Christie Casts Generous Light On Fiscal Record

Christie Casts Generous Light On Fiscal Record

By Maddie Hanna, The Philadelphia Inquirer (TNS)

TRENTON, N.J. — In his appeals to a national audience, Governor Chris Christie (R-NJ) is promoting a record of fiscal accomplishment in New Jersey: cutting spending, shrinking the state payroll, and bucking Democratic demands to raise taxes after years of excess in Trenton.

“If we did it in New Jersey…for God’s sake we can do it in the United States of America,” he recently told a crowd at a Republican dinner in New Hampshire, after describing $2.5 billion in cuts to spending and an 8,000-person reduction in the state government workforce.

Generally unmentioned in Christie’s pitch — which the governor recently has been making everywhere, from town-hall-style meetings in New Jersey to speeches in Washington — are numbers that cast a less favorable light on his record.

That includes a total of eight downgrades of New Jersey debt by the three credit-rating agencies during his tenure as the state has confronted successive revenue shortfalls _ the product of his administration’s overly rosy projections and a lagging economic recovery.

Christie speaks of 150,000 private-sector jobs created on his watch, but in job growth, New Jersey has trailed much of the nation.

He touts a reduction in the use of one-time fixes to plug budget holes, though he filled last year’s gap by cutting more than $2.4 billion in scheduled pension payments, backtracking on the terms of a law he signed in 2011 that was intended to stabilize the long-underfunded system.

He has also delayed property tax rebates, which help ease the burden for many homeowners in a state with some of the highest property taxes in the nation.

The governor has also not achieved a transportation plan he announced in 2011 that called for increasingly paying for road and bridge projects with cash rather than borrowing.

All state appropriations to the Transportation Trust Fund now go toward debt service, and the fund will hit its statutory borrowing limit in the fiscal year beginning July first.

Christie recently said the trust fund’s outlook was “not a crisis.”

The challenges complicate Christie’s presidential chances in a race expected to feature rival governors who also have home-state accomplishments to trumpet.

“He knows that once this primary comes up, his opponents will surely call his record into question,” said Brigid Harrison, a political science professor at Montclair State University. “And we know that will be particularly true with regard to the governor’s handling of the state’s economy and the state’s budget.”

“Every candidate running for president has tried to put the best light on what they’ve done,” said former Republican Governor Thomas H. Kean Sr. “That’s not unusual.”

Since his budget address last month, Christie has pushed for more pension and benefits changes — which he has described as “the last big fiscal problem to solve in New Jersey.”

His summary of his economic record features a dire picture of what he faced when he took office in January 2010.

“I inherited a government that by the second pay period, March 2010, was not going to be able to meet payroll,” Christie said at the New Hampshire dinner. “Imagine that.”

At the time, New Jersey “was facing a very, very severe fiscal problem,” said Joseph Seneca, an economics professor at Rutgers University and former chairman of the New Jersey Council of Economic Advisers. Before the recession, the state had been raising taxes to pay for its spending — and when the recession hit, its income tax revenues fell by 15 percent, Seneca said.

Christie, who had to fill a $2.2 billion midyear shortfall as he took office, “cut school aid, municipal aid, county aid, property tax rebates, and wouldn’t raise tax rates,” Seneca said. “It was a difficult thing to do.”

Adding to the challenges was the state’s chronic neglect of the pension system, resulting in a looming unfunded liability.

Christie worked with Democratic lawmakers to gain concessions from public workers while agreeing to ramp up the state’s payments into the system.

But those plans took a turn after income tax collections missed their mark last spring. Christie lowered revenue estimates for fiscal years 2014 and 2015 by $2.75 billion, also scaling back contributions to the state pension funds for the two years.

New Jersey’s budgeted revenue assumptions — projections put forward by Christie and approved by the Democratic-led Legislature — “have been very optimistic, considering how slow the economic recovery has been,” said Baye Larsen, vice president and senior analyst for Moody’s.

Democrats blame Christie for failing to grow the state’s economy. Last year, New Jersey ranked 48th in job growth, according to data from the U.S. Bureau of Labor Statistics.

“What he’s been successful at getting away with for years is…’Look over here, don’t pay attention to what’s going on,'” said Senate President Stephen Sweeney, D-Gloucester. “The problem is the economy.”

Christie says Democrats have limited his ability to effect change by blocking tax cuts.

“I don’t know exactly whose economic plan has been implemented or not,” Christie said at a New Jersey Chamber of Commerce event in Washington in February. “But what I can tell you is, I’m going to continue to take responsibility for fighting the fight to make this state more affordable.”

Christie and lawmakers did agree on a five-year business tax-cut plan and an expansion of the state’s economic incentive program.

Critics say the measures are corporate giveaways that haven’t worked, while proponents argue they have made the state more business-friendly.

“We can’t expect we’re going to see the results of a program like that immediately,” said Michele Siekerka, president of the New Jersey Business and Industry Association.

The governor also claims success reining in property taxes, thanks to a 2010 law that has capped annual property tax growth at two percent. At the same time, he has delayed property tax rebates — including this year for more than 820,000 homeowners who expected to collect an average $469 benefit. Benefit amounts also have been cut.

Overall, the state’s budgets have grown. Christie’s proposed budget for the fiscal year beginning July first is $33.8 billion; his first budget proposal, in 2010, was $29.3 billion.

Larsen, the Moody’s analyst, said that based on the state’s growth last year, the 3.8 percent revenue growth anticipated by the administration “will be a high target for them to reach.”

She also points to one looming budgetary challenge — a court ruling against Christie that could make it more difficult for the state to cut future pension contributions.

Christie supporters say that the governor inherited many of the current challenges and has fought for reforms.

“If you forget where we started, it’s easy to ignore how far we’ve come,” said Assemblyman Declan O’Scanlon, R-Monmouth.

Photo: Michael Vadon via Flickr


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