NJ Budget Begins to Take Shape: Sacrificing Education, Environment and Energy for Pensions, Health and Debt

First there are the excerpts (a tease), then there is the Budget Address (a lot of spin and omissions), next the actual Budget, and then discussion, advocacy, lobbying, hearings, negotiations and, ultimately, legislative action on or before June 30. A budget's true measure is at the end of its season, and New Jersey's current budget has suffered from revenue over-optimism and insufficient funding in important areas.

At this moment, we are in the earliest season — excerpts were released last night. However, it is in the budget where all is laid bare. And the devil is in the details. The 2015 Fiscal Budget Address is scheduled for today at 2:00 pm (EST) in the Assembly chambers. The budget should be released shortly thereafter on the Treasury website.

In last night's excerpts we learned that Gov. Christie will say today:

  • "The budget proposes making the largest pension payment ever at $2.25 billion." The payment was set to increase to $2.4 billion in the 2015 fiscal year. It appears Christie proposes to pay somewhat less. We will soon find out why. Perhaps, he is planning to delay a part of the payment until the next fiscal year as he did with the Homestead Rebate or he has somehow recalculated what is due.
  • "We are cleaning up [the pension] mess. But this simply isn't enough. Without additional reforms, NJ taxpayers still owe $52 billion to fully fund the pension system." The problem is serious, but actually we don't have to fully fund the Plan. Ultimately reaching 85 percent would be acceptable. We will soon enough learn what "reforms" he seeks.
  • "We just can't raise taxes..." An increase in the gas or millionaire surcharge tax does not appear to be in the offing, although the Legislature should seek one or both. Expect, however, user fee taxes and a variety of government services to be more expensive.
  • "... we are sacrificing university research, support for K-12 education, funding for the environment and energy and infrastructure of all kinds on the altar of these three things: pensions, health, and debt."  He has done little to increase university research. His first year, Christie made a massive cut in K-12 education funding. Neither protecting the environment nor funding solar nor wind have ever been priorities. He has way underfunded infrastructure, getting monies from such sources as the Port Authority, Parkway, and borrowing.

There is much more to be learned: the one-shot gimmicks, the "smoke and mirrors," cuts in the safety net, moving some expenditures to the next budget, addressing the revenue shortfall, low surplus, and over-estimated internet gambling revenues, and much more. The season for New Jersey's new budget is still in its infancy. Stay tuned.

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