Month: July 2021

When a Politician Promises to Reduce Taxes, Ask How.

While perhaps not universal, the typical candidate for elected office (especially local office) in New Jersey campaigns on a platform of lowering property taxes.

The hard truth is that any tax decrease requires at least one of the following actions:

  • increased revenue from some other source (usually a different tax, but maybe borrowing) or
  • decreased spending.

Proposals to reduce spending typically take the form of promises of greater efficiency, not hard choices like job cuts (and certainly not identification of specific jobs that would rally supporters of those employees against the candidate).

If you recall, some years ago a governor called a special session of the Legislature dedicated to reducing property taxes. All of the proposals that I saw involved the creation of new or increase of existing taxes to replace property tax revenue. Any reference to new or increased taxes will be vague and will often suggest that “somebody else” is paying and that “somebody else” has not been paying his or her “fair share” previously. (One saying I quite like is “The government that robs Peter to pay Paul can always count on the support of Paul.”)

This behavior is perfectly understandable in a candidate. There will be winners and losers, but candidates naturally emphasize only the winners.

Jay Bohn
July 29, 2021

EO 128 Neither Fish Nor Fowl

A few days ago I posted about an Appellate Division decision which upheld Governor Murphy’s Executive Order 128, which permitted residential tenants to apply their security deposits against rent due during the COVID-19 pandemic. Given the length of the pandemic, this order is of relatively little help to tenants and relatively little harm to landlords. The eviction moratorium is the bigger issue.

We should all recall the initial panic arising from the pandemic’s effect on the economy, coupled with Governor Murphy’s stay-at-home order and the closing of large sectors of the economy. However, few publicly admitted that it would last as long as it has.

Early on, on March 19, 2020, by EO 106 Governor Murphy decreed a temporary emergency moratorium on evictions for the stated purpose of preventing greater spread of COVID if tenants who could not pay their rent became homeless,((Unlike the CDC’s eviction moratorium, New Jersey’s suspension of this legal remedy is not means-tested. The tenant does not even have to allege, much less prove, a loss of income, whether due to COVID or any other factor.)) a moratorium that was subsequently ratified by the Legislature and is now scheduled to end on December 31, 2021. Just over a month later, on April 24, 2020, the governor issued EO 128, which permitted the tenant to direct the landlord to apply the security deposit to rent due. But by that point it was clear that reducing rent arrearages (already accumulated or which would accumulate as the pandemic continued) of those tenants who had stopped paying rent would not cure the default. Even with this relief the tenant is still going to owe rent; at best application of the security deposit to rent would marginally reduce accumulated late charges and interest (if the lease provides for same) and the total amount due.

Given the length of the pandemic, the loss of the security deposit is also of little harm to the landlord. The purpose of a security deposit it to protect the landlord from the tenant’s violation of the terms of the lease, primarily by the failure to pay rent or damage to the leased property. Application of the security deposit to rent due during the lease((As the court pointed out a couple of times, it is common for tenants even in non-pandemic conditions to apply a portion of the security deposit to rent by simply not paying the last month’s rent. The tenant will have vacated the property before an eviction could be effected and the landlord is belatedly made whole by getting a portion of the security deposit. If the last month’s rent plus damage to the property exceeds the security deposit, the landlord is put to the trouble of suing the (former) tenant and then collecting any judgment obtained.)) does mean that there is less (or none) available to address damages, but there is also less rent due. Because money is fungible, the landlord is really in the same position.

There have been various programs whereby the government (meaning of course we taxpayers) will assist tenants with the payment of rent. They have been long in coming. Perhaps the government should have bought up overdue rent arrearages (at par), and then sought to collect (or forgive) it after the pandemic was over. At the least, landlords should have been permitted the same grace periods to pay property taxes on rental housing whose tenants were not paying rent.

But, given the length of the crisis, EO 128 was really a solution in search of a problem. Although it did not substantially help, I don’t see that it substantially hurt either.

EO 128 a Microcosm of Much That’s Wrong with COVID Emergency Orders

On Tuesday the Appellate Division of the Superior Court (New Jersey’s intermediate appellate court and the last word for most cases) issued its opinion in Kravitz v. Murphy, which was a challenge to Governor Murphy’s Executive Order 128, one of the governor’s many COVID-19 emergency orders. EO 128 permits residential tenants to direct that their security deposits be applied to monthly rent. Although the decision is probably legally correct, the order itself is a poster child for much that is wrong with rule by decree during the pandemic.((In one of my earliest posts on this blog, COVID-19 and Emergency Powers I cautioned against the continued use of “emergency” powers to deal with the pandemic. “That the situation is still dire does not mean it remains an emergency in the sense of requiring urgent action. “

In What’s More Important: Process or Substance?, I commented: “While many might accept rule by an all wise and benevolent despot, remember the democracy is a process.”))

The legislative process is a collaborative one. A bill may have many versions and amendments can be made during the process. Few lawmakers would claim that the initial versions of their bills are always perfect. Indeed, administrative regulations, which are a matter of grave concern to me, are subject to public notice and comment and, at least theoretically, the agency can modify its proposal in response to the comments. The process of crafting executive orders is not, to use the current term “transparent” in the least. There is no process by which anyone outside the governor’s inner circle can comment on an executive order before its issuance.

The responses to the pandemic’s economic effects have often been a blunt object rather than a scalpel. The state eviction moratorium assumes that failure to pay rent must arise from the pandemic (or does not care). The CDC’s moratorium (of dubious legality) at least requires a claim by the tenant of an income loss. Indeed, in the early stages of the pandemic last spring and summer, all persons collecting unemployment compensation got an additional $600 which could, and often did, result in a higher weekly take home pay than when they were working.

Less obvious here, COVID executive orders were also looked upon as a way to enact policy preferences not directly related to the pandemic that would not have passed the legislature in normal times and, once in place, they become the status quo. Many of the so-called “voting restrictions” criticized by the traditional media simply attempt to roll back temporary, emergency provisions that were not and would not have been approved affirmatively.

By no means do I think the pandemic is over (anti-vaxxers are seeing to that), but the time has come for a sober reflection on the conditions under which we are going to allow governors to exercise both executive and legislative power under the guise of an emergency.

Jay Bohn
July 22, 2021

It is Time for Vaccine Passports

Last week NJ.com reported that Governor Murphy announced the availability of an app to store an individual’s coronavirus vaccination records. This is a good thing. The vaccination record provided when you get your shot is too big to fit in a wallet and there is too much chance of its getting lost. Or, you put it in a safe place and don’t have it when you need it.

Disappointingly, the state Republican party promptly tweeted negatively about allowing people who chose to be vaccinated this convenience. “’An app that stores our vaccination records? Sounds like a passport to us,’ the state Republican Party said in a statement Monday.”((I thought maybe NJ.com was not being accurate with its quotation, but that’s directly from an @NJGOP tweet.))

Opposition may not be so much to a person’s ability to prove voluntarily that the person has been vaccinated, but that proof of vaccination status may become a condition of entering places or undertaking certain activities. While medical privacy is no doubt important, would you allow Typhoid Mary to get a food service job just because she shouldn’t have to disclose that she will likely infect others?

I will go further than expressing disappointment. According to some political theorists, such as John Locke, who should be revered by libertarian conservatives, one of the few legitimate bases for the existence of government is to prevent one person from harming another or, to go slightly further, preventing activity that creates too great a risk of harm. (That is, after all, the moral basis for the prohibition of drunk driving.) The COVID pandemic is still causing harm and the loosening of restrictions on social activity and of requirements to wear masks was only made possible by the existence of vaccines. Vaccines benefit not only those who have been vaccinated, but the public in general as they make the transmission of the virus less likely to occur. If you are not vaccinated, you are causing an unreasonable risk of harm, especially if you are out in public no longer wearing a face mask.

Cruise lines desperately want to start sailing again, but the passengers need to be assured that the ships will not be floating petri dishes. To provide this assurance, the cruise lines have to be able to require that passengers be vaccinated.

People may have a right not to get vaccinated, just as adults may have a right to drink to excess, but if that right is exercised, the interests of others in reasonable safety justifies restrictions on their conduct (no drunk driving and limits on conduct that may expose others to the virus).

Under current circumstances, I believe that the government could be justified in limiting access to public spaces to those who have been vaccinated and can prove it. Certainly private property owners should have that right. So bring on vaccine passports.

Jay Bohn
July 19, 2021

Convenience Fees Are Decidedly Inconvenient

In a recent article behind its paywall, LehighValleyLive.com (the on-line version of the Express Times) reports that Pennsylvania officials are considering the institution of an “e-commerce convenience fee” in the form of a per-box fee or a tax for online purchases as an additional tax to fund transportation. The theory behind the proposal is that there are some who benefit from the state’s transportation system do not pay for its upkeep or improvement.

But the purchasers of the packages pay sales tax and the trucks that deliver the packages undoubtedly generate gasoline and other taxes. The article does not indicate why trucks delivering e-commerce packages would disproportionately require additional roadway maintenance than say trucks delivering inventory to brick and mortar stores.

This is clearly just a money grab. If Pennsylvania is really concerned about its road network, it would stop diverting a constitutionally mandated funding source to fund the state police.

Jay Bohn
July 15, 2021

Affordable Housing is a Place to Live, Not a Subsidized Investment

It annoys me when people, often real estate agents, say that your house is your most important investment. People should buy a house to live in it, not to make a profit.

I suspect that this “house as an investment” mindset is inspiration for a recent article on NJ.com, 30 years later, a Jersey City affordable housing program sparks controversy.

The article is about Lenora Wright, who bought a two-story home in Jersey City about 30 years ago. The house was “affordable” housing, the quote marks indicating that affordable in this case means that it was sold to her a price below its market value based upon her qualification as a lower-income household.((The article indicates that the house was sold at a below market price with funding from the U.S. Department of Housing and Urban Development.))

When the house was sold to Ms. Wright, it was subject to affordability and occupancy controls. Not only did Ms. Wright have to qualify in the sense that her income was below a certain level, but the controls would also have specified that Ms. Wright had to live in the house as her primary residence and if she were to sell the house the purchaser would also have to be income-qualified and reside in the house and the purchase price could not exceed a certain amount calculated by a formula taking into account changes in prices or regional income.

The form of affordability controls prevalent thirty years ago provided that they would expire after so many years, in Ms. Wright’s case apparently twenty,((Many more recent forms of controls do not expire unless affirmatively released by the municipality.)) but, and here is the main “controversy” in the article, 95% of the difference between the sales price and what would have been the maximum restricted resale price must be paid to Jersey City’s affordable housing program, so that the unit can be replaced.

Because Ms. Wright purchased the home at a subsidized price, it is only fair that she not receive a windfall from keeping all of market sales price. The NJ.com article, however, calls this result a forfeiture and this opinion appears to me to be based upon the “house is an investment” concept:

But critics say it has locked out buyers, many of whom are Black and Brown, from the financial benefits of owning a house.

“The model is not going to get people out of poverty,” said Venus Smith, a Jersey City realtor who has started a petition to end the program. “It’s actually plummeting them back into poverty in their senior years.”

But the purpose of affordable housing programs is not to provide the beneficiaries with a subsidized profit, but with a decent place to live, at a rent or mortgage payment that they can afford.

Jay Bohn
July 12, 2021

Some Reasons Why the News Should be in the Newspaper

Recently I posted some reasons why legal notices should be published in a newspaper rather than only online. In this post I want to give reasons why the news itself is often better in print.

First, a physical newspaper has a publication deadline. While there probably is never enough time, there should be more time to get a piece right than the immediate publication model apparent with on-line news.

Similarly, once an article appears in print, the content (mistakes and all) is forever. An online article can be revised constantly, so its form is never really fixed.

These two considerations lead me to the conclusion that reading a print article is more a shared experience than seeing something online.

Our Flag Should be a Symbol of Unity, Not Division

I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

What could be more patriotic for an American but respect, even reverence, for our flag? Yet I see it being flown upside down in what I take to be a protest against our current government. Cut it out!

While I’m at it, I want to note my disapproval of all modifications of the American flag to make a point, whether it is the American flag morphing into the Gadsden flag going from hoist to fly or the addition of stars to promote the addition of new states, or changing the colors to black and white except for the stripe immediately below the union which is left red (or converted to blue) to honor fire fighters or police officers.

Flying the flag upside down is a sign of a dire emergency; it is a call for help. If we start to categorize a Democratic (or previously a Republican ) government as a dire emergency, we are in trouble. We must stop demonizing those with whom we have a political disagreement. Our public discourse must reflect civility and mutual respect.

Although our country may not yet have achieved all of the aspirations listed in the Constitution’s preamble, we will never do so without respect for all.

Jay Bohn
July 4, 2021((Due to the content of this post, it is being published a day earlier than usual.))

Since When is a Constitutional Right a Mere “Technicality”?

While a criminal trial is an attempt to get at the truth behind the charges, and truth is no doubt important, the system is properly weighted against a conviction. That the prosecution must prove its case “beyond a reasonable doubt,” that an acquitted defendant cannot be retried for the same crime, and that the defendant cannot be compelled to testify against himself are just three of the important protections of the people against a powerful government. The existence of those protections means that we believe them to be so important that we will tolerate a guilty defendant’s acquittal if necessary. When the application of these rights results in the reversal of a conviction of someone whom “everybody” knows to be guilty (perhaps because we believe the media has told us so), there is a tendency to complain that the defendant “got off on a technicality.”

As an example, lets look at the criminal case against Bill Cosby. After being told by the relevant district attorney that the Commonwealth of Pennsylvania would not prosecute certain accusations of sexual assault against him, Cosby answered questions about such charges in a deposition in a civil case against himself. Some of the answers he gave in the proceeding were potentially incriminating and for that reason he could not have been compelled to answer those questions if he faced potential prosecution.

Subsequently, however, a newly elected district attorney decided that Cosby should be prosecuted and his deposition testimony was used against him. He was convicted and has spent the last several years in prison.

Yesterday, the Pennsylvania Supreme Court decided that the actions of the original district attorney should be enforced and that proper remedy would be to preclude the Commonwealth from prosecuting Cosby for those charges. As a result Cosby’s conviction was overturned and he was released from prison. He cannot be retried and the decision is not subject to appeal.((No appeal is possible because the decision was based upon Pennsylvania law and the Pennsylvania Supreme Court has the final say on Pennsylvania law.))

Many are predictably disappointed and of course the decision is being called a “procedural technicality.”

It is not my purpose to say that the Pennsylvania Supreme Court’s decision is right or wrong, and certainly I have no particular insight into the truth of the underlying charges. But the right to refuse to testify against oneself in a criminal matter is an important one, and the government cannot be permitted to defeat that right by what the court called a “coercive bait-and-switch.”

Jay Bohn
July 1, 2021