Tag Archive: transportation trust fund

2016 Budget Recap

After the legislature’s 2016 Budget Bill (S2016) was passed, Gov. Christie changed it both positively and negatively. Positively he increased the Earned Income Tax Credit for the working poor from 20% to 30%, he increased the surplus from $350 million to $700 million and he accepted the legislature’s addition of $66 million for Open Space. He also increased the Opening Balance, a sign of recent savings and expected tax revenue increase, by $240 million over his original budget. Negatively he vetoed the additional sums the legislature sought for state contributions to Pen/Ben. After all the changes he reduced appropriations by $1.6 billion from what the legislature sought, and by $59 million from his original budget. The changes he made are HERE.

Yesterday the Assembly and Senate  passed a Concurrent Resolution which urges the Governor to pay, by July 15, 2015, the State’s budgeted contribution of $1.344 billion for State Fiscal Year 2016 to the State-administered pension systems. Democratic leaders point out that the cost of borrowing the money to make the immediate payment will be far less than the interest earned by having the funds invested early.

The budget overall is austere, a thing of “shreds and patches.” It lacks funds the departments need to keep up with inflation, underfunds the Transportation Trust Fund, and reduces bus services while increasing fares. It reflect’s Christie’s failure to achieve an acceptable level of economic growth.

The EITC increase he will tout in his election campaign as the “humane” Christie helping the working poor. Likewise his failure to increase the contribution to the pension plan he will say shows he is fiscally conservative and not so subtly anti-union. It is not clear yet whether he will make the early payment into the pension plan, but if he genuinely wants to bargain with the unions this payment would be a small token of good faith following his failure to follow the 2011 law.  

“Show me the money”

“We don’t need no education

We don’t need no thought control

All in all you’re just another brick in the wall”
– Pink Floyd

From Gov. Christie we have had enough Republican education and thought control spin. What our state government needs is more revenue.  In the past week he said the Pen/Ben law was excellent, but he does not have the money. He realizes the transportation fund is broke so he scrounges to transfer funds and take on more debt. He says there are other worthy projects, but guess what, we can’t even meet our current obligations. It’s time for him to show us the money.

The basic problems is that our economic recovery is floundering. Until possibly the current year (ending June 30) the governor’s revenue forecasts have exceeded the income received, leading to cut-backs in important expenses. We don’t want more cuts, we want a better economy. He has failed our state grievously – so far “just another brick in the wall.”

Three key economic measures of where we are now:

  • U. S. real gross domestic product (GDP): In the U. S. it grew 2.2 per cent in 2014, but in NJ it grew by only 0.4 per cent ranking our state as 46th in the nation. All our neighboring states did better.

  •  Unemployment: The U.S. rate is 5.4%, but  ours is 6.5% ranking us 44th in the nation. All our neighboring states did better.  
  • Median household income: Since 2010 it has declined 12.2 percent, compared with an average drop of 3.9 percent for the U.S.

    If Christie were head of a large corporation he would be fired. Sure companies sometimes have to cut expenses and they did so during the Great Recession, but to thrive they need to grow their revenue. The U.S. recession is over and corporations are expanding investments to increase return to their shareholders. The New Jersey shareholders deserve no less. (There will be more on how to do this as we approach the budget deadline.)