The $34.4 billion state budget New Jersey Gov. Chris Christie proposed Tuesday makes a required $2.25 billion payment to the public worker pension fund without raising taxes but leaves virtually nothing left over to fund major new programs or initiatives.
Christie's restrained spending plan for the fiscal year that starts July 1 offers slight increases in K-12 and municipal aid, and increases higher education funding by $159 million, or about 8 percent. The budget also includes $5 million to allow some districts implement longer school hours.
All but 6 percent of the expected growth in revenue, however, will be consumed by ballooning retiree and debt obligations.
"While this budget continues the fiscal discipline and pro-growth policies that we brought to Trenton four years ago, the budget doesn't do everything we all might have wanted," Christie said. "Not even close."
For example, it does not include plans for a tax cut, a Christie proposal of two years ago that was thwarted by Democrats. And, it all but abandons earlier administration efforts to privatize certain services. It does, however, maintain property tax rebates at current levels for those who are elderly, disabled or earn less than $75,000 a year.
Christie is linking rising retiree costs to the state's inability to adequately other priorities such as education, tax relief and drug rehabilitation. In his state of the state speech in January, Christie proposed a longer school day and longer school year, but did not say how he intends to fund it.
"We just can't raise taxes enough to pay for the exploding costs of public employee pensions and benefits, not to mention the burden it would place on our already overburdened taxpayers," Christie said.
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"Without additional reforms, New Jersey taxpayers still owe $52 billion to fully fund the pension system," he said.
Christie, 51, said changes adopted during his first term didn't go far enough. He did not propose any specific new initiatives.
Christie helped cement his national reputation by taking on public employee unions. Changes enacted during his first term require public employees to pay more for benefits, postponed cost-of-living increases for retirees and forced the state to start paying into the fund after years of skipping payments. The powerful teachers union spent millions in ads in an unsuccessful attempt to defeat the proposals.
Christie plans on making a record $2.25 billion contribution to the fund in the budget year that begins July 1, which is the amount required by law but just over half of what the state actually owes.
Some 78 percent of that goes toward the state's unfunded liability, accumulated by years of the state skipping its payment and the Legislature agreeing to enhance retirement benefits without having the means to fund the change.
Pension, health care and debt obligations suck up 94 percent of new spending, Christie said.
The current budget is another source of potential shortfall, as revenues are lagging projections by about $250 million seven months into the fiscal year.
The budget speech comes as the Republican's administration is mired in scandals that have hobbled the start of his second term and threaten his future political plans.
Allegations that Christie aides threatened to withhold storm relief funds from a severely flooded town unless its mayor approved a favored redevelopment project and that other aides intentionally blocked traffic leading to a heavily traveled bridge to punish a Democratic adversary are the subject of multiple investigations.
The administration has denied the storm aid charges and the governor has said he had nothing to do with the planning or execution of the lane closings.
Christie is scheduled to take his fiscal proposal to residents at a town hall meeting Wednesday in Morris County.
