Christie’s sham comeback

This should sober the New Jersey electorate. Standard & Poor, one of the nation’s major and most influential credit-rating agencies, has slammed Gov. Chris Christie’s budget projections for essentially being built on a foundation of sand.

The credit agency “downgraded the state’s financial outlook to negative from stable,” because “it believed the governor’s revenue projections for the current fiscal year were overly optimistic, warning that the budget was structurally unsound.”
In particular, the agency took note of the administration’s reliance on one-time transfers of money to fill gaps in the state’s $32 billion budget. At the same time, it noted that the state will have to spend more in the coming years to meet pension and Medicaid obligations.
The state retains its AA– rating on general obligation debt and A+ on appropriation debt, “but the lowering of the outlook indicates a likelihood that those ratings will be downgraded in the next two years.”
As the Times reports, the S&P assessment follows a revenue report from the nonpartisan Office of Legislative Services that said the state fell $254 million in revenues, including “a particularly large decline — 9 percent — in corporate tax revenue.” In addition,

Moody’s Investors Service and Fitch Ratings, the two other big ratings agencies, have also recently warned that revenues would lag behind the governor’s expectations, which would require significant revisions to this year’s spending plan because state law requires a balanced budget. Moody’s warned that the revenue shortfalls “leave the state exposed to a midyear structural imbalance.”

The report underscores something that should be clear by now to almost everyone: the governor is far from the new-wave, budget reformer he has painted himself to be. The governor’s claims that he would end the use of budgetary gimmicks like those relied on in the past to balance the state’s budget are no more truthful than his own revenue assumptions. The governor, preparing for his re-election campaign, has been pushing a fiscally questionable tax cut and has refused to raise taxes for those at the top of the income hierarchy. He has withheld payments to the state pension fund, claiming that doing so was part of a reform of the fund and not another gimmick designed to push off obligations into the future.And he has raided an array of funds that had been set aside for other uses.

What the governor has managed to engineer is not the comeback he has been proclaiming, but more of the same — a state-level three-card monte game dressed up in pseudo-libertarian garb.

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Author: hankkalet

Hank Kalet is a poet and freelance journalist. He is the economic needs reporter for NJ Spotlight, teaches journalism at Rutgers University and writing at Middlesex County College and Brookdale Community College. He writes a semi-monthly column for the Progressive Populist. He is a lifelong fan of the New York Mets and New York Knicks, drinks too much coffee and attends as many Bruce Springsteen concerts as his meager finances will allow. He lives in South Brunswick with his wife Annie.

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