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State Street: Oft-vetoed foreclosure bill finds a home with incentives overhaul

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Ray Lesniak hopes linking his foreclosure bill to the much-anticipated incentives revamp will get the measure passed after a pair of vetoes.
Ray Lesniak hopes linking his foreclosure bill to the much-anticipated incentives revamp will get the measure passed after a pair of vetoes. - (AARON HOUSTON)

Sen. Ray Lesniak (D-Union) is trying again to push his Residential Foreclosure Transformation Act into law, this time by linking it to a popular revamp of the state's business incentives.

"Maybe as a part of the overall economic incentive/job creation/economic development proposal it has a better chance of getting the governor's approval," Lesniak said.

The foreclosure act would allow the state to buy foreclosed homes from institutional lenders for use as affordable housing. It's won praise from bankers and housing advocates, though that hasn't made its plight in Trenton any easier.

Lesniak introduced his first "Foreclosure Transformation Act" in February 2012 as S-1566. The bill, which included a measure to expedite the foreclosure process, passed the Legislature in June, but was vetoed by Gov. Chris Christie the following month.

Shortly thereafter, Lesniak introduced a pair of bills, separating the foreclosure speed-up and affordable housing measure. Assemblyman Jerry Green (D-Plainfield) signed on as a sponsor of the latter bill, S-2157.

The foreclosure speed-up, S-2156, cleared both houses of the Legislature in October, and was signed by Christie on Dec. 3. That's the same day the Legislature sent S-2157, the foreclosure transformation, to Christie's desk, but that measure was returned with a conditional veto.

Lesniak's incentives revamp, meanwhile, is expected to get broad support. It would pare down the state's package of incentive programs to more tightly focus the state's efforts on job creation.

Lesniak's Assembly counterpart, Albert Coutinho (D-Newark) introduced his version of the bill last month, and the measure won a positive reception in the business community. Lesniak's version is expected to receive a similar response, though his decision to staple it to the foreclosure bill adds a new wrinkle to its prospects.

Then again, maybe not.

Lesniak noted one of his other pet causes, Internet gaming, has required similar persistence. Christie vetoed the Legislature's first I-gaming bill in 2011, then conditionally vetoed a second measure earlier this month. The conditional veto, however, included conditions the Legislature appears likely to concur with, so it's highly probable an Internet gaming bill will be signed into law this spring.

Lesniak hopes his foreclosure act can find a similar fate.

"It took two shots, two bites out of the apple, to get Internet gaming signed," he said. "Maybe third time's a charm."

Quietly charged to
lead fight over fees

American Express has kept a low profile in the debate over credit card surcharges. The company registered its support for a bill banning surcharges at a Feb. 4 meeting of the Senate commerce committee, but no one from the company testified. A representative for AmEx said they don't comment on pending legislation.

But talk on State Street is that the company isn't such a passive player after all.

"We've heard behind the scenes that actually AmEx is the biggest company behind this," a Trenton insider said.

The surcharge bill came about because Visa and MasterCard changed their policies Jan. 27 to allow retailers to use surcharges to offset the swipe fees Visa and MasterCard charges retailers. The policy change is one concession included in a proposed settlement related to charges by retailers that the credit card companies are colluding to keep swipe fees high.

The source says if surcharges were allowed, consumers would be discouraged from using high-swipe-fee (and thus high-surcharge) credit cards.

"Right now," the source said, "there's no competition."

American Express has some of the highest swipe fees in the industry, so it has the most to lose if customers suddenly had reason to use the lowest-swipe-fee card.

Backing away from a
potential compromise

The day many business groups have feared came to fruition last week when the state's minimum wage referendum cleared the Assembly, the final step needed to put the question on the ballot.

If approved by voters, the referendum will change the state's constitution to raise the minimum wage by a dollar and enshrine automatic increases based on fluctuations in the consumer price index.

Publicly, the die appeared cast well before last week. Senate President Stephen M. Sweeney (D-West Deptford) had made clear he would push through the referendum if Christie vetoed the Assembly's minimum wage bill, which achieved the same ends without the constitutional referendum.

But privately, some State Street sources said, a ray of hope emerged early last week when Sweeney appeared,

according to some, to be open to last-minute negotiations. Nothing ever came of it, though, and the resolution calling for the referendum cleared the Assembly on Thursday.

"We actually had some hope," said one source, on the eve of the Assembly vote. "And that balloon has completely popped."

The no-negotiation complaint echoes similar complaints lodged by Christie against Sweeney and the Assembly Democrats. The governor has said legislators refused to budge on the issue, despite an apparent willingness by the governor to talk.

That meant Christie's conditional veto of the minimum wage bill was his only chance to put a formal offer on the table. That offer — a phased-in $1 increase — was seen as an acceptable compromise by many business groups, but it proved to be a nonstarter with Democrats.

Expecting little fire
in coming budget battle

Christie's budget address next week is expected to offer answers — or, at least, educated guesses — as to how the state's revenue picture will end up, given the under-budget revenue growth of the first half of the fiscal year and the potential revenue infusion from Hurricane Sandy reconstruction.

Michael Affuso, senior vice president and director of government relations at the New Jersey Bankers Association, says he's not expecting any major policy shifts.

"What may actually end up happening is that it just becomes a very quiet budget, because there's not a lot of room to maneuver," he said.

Affuso doesn't think we'll see a large tax cut proposal or revenue enhancer. He thinks both sides are too hemmed in for such a proposal.

"My personal belief is right now they're locked in at $30 billion and floating around $30 billion, that's where spending is," he said. "It's just about how do you allocate the $30 billion."

He said another Sandy question is which budget the storm-related revenues will affect.

"The only question is, when are those tax receipts going to be received?" he said. "I would think they'll be received in current fiscal year."

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