TARGET: Gov. Christie signed a new budget, slashing new taxes and the state’s pension contributions.
By Mark Lagerkvist | New Jersey Watchdog
New Jersey’s budget mess is so bad a judge last week ruled it a “disaster.”
It could be even worse in the new fiscal year that begins Tuesday. At stake is a financial future of New Jersey, struggling under the weight of a $51-billion shortfall in the state retirement system.
Gov. Chris Christie on Monday night signed the $32.5 billion budget. As expected, the Republican governor used his line-item veto power to strike down a tax increase for millionaires plus a 15-percent surcharge on corporate taxes.
“The Legislature appears to be intent on inhibiting economic growth with crushing taxes,” said Christie in his veto statement.
The proposed levies, pushed by Democratic lawmakers, could have enabled New Jersey to make a statutorily required $2.25 billion contribution to state pension funds. Instead, Christie cut the payment down to $681 million to balance the budget, as required by the state constitution.
“The governor has decided to continue protecting the state’s wealthiest at the expense of the middle class and working poor,” countered Senate President Steve Sweeney in a statement.
The next episode of “As New Jersey Turns” is likely to occur in Mercer County Superior Court.
Judge Mary C. Jacobson last week declared the last-minute budget crisis was an emergency under the state’s Disaster Control Act, a statute typically reserved for hurricanes and similar acts of God.
In doing so, the judge allowed Christie to chop $887 million from the state’s legally required pension contribution for the expiring fiscal year.
But Jacobson also refused to close the case, agreeing to scrutinize Christie’s edict for a similar pension reduction in the new budget.
“It’s not just money, it’s the lives of hundreds of thousands of public employees who depend on the pension funds,” she said, deciding the workers have a contractual right to their pensions.
The pension reform championed by Christie in 2011, which he once called his “greatest governmental victory”, is in danger of unraveling at the seams. While workers have made sacrifices under the law, the state has not lived up to its part of the bargain.
The big political question is whether Christie will still be governor when the state’s next big pension bill is due next year, or whether he will cash out of New Jersey to run for the White House.