Analysis: N.J. budget can’t shake familiar problems

Analysis: N.J. budget can’t shake familiar problems

JULY 5, 2014, 11:49 PM    LAST UPDATED: SATURDAY, JULY 5, 2014, 11:50 PM
BY JOHN REITMEYER
STATE HO– USE BUREAU
THE RECORD

Governor Christie’s latest state budget delays property tax relief, offers more tax breaks to businesses and slashes the state’s pension fund payment. It also highlights the fact that New Jersey is still struggling to overcome long-standing fiscal problems nearly five years into his tenure.

The state’s economy has recovered only half of the jobs lost to the last recession and borrowing has increased each year Christie has been in office, to a record $40 billion.

Property tax bills now average nearly $8,000, but revenue shortfalls have forced Christie to delay relief until next year. Sources of funding for transportation upgrades and open-space preservation have run dry.

And after several years of not making full state payments into the public employee pension fund, Christie is now using the poor health of the pension system to compare New Jersey to bankrupt Detroit.

All three major Wall Street ratings agencies have taken notice of New Jersey’s financial predicament with each one lowering the state’s credit rating and warning that additional downgrades may occur. A poor bond rating can compound the state’s fiscal problems by making it more costly to borrow for things such as new schools and bridges that cannot be funded in one budget year.

The state’s $32.5 billion budget, which Christie signed last week, could be thrown further into disarray if public employee unions are able to persuade a judge to block Christie from providing only a fraction of the state payment that actuaries say the pension system needs.

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