Schaer discusses looming budget crisis

NJ Spotlight News | May 30, 2017 | Politics
Assembly Budget Committee Chair Gary Schaer says the state can't afford to keep spending.

State lawmakers have precisely one month to finalize Gov. Chris Christie’s last budget. How much of his wish list remains intact is an open question, but the person who knows more than most about the process is Assembly Budget Committee Chair Gary Schaer. He joins NJTV News Correspondent David Cruz to discuss current budget negotiations.

Cruz: So, this is your fourth budget process as chairman?

Schaer: As chairman, I believe it’s four.

Cruz: Where is now? I mean, we’re about a month away from the end of the fiscal year, where is the budget hearing process?

Schaer: We are exactly where we should be, David. The budget process begins when the governor presents his public address. In February, he then sometimes in March, hands the Legislature his actual budget with all the particulars in it. Both Senate and Assembly meet separately with the various commissioners, the departments of the state, to better understand what the priorities are as the governor would have them versus how the Legislature would have them. The two houses then meet together, craft in some fashion a response of the governor’s budget. The governor then has the option to lower or eliminate any items in the budget, but he cannot add to any items.

Cruz: So this is a state where the governor not only has the line-item veto, but he also certifies the numbers.

Schaer: That’s correct. He’s the one who determines how much revenue will be coming into the state.

Cruz:  Real or imagined, right?

Schaer: Well, he has not hit it right since he came into office. Not for one year has the budget been correct. And I will tell you this year is particularly damaging, because of the tightness of the budget on the one hand, and on the other hand, having just learned a few days ago, a few weeks ago, that the governor’s numbers are under-performing by over half a billion dollars.

Cruz: Yeah, I’ll get to that in a second. I asked you about the governor’s power because does that in a way kind of make this whole budget process seem moot?

Schaer: No. Clearly the Constitution provides the governors, the chief executive with extraordinary power. The governor is in fact the most powerful governor in all 50 states. The reality is it provides the Legislature with the ability to reflect its own priorities and to put those priorities into the budget. It provides that the governor can line-item them out or lower them, but he can’t add new items in and can’t expand what the Legislature has provided.

Cruz: So the Office of Legislative Services says there is a $687 million projected hole in this budget. It reminds me of the line, 687 million, pretty soon you start talking about real money. So what do you understand the deficit to be? Is it 687, or is it closer to the number from the Governor’s Office?

Schaer: Basically the way that you can phrase it, you can phrase it any way that you want to, but the response that I think that everyone is listening to and wants to hear is it’s not enough. We are spending more than we can afford to spend and unless we increase revenue or cut programs we are heading down a path that’s going to be a disaster.

Cruz: There is no room for error.

Schaer: There hasn’t been room for error for years. It has exacerbated under Gov. Christie, although there are a few areas where he raised fees and taxes, including most recently the tax on gasoline, overall he’s tried to constrict the budget, but he’s not cut anything.

Cruz: We just had this whole process of the Transportation Trust Fund, that money put into this lock box, and then other money, you have that money so it’s a revenue generator, but it never makes it way into the budget. Meanwhile you’re cutting the sales tax, taking money out of the budget. I am a late person and that doesn’t make mathematical sense.

Schaer: It doesn’t make mathematical sense at all. Part of the problem, and a major part of the problem, is everyone wants their taxes reduced. We are all painfully aware that New Jersey is the most highly taxed state in all 50 states. Our taxes are too high. We all agree that to be the case. Meanwhile, we are a very demanding citizenry in terms of what we want state government to provide to the people, in terms of our behavioral health program, our health programs, any number of areas, college tuition. We give away exorbitant amounts of money. Is it justified? All of those items were crafted by both Republicans and Democrats and agreed upon by both. So they do reflect New Jersey’s priorities. Whether or not the reduction of the sales tax was a good idea or bad idea, or the inheritance tax a good idea or bad idea and the TTF, the Transportation Trust Fund itself, good idea or bad idea, it’s subject to debate. But, there is no question that you cannot continue driving this car at 85 miles an hour with a brick wall in front of you without applying your brakes and we have not applied those brakes.

Cruz: Alright and June 30 is the end of the fiscal year so we’ll see what ends up happening. Gary Schaer, thanks very much.

Schaer: Thank you for being here.