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A Battered Christie To Unveil New Jersey Budget Proposal

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FILE New Jersey Gov. Chris Christie. (credit: Jeff Zelevansky/Getty Images)

FILE New Jersey Gov. Chris Christie. (credit: Jeff Zelevansky/Getty Images)

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TRENTON, N.J. (AP) — As Governor Chris Christie prepares to announce his budget plan for the next fiscal year, the New Jersey forecast calls for a rise in tax revenues but also state financial obligations. And there’s still the chance of a shortfall between now and the end of June.

Christie will announce his plan Tuesday for the fiscal year starting July 1, also the deadline for the Democrat-controlled Legislature to approve a plan.

With his administration recently besieged by scandal, the governor has not said much about any potential new wrinkles for budget-making outside of a few remarks at his State of the State speech last month when he touched on the debt, pension obligations and tax policy.

The current-year budget is about $33 billion. The next-year budget most likely will be higher. By law, it must be balanced.

The annual deliberations on the state’s spending-and-revenue plan come at a time when Democratic lawmakers have said they are less likely to go along with the Republican governor on some issues.

Christie claimed a mandate from voters when he easily won re-election in November. But his standing could be weakened by investigations into massive traffic jams near the George Washington Bridge apparently created by Christie aides as political retribution and from accusations that cabinet members used the prospect of local storm relief to pressure a mayor to support a real estate deal.

The normally gregarious Christie has not taken questions from the media, except for one radio interview, since a news conference Jan. 9 to address the traffic scandal. He hosted a town-hall meeting for residents last week.

David Rousseau, who served as state treasurer under Gov. Jon Corzine and now analyzes budget and taxes for New Jersey Policy Perspective, said he expects state revenues in the next fiscal year to be up by $1.5 billion to $2 billion over the current fiscal year.

But a chunk of that — up to $1 billion — is already accounted for between rising debt-service obligations and pension fund payments. Christie suggested in his January speech that those rising costs could also hamper other plans.

“That’s nearly $1 billion we can’t spend on education, that we can’t invest in infrastructure improvement, that we can’t use to put more cops on the street, that won’t be available to improve access to health care,” the governor said.

Democratic lawmakers took that to mean Christie was suggesting not making the full payments, and they went into defense mode. Assembly Majority Leader Lou Greenwald said it would be a “breach of the public trust” for the state not to fully honor its 2011 deal to increase pension system payments as public workers also were required to contribute more.

Greenwald said that the state has to consider changes to its tax system and that he would lay out options as lawmakers take up budget issues.

Since Christie came to office four years ago, he has been in a tug-of-war with lawmakers over taxes. For the first three years, legislators passed and he vetoed bills to raise taxes on the state’s highest earners.

In 2012, he called for across-the-board income tax cuts, which would have helped New Jersey’s higher earners the most. He eventually agreed to a plan to cut income taxes based on the taxpayer’s property tax bill. New Jersey has the highest property taxes in the nation and lawmakers liked the plan, but said the state could not afford to cut a revenue source.

Christie has not said whether his tax relief ideas would follow either of those earlier models, or something else.

Staring everyone in the face before getting to the next fiscal year is the question of how the state can balance the current year’s budget between now and the end of June.

Last month, the state Treasurer’s Office said revenue collections through December were $332 million below the budgeted amounts. On Friday, the Office of Legislative Services — a frequent foil for Christie, but one that has often produced accurate projections — said the shortfall could now exceed $400 million.

Rousseau, the former state treasurer, said the Christie administration apparently was too optimistic with its projections for how quickly the state’s economy would improve. He said that leaves the state budget-planners now in a tough spot, deciding whether to hope collections pick up or to make some cuts now that could turn out not to be needed.

“If you underestimate it and it comes May, you only had a month and a half” to balance the budget, he said. And by then, he said, relatively easy ways to do it may not be available.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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