After months of arguments and anticipation, Gov. Chris Christie and state lawmakers finally took action in Trenton Thursday, with legislators working into the early evening to present him with a $35.3 billion 2016 budget. Christie indicated that he would act on it today, which will allow him to use the budget bill to illustrate his political positions when he announces his candidacy for the presidency on Tuesday.
And while there’s been a great deal of speculation about Christie’s political future, the fate of the budget crafted by the Democrats who control the Legislature carries little suspense. Christie, a Republican, implied that there would be heavy edits coming via the state’s constitutional line-item veto when he spoke last night on his monthly radio show.
“I’m going to take a look at everything,” Christie said on NJ 101.5 FM. “All the spending.”
“This is what happens when the Legislature refuses to negotiate a budget with me,” he said.
Christie today is also expected to outright reject two revenue-increasing measures that won approval during floor votes in both the Assembly and Senate yesterday.
But while Christie’s cuts may be easy to predict, the budget that the Legislature sent to him is more notable for what it omitted that what it included.
For starters, the Democrats did not fully fund the state’s school-aid law and included no stable source of revenue for the state’s Transportation Trust Fund, which pays for road, bridge, and rail improvements. Funding for property-tax relief remained flat, and the budget will let a 9 percent New Jersey Transit fare hike go into effect.
[related]Christie is also likely to reduce funding for the public-employee pension system down to $1.3 billion, the total he included in the $33.8 billion budget he proposed in February. Democrats, using more than $1 billion in revenue that would be raised from increasing taxes on corporate earnings and personal income over $1 million, put $2.8 billion for the pension system in their budget. And a separate piece of legislation also approved yesterday would appropriate another $300 million for pensions from the current fiscal year, which ends June 30.
The pension issue has been a key one for Christie since he took office in early 2010, and it will likely be heavily scrutinized if he becomes a viable candidate in the GOP presidential primary. Christie enacted separate pension-reform laws in 2010 and 2011 and afterward held up those efforts as a national model for other states struggling with heavy pension debt; New Jersey’s pension system has an unfunded liability measuring at least $40 billion.
But last year Christie reversed himself on a major component of the reforms, deciding not to increase state contributions to the pension system after New Jersey failed to produce the budget growth that was expected when Christie and Democratic lawmakers committed to making the bigger payments. In response to the cuts, the state suffered several downgrades by major Wall Street credit-rating agencies, but Christie cast a state Supreme Court decision released earlier this month that upheld his right to reduce those payments as a victory.
Democratic lawmakers in the State House yesterday said they were being responsible by putting the additional revenue from the proposed tax increases into the pension system.
“This is a budget that meets the state’s responsibilities,” said Senate Budget and Appropriations Committee Chairman Paul Sarlo (D-Bergen) during debate on the Senate floor yesterday.
“There is no excuse. The state should balance its budget and pay all of its bills,” Sarlo said. “I think it’s a solid fiscal plan.”
But Sen. Anthony Bucco (R-Morris) said raising taxes doesn’t provide a long-term fix for the pension-funding issue — costs are projected to increase for several more years according to actuaries — and will have a significant impact on the state’s economy.
“It is our responsibility to pass a budget that serves the interests of all New Jerseyans, not just the public sector,” Bucco said. “New Jersey residents who are in the private sector are equally important and vital to our state economy. They need to be supported also.”
The debate in the Senate went on for nearly an hour before the budget passed 24-16 along party lines.
The budget discussion in the Assembly, meanwhile, got started much later in the day and lasted much longer. And with all 80 Assembly seats on the November ballot this year, the debate also drifted into political messaging at times.
Democrats said the issue came down to living up to the funding promises that were made to public workers, who they noted have also been paying more for their pensions as a result of the reforms. But Republicans said the budget problems should have been solved with spending cuts instead of the tax hikes embraced by Democratic leaders.
“The fact is, they didn’t take the hard choices, they took the easy road,” said Assemblyman Anthony Bucco Jr. (R-Morris).
Democrats countered that if Republicans wanted to reduce spending they should have sent them a list suggesting the areas to cut. And they noted that their budget, based on Christie’s original proposal, still leaves unresolved the other problems, including the gaps in funding for transportation and education.
“The question is, what is the alternative to the tax hikes? Shall we simply say we’re not paying the bills?,” asked Assembly Budget Committee Chairman Gary Schaer (D-Passaic.)
“We can no longer delude ourselves by postponing the inevitable,” Schaer said. “It’s not a perfect budget, but it’s a good budget.”
The Assembly vote ended up 47-31, also going along party lines.