Christie pledges not to raise taxes to fix budget mess
May 14th, 2014
02:30 PM ET
7 months ago

Christie pledges not to raise taxes to fix budget mess

Updated 2:33 p.m., 5/14/2014

(CNN) - New Jersey Gov. Chris Christie said Wednesday he would not raise taxes as his administration quickly tries to find a solution to the budget's massive $807 million shortfall.

The Republican governor said he'll announce his plan to close the gap next week, but insisted tax increases would not be part of the equation.

Christie's comments came in an on-stage interview with CBS News' Bob Schieffer at the Peter G. Peterson Foundation's 2014 Fiscal Summit in Washington.

Lamenting what he described as a broken tax system in New Jersey, Christie said the top 10 individuals with the most income in New Jersey pay the same amount of taxes as the bottom two million people in the state's tax bracket.

"If those 10 people get up and walk out...if they get up and decide to go and hang with (Gov.) Rick Scott in Florida, I'm losing the equivalent in revenue to what the bottom 2 million filers pay," he said. "That's why I'm not raising taxes."

Drawing an analogy, Christie argued raising taxes would be like raising prices at a struggling restaurant.

"I don't think that's the way you get more people to come to your restaurant," he continued. "And we're in competition with 49 other restaurants."

Economic ups and downs

While Christie acknowledged the economic progress his state has made since he became governor, he also addressed a slew of other fiscal troubles that are dogging his administration back at home.

On the bright side, Christie mentioned, as he often has in the past, that there are 6,000 fewer state employees than four years ago, and the budget has been balanced in each year of his first term, as required by state law.

His office also noted Wednesday in an email blast that Christie also put a 2% cap on property tax increases and helped close a $2.2 billion shortfall that he inherited from the previous administration during his first year in office.

However, not all is well in the Garden State's check book. And Christie is painfully aware.

The unemployment rate is still larger than the national average. Added to that, last month New Jersey's treasury department revealed the $807 million shortfall in the state budget–a lot bigger than the $145 million his administration had projected.

Why was the estimate so off?

Christie placed blame on the Obama administration increasing taxes on the nation's top income earners with the end of the Bush-era tax cuts last year. He said it clearly had an effect on spending habits, and argued New Jersey is not the only state that fell short of its projected tax revenues.

The administration and the state legislature must figure out a solution to balance the $33 billion budget by the end of the fiscal year on June 30.

To make matters worse, New Jersey's credit rating was downgraded again this week, this time by Moody's Investors Service, which cited the budget shortfall as a reason for its updated analysis. The state has now been downgraded by a credit-rating agency six times since Christie became governor.

His state also faces a massive pension debt of $52 billion. Along with the Democratic-controlled legislature, Christie carried out major reforms to the system during his first term–and his administration is set to make a $1.6 billion pension payment this year –but the governor acknowledges that it's still not enough.

Asked if he'll be able to still make that payment given the recent announcement about the budget shortfall, Christie said he'll answer that question when he makes his proposal next week.

The economic woes come as Christie chairs the Republican Governors Association, a group that's actively trying to frame a 2014 message that says states with Republican governors are more fiscally sound.

'Time to dig in'

Christie argued that he inherited the state's current fiscal mess and blamed his predecessors for creating an irresponsible fiscal climate.

"I'm trying in the last five years to fix problems that we've accumulated over the last 20," he said.

"For a decade, New Jersey governors made no pension payments," he added. "My job is not only to pay for what I'm accumulating now, but also to pay back what they never paid."

Christie has addressed his state's financial uncertainty in the past. In a forceful speech last month, Christie told New Jersey lawmakers that they must reform the pension system among other actions to stem an economic disaster.

"It's time to dig in and make a few people unhappy so that the greater good can be achieved," Christie said at an event in Washington.

Democrats were eager to highlight the less-than-rosy situation in which he finds himself back in the Garden State. The Democratic National Committee on Wednesday released a memo that lists a number of the state's problems.

And while the governor frequently touted his bipartisan work with the legislature during his re-election campaign and during his State of the State address earlier this year, not all Democrats agreed with his assessment.

Assemblyman John Wisniewski, a Democrat, in January described relations between New Jersey Democrats and Christie as "very difficult," saying the governor "set lines in the sand" and "said it's my way or the highway."

Wisniewski also co-chairs the committee investigating the George Washington Bridge scandal that has upended Christie's administration.

"Bipartisan means both sides give. That's not how this governor operates," Wisniewski said.


Filed under: Chris Christie • New Jersey
soundoff (38 Responses)
  1. Sniffit

    "The budgets in all Dem states tend to have shortfalls, simply because of all the welfare those states hand out to people who simply refuse to earn their own way in the world.

    You learn that from in the newest Rush Limbaugh coloring book? I hear on page 3 there's instructions on how to crush up an Oxycontin and snort it with a $100 bill without the radio studio's mics picking up the sounds.

    Newsflash: the red states are the ones soaking up all the federal aid money and it's the blue states who occupy the spots where their tax money paid is more than the federal aid they receive. Fact is, the blue states are subsidizing the red states' attempts to live in their ideological alternate reality in which they keep taxes so low they can't afford to do anything for themselves. Red states = mooches. All that federal aid does is enable them to live out the delusion that low taxes and massive budget shortfalls don't matter.

    May 14, 2014 03:46 pm at 3:46 pm |
  2. Bill from GA

    2_indy1600 – ""scraps for the rest of us." Well now, your IRS paid out a full one quarter of it's payments to help out those in poverty fraudulently."

    I did some tax prep about 13 years and the Earned Income Tax Credit was the most obvious fraud you could imagine. Probably still is. The law is stupid the way it considers 'dependents' ( I'm not sure that is how it is worded, but I refer to someone you claim for the credit. "That Nephew is already taken?? Well, try this one!")). Newt Gingrich claimed credit for the EITC as his way of fixing Welfare, though it started in the '70's.

    With the right's war on the IRS, and their cutting of funding, tax fraud, at all levels, will increase. This is not Obama's fault.

    May 14, 2014 03:47 pm at 3:47 pm |
  3. ThinkAgain: Don't like Congress? Get rid of the repub/tea bag majority.

    I accept that most gop/tea bag voters have the memory of a gnat, but surely the rest of us remember GHW Bush nailing gop economic policy:

    Voodoo Economics

    May 14, 2014 03:48 pm at 3:48 pm |
  4. truth hurts but reality bites

    His state also faces a massive pension debt of $52 billion. Along with the Democratic-controlled legislature, Christie carried out major reforms to the system during his first term–and his administration is set to make a $1.6 billion pension payment this year –but the governor acknowledges that it's still not enough.
    --–

    Here is the reason for the credit downgrades. Massive pension debt thanks to the Democrats rewarding their union supporters at the expense of the taxpayers. This is exactly what bankrupted Detroit. The corrupt mix of politics and unions in full cooperation to drain you dry.

    May 14, 2014 03:48 pm at 3:48 pm |
  5. Rudy NYC

    just asking wrote:

    the top 10 individuals with the most income in New Jersey pay the same amount of taxes as the bottom two million people in the state's tax bracket.

    10 people carrying the load of 2,000,000 people!!! and the left will scream they are still not paying their fair share. i guess the goal is for 1 successful person to carry the load of 1,000,000 people each. is that the left's definition of fairness??? total insanity.
    ===================================================================
    They probably aren't, at least not the way you put it. Why should someone making $50,000 per year pay 8-9% of their income to sales taxes? Pay another 10-15% in federal and state income taxes? Pay another 10-20% in property taxes to their local city, county, and state [not all of which are deductible]?

    Add that up. The poor soul is paying between 28% and 44% of their gross income in taxes. A guy like Romney barely pays 15% in a bad year. Is that what you call fair? If 10 individuals "pay most of the taxes" then it is because they "make most of the money", which costs the public to produce and protect.

    Take Walmart, for example. Walmart makes billions every year. Somebody has to pay to build, repair, and maintain the roads that all of their trucks and tractor trailers ride on. Those roads are built with public money, and Walmart has hundreds of trucks, and so they should be paying taxes for the wear and tear those hundreds of trucks cause. Walmart stores benefit from public utilities, and even the public transportation that brings customers to their stores.

    May 14, 2014 03:52 pm at 3:52 pm |
  6. Rudy NYC

    New Jersey Gov. Chris Christie said Wednesday he would not raise taxes as his administration quickly tries to find a solution to the budget's massive $807 million shortfall.
    ------------------------------
    I find it curious that the shortfall number is almost exactly equal to the $800 million in tax cuts that Christie has enacted.

    May 14, 2014 03:54 pm at 3:54 pm |
  7. bobo

    Yea.... I rather pay even more taxes!!! Is that the solution? OR.... are you sick and tired for Government Wasting you taxpayer money you already pay???

    May 14, 2014 03:56 pm at 3:56 pm |
  8. Name JK. SFL. THE GOP HOWDEE GOWDEE SHOW with special guest ISSA the CLOWN

    Thanks Christi , that's WHY we are having a budget DEFICT, AND the GOP knows it. It fits there STARVE the goveent so that they DONT have the money to fund social programs like soc sec , Medicare medicad food stamps VETERNS benifits and a host of others, but we can afford tax cuts for the ONE%. GOP, good luck in 2014 midterms , you will need it!!!!

    May 14, 2014 03:57 pm at 3:57 pm |
  9. ProudDem

    Rick McDaniel

    The budgets in all Dem states tend to have shortfalls, simply because of all the welfare those states hand out to people who simply refuse to earn their own way in the world.
    __________________________________________________
    States receiving the most federal funding per tax dollar paid:

    1. New Mexico: $2.63
    2. West Virginia: $2.57
    3. Mississippi: $2.47
    4. District of Colombia: $2.41
    5. Hawaii: $2.38
    6. Alabama: $2.03
    7. Alaska: $1.93
    8. Montana: $1.92
    9. South Carolina: $1.92
    10. Maine: $1.78

    By my count, 8 of the top 10 are Red

    May 14, 2014 03:58 pm at 3:58 pm |
  10. 2_indy1600

    @Breath and Release...think that's supposed to be "breathe," and I intentionally use ACA most of the time. SEE? No trouble keeping up with the conversation, just the forever moving, liberal lies and spelling. There are limitations on the AP story, so I'll get back to you after repeal. Breath and release....

    May 14, 2014 04:04 pm at 4:04 pm |
  11. Sniffit

    "Christie pledges not to raise taxes to fix budget mess"

    Christie pledges not to fix budget mess.

    FIFY. Same exact meaning, fewer words.

    May 14, 2014 04:06 pm at 4:06 pm |
  12. rs

    Further proof the GOP's "cut-taxes-and-spend" economics is a failure, and that they'll protect the interests of the very rich (in tax cuts) at the expense of the rest of us.

    May 14, 2014 04:09 pm at 4:09 pm |
  13. rs

    "Here is the reason for the credit downgrades. Massive pension debt thanks to the Democrats rewarding their union supporters at the expense of the taxpayers."
    _________________________
    Yeah, its always the little guy that is the real root of the problem for the Right. Look, those states, cities, and counties made those agreements with those employees when they hired them. It isn't the worker's fault, and crashing their retirement or throwing them into poverty isn't the Right's desire to cut taxes when their governmental entities have real expenses.

    May 14, 2014 04:13 pm at 4:13 pm |
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