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Gov. Christie Gets the Budget He Wanted

The Democratic-controlled legislature made $180.7 million in changes to Christie’s budget, but decided not to force a budget shutdown over major issues.

Credit: (Governor Photos/Tim Larsen)

For all the talk of millionaire's taxes and government shutdowns, the state budget accord between Gov. Chris Christie and Democratic leaders this week came down to a few million added here, a few million subtracted there.

The $28.374 billion budget is now slated for final vote early next week, and jockeying among legislators continued into the late hours yesterday. But a new legislative staff report released since the accord found the changes included in the latest deal are more about the little details in the mammoth document than any broad philosophical truces.

No Surplus to Cushion the Blow

For one, the new accord ended up $97.1 million higher than the budget Christie proposed in May, despite the further decline in state revenues projected by the non-partisan Office of Legislative Services in May. The new budget also anticipates a $101.2 million decline in revenues, but essentially pushes the cost of the $97 million in new spending and the problem of how to deal with the revenue drop into next year by lowering Christie’s projected $500.8 million surplus to $300.2 million. That figure amounts to just over a 1 percent surplus, well below the 2 percent or more than the bond rating agencies prefer. The small surplus means that if state revenues come in even marginally lower at any point next year, the Christie administration will have to make further midyear cuts in spending because there is no real surplus to cushion the blow.

Overall, the Democratic-controlled legislature made $180.7 million in changes to Christie’s budget, but decided not to force a budget shutdown over the major issues. Christie succeeded in passing a balanced budget while rolling back the millionaire’s tax, cutting state aid to school districts by $828 million and slicing $848 million in property tax rebates. Democrats will campaign hard on all three of these issues in the midterm legislative elections in 2011. They will take credit in this fall’s Bergen County executive and freeholder races for forcing Christie to back down on his plan to eliminate the popular ban on Sunday sales in Bergen. Christie anticipated Sunday shopping in Bergen would have generated $63 million in additional sales tax revenue, but agreed to use additional revenue expected from tax compliance and corporate audit programs to fill the gap.

Small But Significant Restorations

Some of the most important budget restorations achieved by the Democrats did not involve large sums. It cost just $6.4 million to keep the Garrett W. Hagedorn Gero-Psychiatric Center open—a rare victory for the state’s public employee unions that Christie has attacked so vociferously. A $4 million appropriation to the New Jersey Cultural Trust will keep the Old Barracks Museum fighting the Revolution in Trenton, the Battleship New Jersey afloat in Camden, and the Newark Museum from having to make severe budget cuts. A $3.5 million appropriation will keep the State Commission of Investigation, an independent investigatory body created by the Legislature to probe corruption and waste, independent of the executive branch, a.k.a. the Christie administration. And a $1 million appropriation for New Jersey STARS will preserve the program that provides scholarships first to community colleges and then to four-year state colleges for high-ranking New Jersey high school seniors who agree to stay in-state for college.

View a series of charts detailing the major differences between Christie’s original budget proposal and S-3000, the compromise budget bill that is expected to be approved as the budget for the fiscal year that begins July 1.

Mark Magyar is an adjunct professor in the Rutgers University School of Labor and Management Relations. A former Statehouse reporter, government official and public policy institute director, he served as policy director for the independent Daggett for Governor campaign

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