Chris Christie’s latest budget gimmick

Chris Christie, the Republican governor of New Jersey, is a master at distorting facts and attacking his political opponents. Politicians do this everyday, of course, but Christie is especially confrontational, and his go-for-the-throat approach must leave Democrats in the state legislature feeling bullied and weary.

For all of Christie’s aggression, little real governing happens in his state. New Jersey still has a structurally unbalanced budget. The state still relies on short-term deficit financing and other tricks to get the budget balanced at the end of the fiscal year. Since Christie took office in November 2009, the state’s debt load reversed its downward march and returned to the high levels last seen in 2005 under former Governor Jon Corzine. Christie’s rant in the video above about Democrats’ profligacy betrays his own actions.

Since February, when Christie proposed his budget for fiscal year 2013 (beginning July 1, 2012), he has been very optimistic about the state’s revenues and has been fixated on cutting the state income tax. Moody’s and others warned at the time that the tax cut was imprudent because New Jersey’s budget was based on fanciful assumptions. Here’s what I wrote in February:

I’ll translate the rating agency jargon: The state revenue projections are fantasy. If New Jersey gets lucky and revenues don’t fall short again as they did this year, then the state will end up with a cushion of $300 million to buffer a $32 billion budget. But if economic conditions slow at all (remember, many New Jerseyans work on Wall Street), then take out the midyear budget ax and start chopping. Basically the state is and will be running on fumes.

But Christie’s attack on Buffett obscures all that and shows him as forceful and in charge. In contrast Standard & Poor’s paints Christie as a fiscal illusionist. I just see him as another politician who promises the moon and prays he can juggle the books to cover his promises — or that he can get out of office before payment comes due.

Profligate Republicans and prudent Democrats

If you need more evidence that Republicans are no longer the party of fiscal prudence and that the Democrats are no longer out-of-control spendthrifts, take a look at two recent tax plans from the governors of New Jersey and Maryland. In an overture that primarily benefits the richest residents of New Jersey, Republican Governor Chris Christie has proposed cutting his state’s income taxes by 10 percent across the board, even though his state desperately needs revenue. At the other end of the spectrum, Maryland’s Democratic governor, Martin O’Malley, has proposed fading out deductions and exemptions for the richest taxpayers in his state, effectively raising their tax rates.

Maryland’s credit rating is a sterling AAA. In contrast, New Jersey is rated in the bottom tier of states for credit quality. Christie is further destabilizing New Jersey’s fiscal condition by reducing the amount of revenue without corresponding reductions in expenses. A profligate Republican state and a prudent Democratic one — isn’t it supposed to be the other way around?

In some of the best local political journalism that I’ve seen (watch the fantastic video), New Jersey’s Star-Ledger reported that Governor Christie’s proposed 10 percent income tax reduction has practically no chance of passage. The Star-Ledger editorial page editor, Tom Moran, speculated that Christie’s action was either a legislative bargaining chip or an act of pandering to the national press. Democrat Loretta Weinberg, the New Jersey senate majority leader, pointed out that a millionaire would get about $7,200 in relief under Christie’s plan, while a family earning $50,000 a year would get about $80. Meanwhile, the tax cut would cost the state about $1 billion.

New Jersey’s battering ram

Chris Christie rode to national prominence when he publicly excoriated a New Jersey teacher and other citizens over differences in opinion in town hall meetings. In contrast to the plain vanilla politispeak of most public officials, his blunt, confrontational style of governing was seen as a breath of fresh air. Christie either has a naturally combative governing style or believes that choosing a new target will get the national spotlight back on him. Or maybe he just wants to create a legacy as New Jersey’s most powerful battering ram.

Christie’s latest target is New Jersey state judges. Since no federal law other than IRS statutes has jurisdiction over public pensions, state judges are the chief interpreters of what is owed to public-sector retirees. A New Jersey judge recently overturned a pension reform that Christie spearheaded and that the state legislature passed in the spring. This new law would have required state judges to increase their pension payments from 3 percent of their salary to 12 percent over seven years and make a much bigger contribution to towards their health care costs.

Now, New Jersey’s constitution prohibits the governor or the legislature from reducing the salaries of state judges.  The framers included this provision to insulate the judiciary from the types of political attacks that Christie is making on them.

Christie’s big packaging

Our nation is overdue for an overweight leader. President William Howard Taft, seen at left, was a heavy man who had accomplished a lot when he completed his term in 1913. His successes laid the groundwork for exceptional economic growth for the century. Wikipedia says:

His domestic agenda emphasized trust-busting, civil service reform, strengthening the Interstate Commerce Commission, improving the performance of the postal service, and passage of the Sixteenth Amendment.

The 16th amendment allowed the federal government to assess an income tax without apportioning it among the states or basing it on Census results. The big man had impressive results in his term of office.

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