After some tough data to end 2012 trickled in each month, Governor Chris Christie began to see slightly but not exactly good news to start 2013. The first half of Fiscal Year 2013 was in a word: underwhelmingly. You could also say disappointing and lacking based on projections and expectations laid out by Christie and his “Jersey Comeback”. Missed revenue numbers and the worse unemployment in decades despite raising poll numbers largely to Hurricane Sandy were not ideal going into an election year for the governor. Nonetheless, as Christie prepared to outline his next budget a few months ago; he remained confident and undeterred.
In February, Christie proposed a $32.9 billion budget that called for an expansion of the Medicaid rolls, historic school aid levels, and a full contribution to the state’s pension program. The budget also called for revenues of $32.8 billion, an increase of 4.9% over the adjusted FY2013 revenues and leaves the state with $300 million surplus. Included in proposed plan is a $1.675 billion pension contribution and more than $8.6 billion in school aid. That $8.6 billion would be a $97 million increase from FY2013’s budget. Adding an expansion of the state’s Medicaid program is expected to cover at least 300,000 uninsured New Jerseyans and shore up $227 million in his proposed budget while making Christie the eight Republican governor to move to align with President Barack Obama as the Affordable Care Act goes into full effect in 2014. Christie had mentioned during 2012 and the presidential campaign wanting to wait until Obama was reelected before he made a decision on this matter. Christie’s decision also bucks the trend of seven other Republican governors.
Not presented in his FY2014 budget was the 10% income tax cut he presented a year ago that quickly lost steam throughout the first half of the year.
The budget almost predictably drew support from the Republicans in the State Legislature and criticism from the Democrats in Trenton.
Senate Minority Leader Tom Kean, Jr. (R-21) would express,
“Regardless of their political stripes, New Jersey residents are looking for a government that lives within its means, enables private sector job creation, provides an excellent education to all children, and is there to lend a hand when disaster strikes. Governor Christie’s budget for the upcoming fiscal year is focused squarely on these priorities and moving New Jersey forward by getting back to the basics of what taxpayers demand from their government: conservative spending, no tax hikes, increased aid to schools, and a groundbreaking trial program to give children in failing schools a choice to seek a better learning environment. Unfortunately, the tone set this year by the Democrat leaders in Trenton is straight out of the dysfunctional Washington, D.C. playbook: fabricating controversy over the Governor’s every decision and searching for wedge issues instead of bipartisan compromise.”
While Assembly Speaker Sheila Oliver (D-34) would voice,
“The Governor’s reckless budget decisions last year have now come back to haunt him and it’s homeowners who will pay the price. His wildly inflated and unrealistic revenue projections for the current fiscal year have not panned out, forcing him to once again delay the delivery of property tax relief. Gov. Christie seems to have forgotten how the budget process works. In order for us to sign off on any tax cut, he must first present us with a sound plan to fund such a proposal. With a nearly $500 million deficit right now, it is dishonest for the Governor to portray it in any other light. Had Democrats allowed the Governor to go through with his plan last year for tax cuts that disproportionately favor the wealthy, we would be in an even more precarious fiscal position right now. It’s clear that the prudence and patience we employed was the right move and we intend to employ a similar approach this year.”
Democratic gubernatorial candidate and state Senator Barbara Buono (D-18) would add,
“Some of the things he said were really offensive. The governor’s claim last year that his fiscal house was in order defies reality. His Fiscal Year 2014 budget plans continue his fiscal failures for the last three years. Right off the top of my head I wouldn’t have pulled out of the ARC tunnel. I would have also signed off on legislation Christie neglected and which would have brought jobs to the state. I also would have signed the minimum wage bill. That’s the way of expanding our revenue base. Christie has turned a blind eye and a deaf ear to the state’s middle class. I think my record speaks for itself.”
The mixed reactions have accompanied Christie budgets and Democrats have been able to get their jabs justifiably at Christie with rough numbers, figures, and results that were falling short of projections. However, Christie began to use early data from the beginning of the year to not only push his budget but his economic successes in the state.
Shortly after his budget address, Christie would exclaim;
“Consider this, for the first two months (of the year) we exceeded our revenue expectations and these are the revenue expectations that everybody in New Jersey said were pie in the sky and could never be met. I believe that over the course of the next four months that we’re going to meet expectations (the remaining period of FY2013). That’s what the press likes to do (referring to anyone who read too much into the first half numbers) and it’s certainly what our opponents like to do. They like to call the game in the third quarter if it goes with their narrative. But the narrative is changing right under our feet. It’s changing as we speak. Now I’m sure that when they prove out to be wrong that I’ll be getting the apologies from all the doom-and-gloomers that I would rightly deserve.”
After February’s numbers came in, it showcased a third month of positive results. However, it still left revenue projections short by 1.3% after eight months into the fiscal year.
February is the third month running that the state has beaten its initial forecasts, leaving revenues just 1.3 percent below estimates for the first eight months of the fiscal year. That all equaled $14.8 billion; just shy of the $15 billion initial projected revenue and again a major reason for Christie’s confidence in early 2013 after a string of negative results.
Along with revenue shortfalls, Christie has had to battle back against a consistently high unemployment rate in the state; a rate higher by more than 1% of the national average. Just as Christie was seeing a slightly better revenue outlook to start the year, unemployment also ticked down from 9.5% to 9.3%. Certainly nothing to brag about and something for Buono to quickly jump on.
“February’s jobs report illustrates the jobs crisis we are facing in New Jersey. At 9.3 percent, more than 430,000 people are unemployed – an unacceptably high number. Compared to last year, more people are out of work and those who have jobs are making less money and working fewer hours. The fact that Governor Christie’s administration calls this ‘another solid month,’ after losing 2,200 jobs in January, just shows how the Governor is out of touch with reality.”
Assembly Minority Leader Jon Bramnick (R-21) would fire back at Buono by stating,
“New Jersey’s economy continues to gain momentum. We are adding private-sector jobs and putting people back to work. Over the last three months, New Jersey’s economic activity is growing at a pace that puts it among the top 10 in the country. Businesses continue to have the confidence to invest in New Jersey because they know there is an opportunity for success. That means job creation and opportunities for people looking for work.”
As the calendar turned to April, Christie and his administration finally saw the type of results they waited nine months to hear: revenue results were matching projections. After nine months, the state reported actual revenues of $16.74 billion. That number exceeded the revised budget figures of $16.72 billion. Also, income tax revenues were $7.40 billion as opposed to the revised budget of $7.32 billion. The monthly unemployment update would add to the good news as the unemployment dropped again going from 9.3% to 9% as the state added more than 8,100 jobs in March.
Naturally, as the state saw a 0.5% decrease over two months; both parties saw the results in two different lights.
As Assemblyman John Wisniewski (D-19) would voice,
“There are still far too many New Jerseyans who desperately want to work and cannot find a job. Even among those who have rejoined the workforce, too many have had to settle for lower wages and struggle to make ends meet. After more than three years in office, Governor Christie still hasn’t proposed any plan to sustain and grow middle-class jobs. New Jersey needs good jobs to grow our economy.”
While Bramnick would response,
“New Jersey’s economy continues to rebound. Businesses are again creating jobs because they have confidence that our state is on the right track. Now is the time for tax relief. The governor’s proposed tax cut for residents will further enhance the state’s economic momentum and create more opportunities for growth.”
Bramnick highlights the 10% income tax plan set forth by Christie last year and put on hold before taking the more positive revenue and income numbers as a signal to relaunch his rallying cry for the across the board cut regardless of income. The plan has been criticized by several Democrats because it doesn’t take into consideration a millionaire’s tax and a fairer way to approach this matter.
Buono would add to Wisniewski’s comments,
“Under Governor Christie’s watch, New Jersey still has 415,00 people unemployed and we have only recovered just over 40 percent of the jobs lost during the Great Recession. New Jerseyans still looking for work need to see real action to promote job growth in the Garden State, not more platitudes and tax cuts for the rich. For more than three years, the Governor’s primary jobs creation plan has been to offer tax breaks and subsidies to corporations – but this is not enough. We must strategically invest in our state’s education and infrastructure to create good paying jobs that are competitive in a global economy. The only way we will escape this economic morass is through new leadership that focuses on boosting our working and middle class. As Governor, my number one goal will be to create a thriving economy that is poised to compete with the rest of the world for years to come.”
Christie would quickly fire back at Buono by uttering,
“What did you expect her to say, congratulations on the fact that the unemployment rate went down from 9.3 percent to 9 percent when that’s all she talks about? The fact of the matter is that New Jersey is making progress and that everyone but Sen. Buono feels it, apparently. That’s fine. She can say whatever she wants to say. It really doesn’t have any impact upon me at all.”
Christie would took aim at Democrats and his strong desire for his income tax plan to be included in this year’s budget. For Christie,
“I’m not going to mince words. If they don’t pass this tax cut, then you know what they were doing all along – they were lying to you. Anybody who votes against this tax cut will hear my voice ringing in their eyes every day until Election Day.”
Christie’s bravado was likely boosted a bit more as for the third straight month, New Jersey saw a decrease in unemployment as the state added 4,100 jobs in April as the unemployment ticked down below 9% to 8.7%. During the latter part of 2012, New Jersey was mired with an unemployment rate of 9.7% and lower than expected income revenue figures before the calendar turned to 2013 and each month began to produce more and more positive results to back up Christie’s words of the “Jersey Comeback” after seeing much fair criticism. Like with previous months of job figures and unemployment, there were partisan reactions as he month closer to the November election stokes heated rhetoric.
The Office of Legislative Services would add to everything being released through April,
“In total, the major tax revenues for the first ten months of FY 2013 are running 6.8% ahead of the same period last year, fueled by the strong April performance of the income tax.”
However, David Rosen from the OLS would present a picture not completely as rosy as perceived. As Rosen would explain,
“Compared to those revised revenue forecasts (previously made), we anticipate $259.4 million less revenue in Fiscal Year 2013 and $441.2 million less in FY 2014, for a two-year gap of $700.6 million. Six weeks ago that gap was $637 million.”
All these developments throughout the first few months of the year would set the table for the budget pressure cooker month of June and a likely heated exchange between Christie and multiple Democrats among the party’s leadership as well as his Democratic challenger.