N.J. structural deficit at $10.2B, nearly same as when Christie took office
TRENTON — New Jersey is more than $10 billion short on what it would cost to fully fund schools, pensions, transportation projects, Medicaid and other programs, according to an estimate prepared by the state's nonpartisan Office of Legislative Services and obtained by NJ Advance Media.
The newly estimated structural deficit, first reported by NJ Spotlight. has risen to $10.2 billion for the next fiscal year. That's nearly $3 billion higher than OLS's estimate heading into the current fiscal year. And it's $500 million shy of the $10.7 billion that stood when Gov. Chris Christie took office in 2010. The governor bragged as recently as last month that he wiped out an $11 billion deficit in his first year.
"The fact is Gov. Christie ended autopilot Trenton spending when he took office and has cut discretionary spending ever since," Christie spokesman Kevin Roberts said.
The OLS says the deficit represents what's been promised in laws passed by past governors and legislatures based on a series of funding formulas showing how much the state should spend on everything ranging from pensions to school funding to property tax rebates.
Christie has objected to using this as a yardstick, saying it's not a real deficit and that governors should have discretion in what goes into a budget. OLS calls the figure "theoretical," and one on which "reasonable people can disagree."
Here are five more things to know about the state's structural deficit:
1. Rising pension costs are responsible for a quarter of the total structural deficit, or $2.6 billion, and
that is $330 million higher than last year.
2. Fully funding Homestead property tax credits would cost another $2.17 billion and fully funding schools would require another $1.6 billion. The state would need $1.6 billion to maintain funding for transportation capital projects and more than $1 billion to fund Business Employment Incentive Program (or BEIP) grants. Municipal aid adds $960 million; Medicaid and charity care, $470 million; health benefits, $200 million; Senior Freeze, $50 million. Replacing one-time revenues adds another $620 million.
3. The total spending increase necessary to fully fund that slate of programs is $11.3 billion, but it is offset by $1.1 billion in estimated revenue growth, according to OLS.
4. Prior to taking office, then-gubernatorial candidate Christie slammed Gov. Jon Corzine's $8 billion structural deficit, and called on the governor to drop his re-election bid in "shame." When Christie took office in 2010, the structural deficit was estimated to be $10.7 billion.
5. After he signed his first budget, Christie bragged that he'd wiped out an inherited $11 billion deficit. But when figures showed the structural deficit had barely budged. Christie called the figure "fake." And in his 2011 budget speech, he declared an end to that way of budgeting, saying his administration should not be held to the programming decisions of governors past. As recently as his June presidential campaign kickoff, Christie took credit for eliminating the deficit in his first year in office.
Samantha Marcus may be reached at email@example.com . Follow her on Twitter @samanthamarcus . Find NJ.com Politics on Facebook.Source: www.nj.com