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Analysis: For Christie, Plugging $800 Million Current Budget Gap Is Key

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.

Ongoing Raids

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 of money diverted from the Clean Energy program that 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 transportation debt has already jumped from $11.8 billion under Corzine to $14.9 billion under Christie, 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.

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