At yesterday’s hearing on the state budget, a nonpartisan legislative budget analyst confirmed what we all knew back when the budget initially was approved: The governor’s economic growth estimates were unrealistic.
Gov. Chris Christie had been depending on revenue growth of 8.4 percent in the current $31.7 billion budget, but actual growth has been less than one percent in the first five months of the fiscal year, David Rosen, the budget officer for the nonpartisan Office of Legislative Services, told the Senate Budget and Appropriations Committee today.
At the current pace of revenue growth, the budget will have a $2 billion revenue shortfall, Rosen said. He cautioned that he was not predicting such a devastating outcome, but did say the shortfall was likely to be higher than the $700 million hole the state currently faces.
“As a result of revenue underperformance to date the state would need a spectacular revenue acceleration to hit the executive’s budget targets,” Rosen said. “Where revenues have grown at .02 percent for the first five months, they would need to grow by 11.9 percent over the remaining seven months.”
Rosen was pressed on the possibility of such a robust rebound, and he replied, “it’s extremely unlikely.”
Republicans called yesterday’s hearing “political” — and it was. The Democrats were looking to undercut a very popular governor at the beginning of his re-election campaign.
But that does not diminish the import of Rosen’s testimony. New Jersey’s economy has not recovered and shows little sign of doing so to a degree that will allow state revenues to rebound and meet the budget estimates. That means we are facing a potentially huge shortfall and the need for more budget cuts. Those cuts will further depress the state economy, tamping down revenue and continuing the cycle.
The governor was elected on a promise to end the budget shenanigans of previous administrations. He has not done so. Nor has the Democratic majority in the Legislature. One-shot revenues and inflated growth estimates continue to the be the order of the day. Until the political class in the state can be honest with itself and with voters, these will remain the facts of New Jersey budgeting to our peril.
Hank Kalet 