout Watch, Economy, Politics as Usual, Stimulus to Nowhere

The retail and entertainment development formerly known as Xanadu Meadowlands—recently renamed The Meadowlands—has been plagued with problems since the planning stage. The East Rutherford megamall is located on the site of the Meadowlands Sports Complex, about seven miles west of Midtown Manhattan in Bergen County, and would be the largest retail and entertainment complex in the United States. In addition to the shopping mall, Xanadu was to include an indoor ski jump, a basketball arena, a ballpark, a luxury hotel, and office towers. When the project was announced, it was hailed as the most innovative and expansive economic development public-private partnership ever to be undertaken in the United States.

The 4.8 million square foot project was expected to cost $1.3 billion when developers Mills Corporation—which had originally proposed the mall in 1998—and Mack-Cali Realty Corporation won the winning bid in February 2003. In March 2003, losing developers Hartz Mountain and Westfield America Trust both sued the New Jersey Sports and Exposition Authority (NJSEA), the state agency that owns the Meadowlands property, in an attempt to halt the deal. These lawsuits were ultimately unsuccessful, but the initial optimism over the project was already waning.

The NJSEA and Mills/Mack-Cali originally estimated an opening two years after groundbreaking, which occurred after the development consortium secured a 175-year lease from NJSEA in 2004. In 2005, the New York Giants, a Meadowlands Sports Complex tenant, filed suit in New Jersey Superior Court in an attempt to halt construction of Xanadu. The Giants claimed the project violated their lease agreement by obstructing views from the stadium, among other reasons. This lawsuit was also unsuccessful, but Mills was already in deep financial trouble. In the spring of 2006, Mills laid-off 15 percent of its staff, shareholders had filed suit, and the company was being investigated by several state attorneys general and the Securities and Exchange Commission. The company soon announced it was looking for buyers.

Mills was eventually sold to Indianapolis’ Simon Property Group, which abandoned the project after major lender Lehman Brothers collapsed and other lenders pulled out of what they viewed was a doomed development. Xanadu was then taken over by a new consortium led by Colony Capital, a California real estate investment firm. The project continued to suffer from financing difficulties, which led to ongoing work stoppages. By this time, the budget had ballooned to $2.3 billion. Dan Fasulo, managing director of real estate analysis firm Real Capital Analytics, described the Xanadu project as “too big to fail,” citing massive sunk costs and public liabilities.

In February 2010, it was announced that billionaire Bob Ross’ Related Companies, a major Manhattan developer, was taking over the project. This followed the release of a report authored by the transition team of Governor Chris Christie (R), which attacked Xanadu for its “failed business model” and which called on the state of New Jersey to tell the developers to “open or surrender the property” back to NJSEA. The report concluded:

There is no leasing plan making material on-site progress. The physical activities of construction are at a standstill, if not abandonment. The construction loan is out of balance. There are no monies readily available to finish construction of public areas or tenant improvements. Most, if not all, of announced major tenants have an ‘escape clause’ solely dependent on leasing—or lack thereof.

Officials were confident that Ross would be able to secure $500 million to $700 million in new financing and that an opening date could be expected as soon as mid-2011. However, in early July 2010, the role of Related Companies was still unclear, and the state was mulling the option of providing $180 million in emergency financing in a last-ditch attempt to save the project. Officials are considering tax increment financing (TIF), a method of public financing in which construction debt is financed by expected future tax revenue increases (the increment) that occur as a result of the property included in the TIF district becoming presumably more productive in the future. This, however, carries significant risk—public services may be over-provided, development investment may never materialize, and the likely possibility of harmful real estate market distortions, such as real property malinvestment, should concern local policy makers. A lot.

Regardless of whether or not Xanadu–sorry, The Meadowlands–is ever completed, New Jersey taxpayers will still be on the hook for the stupid mistakes of their unaccountable and shameless public officials. In the future, when “public-private partnership” and “economic development” are uttered in the same breath by some official or developer, New Jerseyites should run the other way. Fast.

Liquor Licensing Overhaul Brewing in NJ

by Michelle Minton on May 24, 2010

in Deregulate to Stimulate, Nanny State, Odds & Ends, Personal Liberty, Sanctimony

Democratic Senator James Beach introduced a set of bills earlier this month that, if passed by the New Jersey state senate, will make it easier and cheaper for restaurants and stores to obtain the necessary licenses to serve and sell liquor. Attempts like this to liberalize the sale of alcohol are certainly a step in the right direction. Though alcohol has been legally served in the US for 77 years, it should be a sobering revelation to every citizen that the impetus for restoring our right to free choice is money and not freedom. Yes, the reforms in New Jersey would be a step in the right direction, but we’ve still got a long way to go before we can really shake the hang-over regulatory policies from prohibition.

Because NJ’s licensing scheme works  much like taxi cab medallions, there is a limited number of licenses available in each municipality and no way for counties to sell their licenses to one another. Two of the bills introduced by Sen. Beach would increase the amount of liquor licenses by allowing their sale at “fair market value,” to other municipalities within the state. A third bill would create an entirely new type of license for restaurants. This new class of licenses allows for beverage sales along with food service at tables. These licenses are unlimited (unless a municipality chooses to limit the number) and the cost to purchase is capped

Wasted Time:

Getting a license to sell liquor in New Jersey is complicated, competitive, and time consuming. Because of their limited availability (each municipality is allowed to issue one tavern or bar license for every 3,000 residents, and one license for a packaged-goods store for every 7,500) they are rare and highly valued. For example, restaurant owner Ron Squillace had to wait 5 years and pay $300,000 before finally acquiring a license to distribute alcohol at his trattoria. That is five years that his BYOB had to compete with all the other restaurants in the area that could offer diners a glass of red wine with their eggplant parmesan.  Currently there are around 9,300 licenses-a decline since the 80′s as licenses have expired. Most small business owners can’t afford that kind of expense, and with a failure rate of about 50% over five years the inability to compete with well-established and chain restaurants that can afford the hundreds of thousands of dollars to buy liquor license, it makes success all that much more difficult.

Buzz-kill: Opposition to Reform:

Predictably, the major opponents to the proposed overhaul-especially reforms that make it easier for grocery stores to sell alcoholic beverages, are liquor store owners. They complain that since grocery stores can sell a greater variety of liquor, are more convenient, and cheaper, that “Mom and Pop” liquor stores will be unable to compete. They may be right. However, their business model is built on a niche created by a regulatory injustice. Nobody would have listened to mobsters or speak-easy owners had they complained that ending prohibition would put them out of business. If small liquor stores can find no other way to compete in the wake of reforms it will be sad, but it will be a small price to pay for economic liberty.

Addicted to the money: It’s only a problem if politicians admit it.

The fact of the matter is that a lot of old alcohol regulation remains in place because of the money and power they generate. Restricting the number of licenses makes them very valuable and because restaurants able to obtain them have a competitive leg up on other establishments owners are willing to spend just about whatever it takes to get them. Take for example, the fact Squillace was willing to wait 5 years and pay $300k in order to compete with other restaurants already able to serve alcohol with meals  waited 5 years and spent at least $300k to obtain the license that would allow him to compete with other restaurants already able to serve alcohol with meals. And who knows how many officials he had to bribe or incentivize to move the process along.

Drunk with Power: Abolish liquor licensing.

The bills introduced by Sen. Beach represent a significant step toward increasing the available licenses in the state and reducing the cost of purchasing a license for businesses. However, it still does no correct the real injustice, which is the government overstepping its authority. It isn’t there to take money from business owners or tell them what they can sell to their customers.

After 77 years of milking the beverage regulation cow, it is understandable that NJ lawmakers are having a tough time walking away from all that power and money.  While increasing the number of available licenses make it easier and cheaper for restaurants and less likely that they’ll fail, thereby increasing tax revenue generated in the state, the need for reform is not about money; it is about the proper role of government and correcting the sins of the past (aka prohibition).

If New Jersey politicians want a vibrant economy and a just government actually of, by, and for the people [all the people not just the politically connected and rich] it should consider abolishing licensing all together; allow all restaurant owners the ability to serve alcohol without the necessity of first paying tribute to the state in order to make a living.

Friday Regulation Roundup

by Ryan Young on March 26, 2010

in Deregulate to Stimulate, Economy, Regulation

Government does more wacky things than anyone could possibly write about in any detail. Listed here are just a few that I dug up over the course of the week. If you have more, I’d love to hear about them.

- 206 occupations require licenses in New Jersey.

- Federal money is paying for a museum exhibit called “Race to the End of the Earth.” (Note: the earth is round.)

- In the market for a new air conditioner? Act fast, because new regulations are on the way.

- The federal government pays for a website that monitors jellyfish sightings.

- Fear not: the federal government has a Potato Research and Promotion Plan.

- Last year, the feds started a Dairy Industry Advisory Committee. Let the rent-seeking begin!

- And finally: 2,000 House staffers make $100,000 or more per year.

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