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.