NJ Budget Problems Add to Christie 2016 Challenge

Wednesday, 21 May 2014 07:13 AM

 

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As New Jersey's fiscal outlook worsens, Gov. Chris Christie is fighting to ensure that a traffic scandal is the worst of his political problems as he eyes a 2016 presidential campaign.

The Republican governor this week has been forced to address a gaping budget deficit that threatens to complicate an already messy second term. The renewed focus on Christie's economic leadership highlights his state's poor record on foreclosures, job growth and credit ratings only six months after a triumphant re-election speech in which Christie cast himself as a can-do leader driving a New Jersey comeback.

On Tuesday, Christie blamed Democrats who control the state Legislature, among others, for his state's latest budget troubles.

"They can't say these are my policies when they have been total partners in these policies," Christie said of Democrats. "They're not just mine, they're ours. And the fact is, the ones I've proposed they haven't wanted to do."

Earlier in the day, state lawmakers met to continue probing a apparent political retribution plot by the Christie administration, which clogged traffic on the George Washington Bridge last fall. Fallout from the so-called Bridgegate investigation already knocked Christie from his top-tier status among the early field of potential Republican presidential hopefuls. The fresh economic challenges could further taint his 2016 prospects, especially given his competitors' records.

Christie is set to appear at a Republican Governors Association event in New York on Thursday alongside Wisconsin Gov. Scott Walker and Indiana Gov. Mike Pence — two prospective presidential candidates whose states boast unemployment rates at least a full percentage point better than New Jersey. It's the same for Louisiana Gov. Bobby Jindal and Ohio Gov. John Kasich, ambitious Republican governors with significantly better economic numbers than Christie.

Specifically, the Christie administration says it must close a $1 billion budget gap over the next six weeks and at least $1.75 billion more for the coming fiscal year. Analysts suggest that next year's budget hole could be far deeper.

Christie on Tuesday announced a plan to slash public-worker pension fund contributions over the next 13 months to close the gap. Democrats quickly attacked the plan, which rolls back a significant change Christie once supported to fund the state's pension obligation.

The budget troubles have been exacerbated by weak economic growth in recent years as the state's economic recovery lagged behind its neighbors and the nation.

New Jersey has recovered less than half the private-sector jobs lost during the 2009 recession, while enduring one of the Northeast's highest unemployment rates and the nation's highest share of mortgages in foreclosure. Property taxes are the highest among the 50 states this year as a percentage of median income.

"Christie's economic record has been a disaster," said Democratic National Committee spokesman Michael Czin. "Just like with Bridgegate, he blames everyone else, but he's been there for almost five years."

While he was on the defensive Tuesday, Christie often describes his fiscal policies in hawkish terms.

He says he has held state spending to 2008 levels, trimmed the state workforce by 6,000 positions in four years and wrested significant benefits concessions from government workers and retirees. He also slowed runaway property tax growth to less than 2 percent — its lowest rate of increase in 20 years.

That has done little to alleviate analysts' concerns about New Jersey's fiscal health.

The three primary ratings agencies — Fitch, Standard & Poor's and Moody's — have downgraded New Jersey's credit rating twice each during Christie's tenure. Moody's did so most recently last week, while an analyst there predicted a budget deficit in the coming year far larger than Christie outlined Tuesday.

"After several years of missed revenue targets and reliance on nonrecurring resources, and now this late-arriving revenue shortfall, we calculate about a $3 billion budget gap for fiscal 2015, which just indicates the level of challenge the state will face," said Baye Larsen, vice president and senior analyst for Moody's Investor's Service.

Christie has refused to authorize any broad-based tax increases to help balance the budget, swatting away repeated attempts by Democrats to reinstate an income tax surcharge on taxpayers earning more than $500,000 a year or raise the gas tax, which is among the nation's lowest.

As a result, the fund for roads and bridges will run out of money within months. The pay-as-you-go transportation program Christie introduced four years ago has fallen short of expectations. Tolls and fees have risen during his tenure.

At stake is Christie's fiscal conservative reputation — a key to a possible presidential run — although one of the nation's leading fiscal conservatives said he doesn't blame Christie for the budget mess in a state long led by Democrats.

"If you're on the Titanic and the whole thing's going down, it's a little rough to be mad at the one guy who is putting people in lifeboats," said Grover Norquist, president of Americans for Tax Reform.


© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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