The List: What to Watch and Listen for in Governor’s Budget Address Today
What will Christie propose to deal with state pensions, transportation funding, taxes and other pressing fiscal issues?
Gov. Chris Christie will present a new state budget this afternoon in a 2 p.m. speech before a joint session of the Legislature in Trenton. Gubernatorial budget addresses are typically longwinded and littered with lots of numbers, so here’s a list of the biggest issues to look out for as Christie, a second-term Republican, introduces a new budget for the seventh time since taking office in early 2010.
1. Public-employee pension funding
Taking on the deteriorating health of the $71.7 billion state pension system has been a big challenge for Christie throughout his six years in office.
In some budgets, Christie has included little or no state contribution to the pension system, which has helped to make the problem worse. But in other years Christie has budgeted more significant state funding, such as the current fiscal year payment of $1.3 billion.
If Christie sticks to ahe put forward last year, the pension contribution in the 2017 fiscal year budget will be at least $1.8 billion. Anything less would mean breaking yet another promise on pension funding, which could mean another state credit-rating downgrade.
2. Transportation Trust Fund
The current five-year, $8 billion plan to fund improvements to the state’s roads, bridges and rail network willon June 30.
So far, Christie has yet to say how he plans to renew the fund. Democratic legislative leaders would like to raise the gas tax to bring in more revenue for the fund, which right now is deep in debt. But Christie is also facing pressure from the right to find a solution that doesn’t involve raising any tax.
He has also talked about striking a “tax fairness” deal with Democrats that would involve raising the gas tax while cutting another tax to offset the increase.
3. Revenue forecast
Though a bit technical in nature, the revenue forecast is essentially the amount of money that Christie projects tax collections will grow by during the next fiscal year, which begins July 1.
The more aggressive the growth forecast, the more money there is to budget for education, property tax relief and other priorities. But if the revenue forecast is too aggressive and tax collections can’t keep up, it could result in mid-year spending cuts, since the state constitution prohibits deficits.
The $33.8 billion budget for the current fiscal year projects just over 3 percent growth, aat the halfway point.
4. School aid
At just under $13 billion, the amount of money the state devotes to K-12 education makes up well over a third of total spending. That includes direct formula aid to school districts, but also includes funds for charter schools and non-public schools and even teacher pensions.
For years, though, the Christie administration has provided onlyto schools.
Changes in the aid formula for schools may be overdue, but it could also mean creating new winners and losers in districts across the state unless the overall pie is significantly increased.
5. Property tax relief
Last year broughtin the average New Jersey property bill – an average of $8,353, and much higher in some counties.
But funding for the state’s most popular property tax relief program, the Homestead Benefit, has remained flat for several years. That means the relief has not been keeping pace for many homeowners, including seniors.
So pressure remains as high as ever for Trenton to deliver more property-tax relief in the budget.
6. Estate tax
Much to the delight of other Republicans and business-lobbying groups, Christie last month called for repealing New Jersey’s estate tax, which is levied on estates worth at least $675,000.
New Jersey also has a tax on inheritances, and the two taxes together bring in an estimated $750 million annually for the state budget.
Repealing the estate tax outright would cost roughly $350 million to $400 million in lost revenue, but Democratsin exchange for the gas-tax hike they think is needed to renew the Transportation Trust Fund.