That doesn’t mean New Jersey can really afford the full FY18 $1.4 billion phased-in cost of the 10 percent across-the-board income tax that Christie originally proposed in 2012 or the property tax credit of up to $1,000 that Sweeney proposed as an alternative -- or that such a tax cut would be preferable to the increased spending on transportation infrastructure and higher education and K-12 schools that New Jersey Policy Perspective’s MacInnes proposes instead.
Furthermore, the only way Christie could propose such an easy-to-swallow budget for FY15 would be to continue to rely heavily on one-shot budget gimmicks that add to New Jersey’s debt, which climbed last year to $78.4 billion, keeping the state among the top five in the nation in per capita state government debt.
Christie will undoubtedly still need to continue to raid $300 million from the Clean Energy Fund and dedicated environmental funds, which would bring the total amount ofthat is funded by surcharges on customer utility bills to well over $1 billion in Christie’s five budgets.
The governor will most likely continue to divert most or all of the $324 million in New Jersey Turnpike Authority toll money intended for the Transportation Trust Fund to the general budget, and probably skip most or all of the $166 million in state tax revenue payments that are supposed to go into pay-as-you-go transportation projects next year under the Transportation Trust Fund refinancing he announced after cancelling the Access to the Region’s Core (ARC) rail passenger tunnel project.
That would lead to a further increase in the state’s annual transportation debt payments. With Christie paying a historically low 2.4 percent in pay-as-you-go financing, New Jersey’s, with annual interest payments topping $1 billion last year.
For Christie and for past governors, however, the political cost of pushing off fiscal problems into the future and overrelying on one-shot revenues and budget gimmicks has always been outweighed by the budget relief such maneuvers provide.
For Christie, who desperately needs a FY15 budget with a tax cut if he is going to begin the long slog back from Bridgegate and other scandals, it’s an easy choice.