We know our budget will have to be revised downward in the coming weeks and the process will be painful. Therefore, the Senate Budget Committee met yesterday to begin a dialogue. According to David Rosen, Budget Officer for the respected Office of Legislative Services (OLS), after only five months our revenue is already in the hole by over $700 million and may exceed $2 billion by the end of the year. That’s a big hole in a $32 billion budget which by law must be balanced.
Revising the budget is a task shared by the legislature and the governor. One would expect that when the Budget Committee invited the State Treasurer to testify and join in the discussion, he would do so, but he demurred claiming a scheduling conflict. OLS receives a lot of raw financial data from the Treasury and is able to create a good picture of our state finances. But OLS does not get all the data, so the Treasurer is the most informed about our current status and prospects for the coming months.
Enter politics. The Governor and all legislators are up for re-election this year, and making budget cuts does not increase their popularity. Give credit to the Democratic legislators for initiating a budget hearing and inviting the State Treasurer. However, so far, Governor Christie is playing the matter close to his vest and his Treasurer is revealing nothing.
It is time for Christie to join the discussion. He typically wants to dominate the dialogue, but in this case he is in a weaker position as he recklessly promoted an absurdly high budget and spent much of last year talking about a non-existent “Jersey Comeback.” His mantra remains to shrink government, but history shows that he does so on the backs of the middle class and those in poverty. He sees no need to create a tax surcharge for the wealthiest New Jerseyans. He might even argue that most of the shortfall will disappear in the coming months because of Sandy relief monies and changes in Washington tax policies.
David Rosen, however in the hearing said, he feared help would not come swiftly or be big enough. “While we anticipate that these two factors will have a positive impact on revenues, they are unlikely to fully overcome the broader revenue issues we face this year.” At best the complete federal Sandy Aid package is unlikely to be signed until the end of the month, and the recalcitrant House conservatives may reduce the amount. Even then the spigot will not flow strong as the government is typically slow and methodical and is paying out monies stingily until the debt limt crisis is resolved.
It is time for Governor Christie to engage. Post Sandy he may view himself as stronger and grander on the Jersey (and national) stage, but right now he is a guy with a huge budget hole based on his unrealistic projection and with a failed economic comeback plan that he loudly promoted. A little humility and more cooperation with the legislature would do him good. And all of us need to assure that what he proposes is fair to all new Jerseyans, not just his chosen few.