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.
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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.
last month New Jersey's treasury department revealed an $807 million shortfall in the state budget–a lot bigger than the $145 million his administration had projected.
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And Jersey's credit has been downgraded again. This is not the guy you need in the Oval office making policy. However he can cook the books at Club Fed.
"However, not all is well in the Garden State's check book. And Christie is painfully aware."
I don't know, CNN. It might be best to drop the "Christie is aware" (painfully or otherwise). By his own admission, he leans heavily on those in his inner circle to "tell" him what he does or doesn't know.
Lately, he's hasn't exactly emitted an awareness of much of anything that goes on in his state. Which might be why NJ isn't in "economic recovering mode" and hasn't been since his first term?
I think we can all safely kiss his second term good-bye.
The larger story here is that three GOP governors have now tried the GOP recipe for massive tax cuts to stimulate the economy. New Jersey, North Carolina and Kansas. They did exactly what the GOP has been saying for decades is the right way to turn the economy around. Guess what? It's been a disaster in all three. Huge budget shortfalls, credit downgrades, the works. Time to wake up.
Since he's not aware of much that goes on around him, are we really sure he even knows his state has a deficit?? I mean you can't blame the dude he's so busy having surgeries instead of simply eating less and trying to campaign for POTUS, maybe he doesn't know.
This guy can't run a state how in Gods name could be run a country??? And they think he would be better than President Obama. He doesn't have half the intelligence that President Obama has. And none of the charisma and swag.
FIFY
What ever happened about the hurricane Sandy funds in Hoboken $$$$$$$$$$$$$$$$$$$$$$$
Was somebody paid off ?
'Late last month, 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. "
Wrong. The only people whose spending habits have not and did not change all throughout the recession were the wealthy. In fact, their spending and economic activity went up. CNN even had a short segment on it a while ago, showing how high-end goods, like luxury vehicles and expensive designer clothes and perfumes and jewelry, were still selling like hotcakes while the rest of the economy floundered. The numbers don't lie. It's just more evidence that the entire "free market" fantasy and the plutocratic trickle-UP policies of the GOP/conservatives have indeed created two different Amurikas because it shows that there are, essentially, two distinct economies at play here: one for the wealthy, and the scraps for the rest of us. Mission Accomplished.
But Democrats are quick to point to the bleak reality facing New Jersey's own economy, one that's saddled with major pension debt and a massive budget shortfall.
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New Jersey's looming financial difficulties are a textbook example of what happens when you put Republicans in charge.
Why is there a pension debt problem? Because the state hasn't been paying into the pension fund on a timely basis. It's anyone's guess as to what the exact reasons for it, but my guess that it has something to do with large tax cuts that the governor enacted for the wealthy and big businesses.
Why is there a looming, massive budget shortfall? It's not because the state spends too much, rather the state spends money that it no longer has. New Jersey isn't spending too much on education, because Christie slashed that budget. New Jersey isn't spending too much on public sector employees, because Christie brought the conservative axe to those budgets as well. Christie even got union busting legislation signed into law, so we cannot blame the unions, either. My guess is that there is massive budget shortfall because Christie's tax cuts have not increased revenue as promised.
When you put Republicans in charge, this is what happens each and every time. All of a sudden the government is going bankrupt and suffering from massive debt, and people are losing their homes and their jobs everywhere you look..
Let him worry about the crime of lane closure, also bring NC guy for polluting rivers.
Gurgyl
Let him worry about the crime of lane closure, also bring NC guy for polluting rivers.
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YEAH!!!! And I bet he's guilty of removing that "do not remove" label on his mattress too!!!!!
"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. That's between 13.5 and 15 Billion with a B for those of us counting the scraps where they count. Time to deunionize the IRS, or maybe have them report to Congress? Nah, just keep these thieves in power with no oversight, especially now that they're handling your healthcare. Never a bad time to talk about fiscal problems when things are so corrupt, or "venal" as Borger puts it.
Some how he has managed to pull the wool over the eyes of most of the voters in NJ.New Jerseys financial state of affairs is not good, we have one of the highest unemployment rates in the country and people are leaving the state. He is not a leader just a bloated bully
"Well now, your IRS paid out a full one quarter of it's payments to help out those in poverty fraudulently. That's between 13.5 and 15 Billion with a B for those of us counting the scraps where they count. Time to deunionize the IRS, or maybe have them report to Congress? Nah, just keep these thieves in power with no oversight, especially now that they're handling your healthcare. Never a bad time to talk about fiscal problems when things are so corrupt, or "venal" as Borger puts it.
You, sir, don't understand how any of the gov't works and you just made it abundantly clear.
"You, sir, don't understand how any of the gov't works and you just made it abundantly clear."
That's entirely possible, because I pay taxes and don't take money from the government, so the payments made to help people in poverty don't apply to me personally. Why do you think fraudulent payouts are not related to taxpayers? The IRS doesn't report to congress and is unionized, making it impossible to hold people accountable. Did you read the AP report?
OMG! Obama is the blame for NJ's budget short fall! That's rich! NJ's fiscal problems pre-date Obama, and BTW Gov. Crispie Crème...the spending habits of the wealthy did not fall due to the increased taxes placed upon them, but instead, rose despite the tax increase! Now, find another excuse for your failure as a governor!
More than likely, it's earned income tax credits (refunds) I don't understand. Never got a refund myself. Why is this such a sacred cow? Entire tax code should be rewritten, but the ACA passed someone's smell test without even being written. How? I didn't qualify for EITC's but lots of people did. Had the PCIP plan for two years, and couldn't afford the ACA after all is said and done. I'll get back to you after the audit.
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.
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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.
If he can't see both sides of the ledger, then he is a fool and an ideologue. Taxes need to be raised and some spending to be cut. You can't cut your way out of this.
So what you want from big spending liberal policies year after year after year? Christi ain't your problem. I suggest you Google POGO to see who real enemy is. You want free lunch. You want Champagne with Kool Aid Pocket Book. Once again! THINK NOT WHAT YOUR COUNTRY CAN DO FOR YOU, BUT WHAT YOU CAN DO FOR YOUR COUNTRY!!
@2_indy1600
"scraps for the rest of us."
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Having a hard time following the conversation here? Even taking into consideration that your statements are wrong, what does the IRS, Welfare, and the ACA (ObamaCare to you) have to do with NJ's budget shortfall. Please try to keep up.
Teatroll Rosetta Stone says: "I hereby pledge not to undo the very thing that I did to cause this mess."
The GOP/Teatrolls' "Starve the Beast" Budget Cycle:
1. Hand out massive tax cuts to the wealthy and large corporations;
2. Act shocked that there's a budgetary shortfall;
3. Blame programs for the poor, elderly, disabled, or things like public education, etc., for the shortfall;
4. Swear not to raise taxes to fix it;
5. Cut programs for the poor, elderly, disabled, children, education, etc., in order to "balance" the budget;
6. Cut taxes again because "hey guys, the budget's balanced now, so we can cut taxes!!!"
7. Rinse and repeat.
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.
"three GOP governors have now tried the GOP recipe for massive tax cuts to stimulate the economy. New Jersey, North Carolina and Kansas. They did exactly what the GOP has been saying for decades is the right way to turn the economy around. Guess what? It's been a disaster in all three. Huge budget shortfalls, credit downgrades, the works."
GOP/Teatrolls would tell you it's been a huge success and that it's working as intended. Those results are features, not bugs.
"I don't know, CNN. It might be best to drop the "Christie is aware" (painfully or otherwise). By his own admission, he leans heavily on those in his inner circle to "tell" him what he does or doesn't know.
Lately, he's hasn't exactly emitted an awareness of much of anything that goes on in his state. Which might be why NJ isn't in "economic recovering mode" and hasn't been since his first term?"
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Change "Christie" to "Obama" and this post is identical to our current POTUS and this administration at the Federal level. When were you informed of this Mr. President? Oh I actually heard that in the news.
@Sniffit
The GOP/Teatrolls' "Starve the Beast" Budget Cycle:
1. Hand out massive tax cuts to the wealthy and large corporations;
2. Act shocked that there's a budgetary shortfall;
3. Blame programs for the poor, elderly, disabled, or things like public education, etc., for the shortfall;
4. Swear not to raise taxes to fix it;
5. Cut programs for the poor, elderly, disabled, children, education, etc., in order to "balance" the budget;
6. Cut taxes again because "hey guys, the budget's balanced now, so we can cut taxes!!!"
7. Rinse and repeat.
I would add 2.a. Act shocked when all the jobs promised to result from said tax cuts for the wealthy and large corporations don't materialize.
I've said for a long time that repub/tea bag economic policy is all about eliminating the American middle class. They are all in hot pursuit of flipping our economy with China's, as we become the slave-wage laborers to China's growing middle class, with unregulated environmental degradation and natural resource exploitation for all, Amen.