From Bloomberg:
Corzine Says Revenue Drop May Force Steeper Cuts
New Jersey Governor Jon Corzine said growing home foreclosures and unemployment are cutting into state tax revenue and he may have to make deeper spending cuts than the $2.7 billion he proposed last month.
Corzine, a first-term Democrat, declined to say how much revenue had fallen in recent months. Collections for December, the last month reported, were $53.1 million or 1.7 percent below projections, according to the state Treasury Department.
“It’s real and we’ve seen a dramatic change in revenue at the state level,” Corzine said today in Trenton during an address to mayors. “This is not the time to raise spending. We need to have cuts.”
The warning comes as the Legislature deliberates on Corzine’s proposed $33 billion spending plan for the year beginning July 1. His budget, which is $500 million less than the current year, would cut aid to hospitals and higher education and eliminate at least 3,000 government jobs. Lawmakers in the governor’s own party oppose his plan to trim $190 million in aid for the towns and cities.
Corzine said the cuts are needed to overcome years of overspending and borrowing in New Jersey that have created chronic budget deficits and a record $32 billion of debt.
“It’s not a pleasant project but it’s one that has to be done,” Corzine told the New Jersey State League of Municipalities. “The dollars aren’t there.”
…
Corzine, in an interview later today on CNBC, said the U.S. economy may go into a worse recession than many expect because of a decline in consumer spending and higher costs for energy and food. He said port shipments have dropped 15 percent, the state lost 9,000 jobs in January and sales tax collections are dropping.The governor told mayors the economic impacts of higher prices for gasoline and health care are contributing to lower revenue. December income tax collections were 1.4 percent below targets, while casino tax revenue was off by 24 percent and motor fuels tax revenue was 33 percent under budget, according to treasury department figures.
New Jersey reported a 4.5 percent unemployment rate in January, up from 4.3 percent a year earlier, the state’s labor department said last month.
The percentage of mortgages in foreclosure in New Jersey nearly doubled in the fourth quarter of 2007 to 1.89 percent from 1 percent a year earlier, according to data compiled by the Mortgage Bankers Association of America.
Senate Majority Leader Tom Kean, a Westfield Republican, said Corzine should immediately cease all non-essential spending and delay any planned borrowing until the governor and Legislature rework his budget proposal.
the state lost 9,000 jobs in January and sales tax collections are dropping
…but it is better than 10K.
“the state lost 9,000 jobs in January ”
Thank goodness we aren’t losing any jobs in NYC!
He also said on CNBC that raising taxes and the toll hike plan would not happen now as he didn’t have the votes
I would like to revise this statement:
Corzine, a first-term Democrat
to
Corzine, a one-term only Democrap who ruined a states economy
#4 I don’t think it’s all Corzine’s fault. I wish he had cut the budget when he first became gov.
Can the US today really compare with Czechoslovakia in 1975?
http://www.guardian.co.uk/world/2008/mar/13/usa.georgebush
#5 Correct I agree with you but he did the opposite.
Corzine increased everything everywhere he could and now he is finally saying the state needs to trim the spending?
Didnt anyone ask Corzine hey wouldnt it be better to cut the fat then see if we need to increase taxes and tolls?
Sorry if you like Corzine but he screwed the state and now he is trying to save face. Too late. The recession compounds him screwing the people of NJ.
re #4,
Corzine is trying to fix something he inherited. I can’t think of a differant general approach that will pull NJ out of this mess. BTW – Don’t underestimate how much we’ve missed out on the war economy boom (I mean we’re closing bases and can’t attract large defense contracts). When that bubble bursts NJ will look a little less shi##y as far as relative job growth/decline.
I like the theory Adami tossed onto the table: the gubmint keeps filling the SPR, then stops buying just before the election.
That’s be a neat- and probably effective- October surprise.
Corzine has his share, but this goes way back through McGreevy, DiFrancesco, Whitman and every lame-a$$ legislator in the state and every lazy-a$$ voter who either voted for the losers out of self interest cause they got theirs or never bothered turning up at the polls.
Plenty of sh*t to spread around.
Just got back from london and flats are so expensive that you can buy them at 25% or 50% equity and the sponsor still has a piece but you pay all cc costs and split profits with sponsor.
btw – three out of four Corzine budgets cut spending in real terms. Debt servicing and meeting pension and revanue shortfalls caused by prior administrations are the biggest problem. Name one program (other than education and health) for which Corzine has increased spending and I can explain to you where the money is coming from. I not his biggest fan…but fair is fair. Don’t just say ” (he) increased everything everywhere he could”…that’s just not true. Beleive me…I’m feeling the pain.
This is a good one, a developer fought like hell to get approval to build this town home complex in Red Bank. He finally gets approval and immediately puts it on the marker.
http://www.redbankgreen.com/redbankgreen/2008/03/hey-getting-app.html#more
damn…i’m glad we don’t have spellingt Nazis on this blog…sheesh.
SPELLING
#10 lisoosh agreed: Starts with the Einsteins’s on the BOE/Local Govt. Especially BOE, as they control far more $’s. For any one who has never gone to a meeting, I suggest you do.
Even if he inhereted the problem why did it take him until now to begin doing something about it.
Raising Taxes and Tolls only seems like compounding a spending problem of the state.
Really if the spending has been there the entire time he was in office why is he now finally getting around to cutting the fat?
Doenst sound like he gave a cr&p to me.
#16 I’d say indication #1 was all the whining from the little hamlets at the merest suggestion that the State might stop subsidizing their specialness.
people need to pay attention to BOE’s etc before they have kids. By the time the young ‘uns are getting into the first grade…it’s too late. It’s like starting to save for retirement at 60.
#17 Special interests, legislators, unions, THE SELF ENTITLED PEOPLE.
Remember a couple of years back, Corzine refused to sign an unbalanced budget, government closed/froze, all the infighting and haggling over details. Remember when he first got in and had to report to being “shocked” at the bad state of financial affairs most of which was hidden by shuffling papers and playing with numbers.
It’s not a Democrat thing or a Republican thing, it’s a Jersey thing.
Oh, and of course, lets not forget. The Bush tax cuts led to cuts from the Fed to the States, especially the big payers-in like Jersey, money that the State had already spent (ha).
More robbing Peter to pay Paul. Sorry, it’s not a Jersey thing, it’s a national thing. Most of the Southern States are huge suckers at the Federal teat too – taking out far less than they pay in – so I don’t want to hear a word about North Carolina because I subsidize your lifestyle with my federal tax dollars.
The piper however is coming to call.
Mitch,
Let’s just agree to disagree on this one. I’m tired.
Question for the Realtors on the site; advice requested:
Here is the situation. I posted a few ads on craigslist a little while back, advertising my investment property for sale. I know this is an awful time to sell, but I’m looking to unload this property because it’s becoming a hassle to manage it; it’s located a decent hike from where I live and work, and the neighborhood has nowhere to go but down.
Anyway, I had some interest, and I showed the place to an individual who appreciated the great considition of the property, but felt the price was too high. He didn’t make any concrete offer, so I didn’t counter either.
A couple of weeks later, I decided to bite the bullet and list with a realtor due to the much, much greater exposure and marketing that realtors have access to and experience with. So, I met with a realtor last saturday, where we toured my property and had a chat.
During the chat, I inquired about the possibility of sharing the ability to list and market the property, whereupon he refused to do so. He did mention that I could come up with a list of “exceptions” that he would allow me to pursue, outside of our formal commitment. I told him I’d think about it and I’d call him monday.
On sunday I emailed the individual who had seen the property previously, giving him a last opportunity to purchase at a significantly reduced price relative to what I had asked initially. I figured if i didn’t hear from him by monday evening, I would sign with the realtor.
Well, monday came around and I decided to sign the contract, as I hadn’t heard from the investor. I met with the realtor and signed a 6 month listing contract, and neglected to bring up the “exceptions” clause, to my eventual detriment.
Come Tuesday, and I decided to check my Spam folder of my email, and lo and behold, there are 2 emails from the investor asking to consider his offer. After several emails back and forth, we came to an agreeable purchase price. Now, keep in mind I’m not looking to make a profit. The price he and I is only 1% higher than my purchase price in 2004.
Now, my quandry is how to negotiate this properly with my realtor. I respect his time and the amount of work he has put in to my listing so far, but I also balk at paying him 6% commission since I found the prospect.
I did speak to the realtor tonight, and he seemed amenable to some kind of negotiation, but I got the feeling that he’s going to push for a commission for sure.
Any advice from the Realtors out there? I’m not looking to take advantage of anyone, nor am I looking to profit from this transaction. I just don’t want to screw myself out of a deal due to unfortunate timing (and inordinately strict Spam filtering by Yahoo).
Thanks in advance.
Holy crap, that was a novel! I apologize for the epic in post 23…
#22 Let’s just agree to disagree on this one.
Agreed.
I wish Senator Dodd was Client #9. Oh, wait a minute… never mind.
Sybarite, if you post his name in another epistle, I’ll e-mail the FTC for you with his name in my e-mail and I’ll ask the FTC if they can help.
Why don’t you include the guy’s e-mail address here, too. I have this spam program…
Just kidding…but how could any business personal morally expect you to pay them a commission for this?
business person
What’s the appropriate interview attire?
Scenario: Large Pharma,small sub
Level: Mid
Position: QA/lab
Well, I kind of understand his position. I signed the contract understanding the terms of the agreement. In my discussion with him, he seemed to imply that he would insist on remaining involved in the transaction, to the end of facilitating all of the activities which have to occur during a RE transaction.
This way, should the deal with the investor fall through, the property still remains marketed and keeps enjoying the exposure in the mean-time.
I’m thinking a fall-back could be to try to negoatiate a 2 – 2.5% commission for him, which would be slightly less than he would have pocketed had he secured the buyer with a buyer’s agent.
I’d like to get some of the agents’ and others’ opinions here since some have decades of experience, and are sure to have dealt with similar situations.
Pat,
Male or female?
Male, I would say business suit, for sure.
Female, same, I guess, or a business dress or skirt or whatever women wear at the office.
lisoosh #21
Reminds me of this exchange I had with my Brother-in-law a few years ago. He lives in Germantown TN. About 15 miles east of Memphis.
Has a 3k sqft home,Excellent schools,Gated community. A town rec center he pays $500 a year for the 4 of them. It has a Indoor and outdoor large pool.Sauna,steam,weight room,tennis cts,Indoor and outdoor Running tracks,Indoor Basketball courts…the works. Property taxes less then 3K.
I ask him,who pays for this? He looks at me and says” YOU do! TN. takes out alot more then it pays into the federal Gov.
# Pat Says:
March 13th, 2008 at 9:40 pm
What’s the appropriate interview attire?
Scenario: Large Pharma,small sub
Level: Mid
Position: QA/lab
Male – 2 piece suit +tie
female – either suit pans/jacket combo ot incase of skirt – either nice button up shirt or button up shirt/nice sweater combo
Sybarite-
I think that you owe the realtor the commission here. You were given the chance to have exceptions. I would resign yourself to paying the 6%. I would then ask the realtor to take 4% to serve as dual agent. If the agent refused, I would leverage the fact that he would only get 3% if the other party were to hire a buyer’s agent. If he goes for the 4%, everybody wins.
Quiz:Analyze the health and strength of this market.
Last sale of property 2003. 200+ unit apartment complex, approx. $150,000 per unit.
Last advertised rent per website:
2/2 1635-1675
3/2 1735-1775
Current rent offers:
2/2 1468
3/2 1570
Multiple units available.
Sybarite Says:
March 13th, 2008 at 9:43 pm
sybs: You signed a contract, in layman’s terms, it means you signed a contract. You even knew enough to consider including clauses for exceptions and you didn’t. In good faith, I don’t see how you can rook your service provider.
Ultimately, it sounds as if you want to do something unethical, and you want some kind of approval from the thread. You screwed up, and you were impulsive and careless.
Al, you are too cute. Thanks to both you and Sybarite (and I love when men try to describe women’s clothes.)
I call my husband’s shirts “blouses” all the time.
21 ‘soosh
That’s a major (and oft-buried) point. NJ subsidizes the whole rest of the country with our tax dollars, especially states like Mitchell’s precious Carolinas. Mitchell, when you talk about how much more efficient NC/SC gov’t is than NJ, it’s a mirage; it’s just that we have the federal gov’t stealing our money and giving it to you.
#34,36
Agreed, and I accept the fact that I signed the contract. However, chifi, I’m not looking to do something unethical IMO. I’m looking for parallel experiences from realtors.
Here are some of the possible scenarios:
a.) the realtor contract is nullified, and I make a whopping 1% more on my sale price vs. my purchase price, which excludes the amount of improvments I made to the property.
b.) the realtor does not allow me to modify the terms of the contract, whereupon if the agreed upon price is executed, I take a loss of ~5% from my purchase price.
c.) the realtor agrees to a 2-2.5% commission, that was earned by simply listing the property on the MLS, putting a sign on the property, and potentially helping to facilitate inspections, etc…
d.) other
Sybarite, I’m not a realtor, and didn’t realize everything the guy would be doing for you until I read your follow-up. But could you toss out for consideration a tiered approach? X% if your lead buys, and original % if your lead drops out?
#40
Ideally, I could and would organize all activities needed for the transaction to take place. I’m thinking that if the realtor forces the issue, I could rationalize him earning a commission if he assisted in the logistics of some of the activities.
If the deal falls through, by all means the terms of the original commission hold. I’m only looking for some negotiation on the commission for a buyer that I found and built a relationship with.
I guess another scenario is
e.) I say f-it, sorry investor, and pretend his offer never existed and see if anything develops from listing with the realtor.
23 sybarite
That S*CKS!!!
Sorry buddy. Hopefully you negotiate something good with your realtor (do NOT tell him who the buyer is until you sign on whatever you negotiate, or you’ll lose the one chip you have).
Unfortunately, much as I tend to discriminate against realtors other than grim, clot and KL (it’s ok, folks, lawyers and bankers are even worse), I agree with chi and d2b – you signed a contract, and even skipped over a chance to give yourself an exception when given the opportunity.
That being said, if he’s willing to negotiate, then by all means do so. Tell him he’d share half with another realtor who helped broker the deal, and since you helped broker the deal, he should “share half” with you.
Then sit back and enjoy having him do the rest of the work.
Then again, I’m interested to hear from clot and rhyming on this one.
Oradell
SLD 820 BELLIS PKWY $579,000 8/1/2005
ACT 820 BELLIS PKWY $599,000 10/5/2007
PCH 820 BELLIS PKWY $579,000 10/26/2007
W-T 820 BELLIS PKWY $579,000 12/18/2007
ACT 820 BELLIS PKWY $575,000 2/2/2008
PCH 820 BELLIS PKWY $549,000 3/13/2008
116 DOM and counting
#43
Agreed. I’m thinking the “share half” approach would be the most honorable approach from all parties. It could work if I can re-negotiate with the investor to bring his offer slightly higher.
Tenafly
SLD 23 OLD SMITH RD $1,000,000 7/13/2001
SLD 23 OLD SMITH RD $1,250,000 6/20/2003
ACT 23 OLD SMITH RD $1,895,000 4/28/2006
PCH 23 OLD SMITH RD $1,780,000 5/23/2006
PCH 23 OLD SMITH RD $1,699,000 7/10/2006
EXT 23 OLD SMITH RD $1,699,000 10/20/2006
EXP 23 OLD SMITH RD $1,699,000 1/29/2007
ACT 23 OLD SMITH RD $1,669,000 6/24/2007
PCH 23 OLD SMITH RD $1,545,000 7/19/2007
PCH 23 OLD SMITH RD $1,460,000 9/4/2007
PCH 23 OLD SMITH RD $1,395,000 10/1/2007
EXT 23 OLD SMITH RD $1,395,000 12/23/2007
PCH 23 OLD SMITH RD $1,345,000 2/5/2008
PCH 23 OLD SMITH RD $1,325,000 2/25/2008
PCH 23 OLD SMITH RD $1,299,000 3/13/2008
541 DOM and counting
Just to put the situation in perspective, the #’s are such: assuming the realtor negotiates for a “share-half” approach, he will be pocketing $8,000 for doing much less than 8 hours of work.
Again, I acknowledge fully that I have nobody to blaim for this but myself, and accept the consequences of signing the contract without exclusions.
42
I think that’s a good bet too. Maybe the guy’s good, and gets you a substantially better deal?
#48
Could be, but I’m a realist. The market is what it is, and if you’re familiar with the area, you know that Hillside doesn’t rank high on the “desirable” list.
Worst case scenario is that the deal with the investor falls through AND no other worthwhile offers materialize. In which case I continue to manage the property until the market is appropriate for re-listing. The place cash-flows positively, so it’s not like I’m paying out-of-pocket to carry the property.
I’ll chalk it up as a learning experience. As they say, these things build character :-)
Throw it out on the table and ask him to come up with a solution. Maybe he will offer to take a lower commission because he will think that you are trying to get out of the contract. Maybe he will offer to take 2%. Push for 3%, settle on 4%, but be prepared to pay the full commission.
Make him feel good about the transaction. What he pockets really shouldn’t enter into the equation. Anything that you pay under 6% is really a gift.
Kid (32)-
Small world. I’m from Germantown.
Syb-
If the agent had allowed you exclusions- or the right to acquire the buyer on your own- and you exercised the exclusion or found your own buyer- would you toss him a bone?
#52
Not necessarily a “bone,” but I did clearly state that I would have reimbursed him for the time and expenses incurred while marketing the property.
I really don’t have an opinion on the whole issue, Syb. Every case is different, every agent is different.
One thing is clear: you signed a contract that on its face puts you on the hook for the whole vig. That’s the “exclusive right to sell” part.
#54
Gotcha; that was my initial take on the situation, and that I would have to take my chances with the listing or shell out the $$ for the loss. After speaking with him on the phone, the realtor did seem like there was some wiggle room, hence I posted the situation up here for some insight.
One other general thought…and this is something many small business people (including Realtors) never figure out:
Going into any enterprise, having it not go exactly as planned yet managing to come out of it with “time and expenses” covered- or, what a casual observer might call “break even”- is, in fact, usually a staggering loss. In order to keep the enterprise going, a small businessperson must generate a profit in the overwhelming majority of situations he enters. Where there is not profit, there is loss. Period. Without gross profit, there is nothing available to cover business costs and taxes. This is where 99.9% of all agents go kaboom, end up levied by the IRS, foreclosed…and wonder where the hell the wheels came off.
The sales cycle of real estate is notoriously slow and real profit margins for the agent are much slimmer than the public will ever know. The loss incurred in a soured deal takes 9-10 successful deals to overcome, as the expenses of taxes, gas, computer, insurance, etc are inexorable.
The typical decent RE agent runs a marginal tax rate of at least 25% and a cost of sales of 35-40%. These are deducted from gross revenues that, for the agent, are usually 35-50% (depending on the broker’s business model) of the total commish on any given deal. Grab a calculator, run some numbers…and you can see that the gravy train the public thinks we’re riding is pure fiction.
56 clot
Excellent disquisition
That works nearly as well to explain (a) why litigators who work on contingency charge so much when they win (because they don’t even cover expenses when they lose) and (b) why you can bet they don’t take cases that they don’t believe are winners (i.e., frivolous lawsuits).
(I’m not a litigator).
njpatient (57)-
Anybody who works on spec for a living has to get used to demanding outsized margin. Business trainers tell independent contractors that it’s a self-esteem issue, but it isn’t. The fact is, those outsized margins are necessary for survival. The best salesperson alive doesn’t close every deal.
Ask any agent how much money he makes in a year, and I guarantee you that he’ll quote you his top line, to the penny. However, 90-95% of all RE agents actually LOSE money- year after year- until they are finally carried out on their shields.
#56-on, Clot,
Thanks for your perspective. That will help me anticipate the realtor’s position when we meet on saturday.
why doesn’t anyone in the media ask him the basic question of staffing?
How does a state increase the state payroll #’s so much in the past 10 years while losing population and private sector jobs the past 10 years?
Shouldn’t the state maintain an avg amt of state personnel per person?
I try to stay out of these things, especially when it seems like the shouting is over, but Mitchell’s garbage on Corzine is nothing more than idiotic partisan hackery.
Short of giving the state his own millions, and fixing everything yesterday, it doesn’t matter what Corzine does or when he does it, Mitchell thinks he’s not doing enough.
I’m just sick of these clowns who look at everything through some bizarre filter that confirms their bias.
#61 I’m sorry if you don’t agree.
However judging from the state’s situation and overall economy of NJ and loss of new business, jobs, income, etc. NJ would have probably gone into recession even if the rest of the country wasn’t.
It not that I don’t think he is doing enough Its that I believe he is doing it in the wrong order. His priorities are backwards. He gets to the real problems but creates a bigger mess before the clean up crew tries to come in and clean things up.
I have one observation. Comparing all the previous Gov’s of NJ. When they first started office and ended in office. What did you pay for Property Taxes, Tolls, Income Taxes, and What did you get back in Homestead rebates.
If you answer that question honestly you will find that Corzine screwed everyone.
Nothing has been cut yet so you cant say he cut any spending. He just didn’t override his butt buddy before him.
Anyone have direct experience w/geothermal? I’m told home heating oil was $3.81 on the spot market yesterday and that’s at the end of the season. $4.50 by October anyone?
I’m talking to a guy about geothermal. Anyone know if it’s viable around these here parts?
#63
I too have been wondering about geothermal. It makes sense much like Hot Water on demand systems instead of a water heater.
The annoying part I run into is that even though Water on demand is essentially connecting 2 water pipes and a gas connection and the addition of an electrical socket they want 5 times the price. The only difference is the electrical socket.
Here is a link to places in NJ.
http://energy.sourceguides.com/businesses/byGeo/US/byS/NJ/byP/geotherm/geotherm.shtml
Ask to speak with a few of the clients.