Tag Archive: Charles Steindel

Governor Christie: Do Yourself a Favor

Governor Christie’s economic/jobs policies have resulted in NJ now having the 47th highest unemployment rate, a decrease in last year’s GDP of half a percent, a disastrous home forecloure rate, numerous warnings and downgrades from rating agencies, a precipitous decline in public sector jobs, and very slow gain in private sector jobs. His policies have failed. This is all the more serious when one considers the steep increases required next year in pension costs, transportation borrowing, already-approved business tax cuts, and the more than $1 billion in one-shot revenues built into the Fiscal Year 2013 budget.

The mantra of “cut, cut, cut” has not worked. Only a stronger NJ economy with more people employed will provide the state the revenues it needs to meet upcoming obligations. So far this year the revenue increase has been so low as to require an impossibly high 10% increase each upcoming month to meet Christie’s unrealistic projection – one on which expenditures are based. As a result it is possible that midyear cuts may be necessary.

Christie, who presumably has survival instincts, could do himself a favor and actually stimulate our economy. Imposing a small gas tax increase would increase funds for highway construction jobs. Spending down quickly the $300 million federal grant for homeowners in distress would help. Any successful jobs-related effort he makes will reduce “safety net” expenditures of our treasury. Almost all other governors are performing better. Why don’t you?

Fortunately in September our unemployment dropped from 9.9% to 9.8% but unfortunately there was a loss of 1,200 jobs (a gain of 1,100 in the private sector and a loss of 2,300 in the public sector.)  The Treasury Department’s Chief Economist Charles Steindel, always putting lipstick on the pig, thinks there “might be a sign that the situation is getting better.” I hope he is right, but there was further news in September that average hourly earnings were lower by $0.21 and weekly earnings fell by $6.65. In effect, another disappointing month.

The September NJ unemployment rate of 9.8% was a full 2% above the U.S. rate of 7.8%. Only 3 states have a higher rate. The rates for states in our region were Connecticut: 8.9%, Delaware: 6.8%, New York: 8.9%, and Pennsylvania: 8.2%. Our rate continues higher than when Christie took office and has consistently been 9% or over since then.

The monthly job gain or loss is based on seasonally adjusted non-farm worker  employment which in September decreased from 3,906,600 to 3,905,400. The loss over recent years in jobs has been such that one has to go back to 2008 when we averaged more jobs – 4,050,900. During the last twelve months, a period during which Governor Christie trumpeted the Jersey Comeback, there has been only a small job gain of 44,000 or 1%. To get back to where we were in 2008 requires 145,500 new jobs added.  

More “Blowback” – No “Comeback”

On Wednesday State Treasurer Andrew Sidamon-Eristoff will present a Budget Revenue update to the  Assembly Budget Committee. As we receive further economic news for May, it just gets worse. Governor Christie’s “Jersey Comeback” looks increasingly like “Christie’s Blowback.”

The Star Ledger Editorial Board, NJ Public Policy President Gordon MacInnes and others agree this is not the time to saddle the State with the cost of an income tax reduction or property tax relief program. Neither of these competing plans are “free.” Their costs are added into a budget based on a tax revenue forecast which is collapsing amid problems in unemployment, foreclosures, higher cost of borrowing, and slow economic growth. Both Governor Christie and Senate President Sweeney this week appeared resolute in pursuing such a program. Their reasons seem to be for personal political gain as current forecasts do not justify their approach. Instead, we should spend what funds we can realistically anticipate on the basics, such as health, education, social safety net, and pensions.

Some updated/additional facts:

  • 1 in every 1,842 NJ housing units received a foreclosure filing in April 2012, (RealtyTrak) and NJ’s percentage of home mortgage loans in foreclosure continues to rise, as rates nationally have fallen. NJ now has the second-highest percentage of mortgage loans in foreclosure – at 8.4% – behind only Florida at 14.3%. (NJ Real Estate Report)
  • Unemployment in April rose to 9.1%, as opposed to the national average of 8.1%, and NJ was only one of five states to have an increase in unemployment in April. (U. S. Bureau of Labor Statistics)

  • The state’s seasonally adjusted job count fell by 8,600 in March. In the private sector, the loss totaled 11,600. (Treasury Department Chief Economist Charles Steindel) However, the number of new jobs added in April was insufficient to reverse the March loss. (NJ Department of Labor)

  • Our Indexes of Economic Indicators for March show economic activity grew at a robust pace in New York State, a healthy clip in New York City but a diminished pace in New Jersey. (N.Y. Federal Reserve Bank)

  • Our May general economic index, falling to a minus 5.8%, signals contraction in the area covering southern New Jersey. (Philadelphia Federal Reserve Bank)

  • Fitch in August lowered NJ’s credit rating on general obligation bonds to AA-, its fourth step. The downgrade duplicated actions by Standard & Poor’s in February and Moody’s Investors Service in April. (New Jersey Newsroom)

  • Tax revenues through April are $230 million below the forecast for the first ten months of the current fiscal year. (State Department of Treasury)

  • Christie administration is now facing at least a $121 million shortfall in energy tax collections atop the $230 million shortfall revealed on Tuesday. (Assembly Budget Chair Vincent Prieto)

  • Christie administration and the nonpartisan Office of Legislative Services are now about $850 million apart on revenue projections through fiscal 2013. (estimate of Senate Budget Chair Paul Sarlo)

    My guess is that on Wednesday the Treasurer will lower the tax revenue forecast somewhat, but leave open the possibility for a tax program to be negotiated.

  • Christie’s “Jersey Comeback” Becomes “Christie’s Blowback”

    “On the road again

    Goin’ places that I’ve never been

    Seein’ things that I may never see again

    And I can’t wait to get on the road again”

           – Willie Nelson

    While Governor Christie has been “on the road again,” and again, and again, what he hailed as the “Jersey Comeback'” is now the “Christie Blowback” – instead of propelling himself and us forward we are traveling in the opposite direction.

    Some facts:

  • 1 in every 1,842 NJ housing units received a foreclosure filing in April 2012. (RealtyTrak)
  • Unemployment is at 9%. (U. S. Bureau of Labor Statistics)
  • Net property taxes are 20 percent higher under Christie than they were when Democrat Jon Corzine left office two years ago. (NJ Spotlight)

  • Tax revenues through April are $230 million below the forecast for the first ten months of the current fiscal year. (State Department of Treasury)

  • Christie administration is now facing at least a $121 million shortfall in energy tax collections atop the $230 million shortfall revealed on Tuesday. (Assembly Budget Chair Vincent Prieto)

  • Christie administration and the nonpartisan Office of Legislative Services are now about $850 million apart on revenue projections through fiscal 2013. (estimate of Senate Budget Chair Paul Sarlo)

  • The state’s seasonally adjusted job count fell by 8,600 in March. In the private sector, the loss totaled 11,600. (Treasury Department Chief Economist Charles Steindel)

  • Our Indexes of Coincident Economic Indicators (CEI) for March show economic activity grew at a robust pace in New York State, a healthy clip in New York City but a diminished pace in New Jersey. (Federal Reserve Bank)

    Please Governor, less road action and more home action. What we all need is a comeback not a blowback.  

  • Economics Christie Style

    Dr. Charles Steindel, the State’s Chief Economist, titled his March report: “A Strong Start for the Year Gives Reason for Hope” He went on to point out, “The job numbers for January and February show the upward momentum that became evident in 2011 continues. A total of 17,500 jobs were created in New Jersey over the two months.”

    Well Dr. Steindel, the State’s Labor Department just reported the data for March: there was a Total Private Job Loss of 11,600 and Government Job gain of  3,000. The net result was that 8,600 jobs were lost in March, substantially reducing the gains of January and February and reducing your “reason for hope.” Optimism is nice, but I guess it’s not for nothing that economics is sometimes called “a dismal science.”

    Dr. Steindel in his March report went on to say, “The jobless rate was 9 percent in both January and February. Continued job growth at the recent pace will bring unemployment down.” It’s a good thing he did not predict when unemployment will go down because it remains at 9%.  

    Following the more sobering March news Dr.Steindel has now issued a pollyannaish and vague prediction, “The majority of indicators suggest that New Jersey employment growth will continue over the long term, creating a stronger economy for everyone.” That’s nice to hear, but I wonder how long is “the long term,” and I see no sign that the Christie administration is truly concerned about “everyone.”

    I guess we are witnessing economics Christie style.