Chris Christie’s “too big to fails”

May 24, 2011

Chris Christie, the Republican governor of New Jersey who has consistently been championed as a “fiscal conservative,” has a real soft spot for several of his state’s “too big to fail” private projects. These projects include the massive retail/entertainment/sports/dining complex at the Meadowlands and the Revel casino project in Atlantic City. Governor Christie has made his state, which is in perilous financial condition, equity partners in the two projects.

Meanwhile a court order is forcing Governor Christie to increase the state’s contribution to public schools:

The New Jersey Supreme Court ordered the Christie administration on Tuesday to increase state education aid by $500 million in the coming school year, saying it had failed to meet its constitutional obligation to provide adequate educational resources for poor and minority children…

… Stephen M. Sweeney, the Senate president, said that Mr. Christie “was well aware that his draconian cuts to education were illegal,” and noted that during his 2009 campaign, the governor vowed not to cut school aid.

Yes to gambling and shopping and no to education — there is something horribly wrong with this picture.

The Revel casino project is a failed investment of Morgan Stanley that was recently refinanced with Governor Christie’s support. The state is committing $261 million to the project and will own a 20% equity stake. covered the opposition to the investment:

New Jersey Policy Perspective Executive Director Deborah Howlett questioned how Christie could claim the state is broke while promising hundreds of millions in subsidies.

“When we have to take such deep cuts in our investment in educating our children, in police, in sanitation workers, for Pete’s sake, but we’re still finding hundreds of millions to give to corporations, there’s an imbalance there,” said Howlett, a former spokeswoman for Gov. Jon Corzine, who lost to Christie in 2009.

Whether public entities should subsidize private, for-profit entities with the “hope” of future tax revenues is an important question. Is the public entity getting full participation in the profit of the enterprise, or is it merely “dumb money” that tides over the private entity until it can be pushed out?

The New York Times wrote about the Meadowlands project (formerly called Xanadu):

Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said the kind of state financing in the Xanadu agreement only helped enrich the developer at the expense of taxpayers.

“At a time when the governor has taken money from renewable energy and schools, he’s bailing out an ugly mall,” Mr. Tittel said.

Brigid Harrison, a professor of political science at Montclair State University, said, “The idea that Xanadu, which has such a reputation for being a boondoggle, is worthy of state investment — it’s antithetical to what Christie says the role of government is.” But Dr. Harrison said that the governor had no good options, and that voters would approve of his actions if construction resumed, the exterior became more attractive, jobs were created and the mall opened.

Critics have long predicted that Xanadu would harm every other retail center in North Jersey, or that it would never generate enough business to succeed.

States and municipalities will be strong and successful when they act prudently and focus on their core responsibilities. For New Jersey, it’s very hard to argue that betting on future returns from their “too big to fails” is fiscally conservative.


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what a mind boggling fiasco. Xanadu more like Hell, was built on an environmentally protected wetlands. Only in New Jersey. It should be razed and buried, like the Fat F**k who is the governor

Posted by matto | Report as abusive

Why is the word “corruption” not mentioned once in this?

Posted by GA_Chris | Report as abusive

Cristie won an election because he was not Jon Corzine. He has ‘balanced’ his budgets by not making required payments into an underfunded pension system and then uses state funds in infusions to private ventures in two saturated markets, retail space and casino hotels. Somehow a man who would not be able to win his own state is considered a contender in Presidential politics. Un freaking believable.

Posted by johnjcpa | Report as abusive

Christie joins the list of current Republican governors, Kasich of Ohio, Snyder of Michigan, Scott of Florida who now have disapproval numbers greater than their approval numbers and in many cases would lose by significant margins in “do-over” elections.

Posted by bpotter110 | Report as abusive

“Yes to gambling and shopping and no to education — there is something horribly wrong with this picture.”

At the end of the day, it always comes down to … “show me the money!”

Posted by Mangojulie | Report as abusive

@johjcpa. Sometimes you’re the paddle and sometimes you’re the ping pong ball. I guess the national GOP saw Cristie as the paddle, whereas NJites saw Corzine as the ping pong ball and smashed him out of there. “Couldn’t possibly be worse than Corzine” is a pretty low standard for Presidential contender. LOL!

Posted by Mangojulie | Report as abusive

Sad when voters resort to a lesser of two evils.

Posted by seattlesh | Report as abusive

This demonstrates once again that voters need to do thier homework before voting.. and that there are consequences when they do not..

Posted by maitai | Report as abusive