Christie: Handing off a $600M budget surplus to next governor
Incoming Gov. Phil Murphy won't inherit a state budget in freefall, as it was for the last transition eight years ago, when tax revenues plunged during the Great Recession. But that’s not to say everything’s in great shape.
Gov. Chris Christie said when he took office, he had to fix a $2 billion deficit that outgoing Gov. Jon Corzine’s administration had obscured from his team – something the now lame-duck governor says will not repeat this year.
“The state budget today that I’ll turn over to the next governor won’t have a $2 billion hole. It will have a $600 million surplus,” Christie said last week in a speech in Bedminster to bankers, before he knew who'd replace him next year. “So he or she will not have to worry about sitting in some conference room looking for $2 billion to cut with five months left.”
The budget Christie signed in July projected an opening surplus of $507 million, so a balance of $600 million would be a slightly bigger cushion that anticipated.
Christie this fall increased spending on opioid-related programs by around $200 million, in part by redirecting unspent appropriations to those purposes, rather than lapsing them to the surplus. He also allocated extra tax revenue received last fiscal year, rather than put that into surplus.
At the same time, the state budget is also showing signs of stress.
While income taxes met expectations in the first quarter of fiscal 2018, sales, business and casino tax collections were down when growth had been expected. The state Treasury Department says sales taxes are down in part due to declining auto sales, a national trend.
Overall revenues are a little behind pace – but would be much further except the gas tax was almost 23 cents a gallon lower during the same period a year ago. It increased last year on Nov. 1. The gains in that tax amount to nearly 90 percent of the overall increase in tax collections.
It’s common for incoming governors to say fiscal and economic conditions they inherit are worse than they anticipated, particularly if the party in power switches hands. Jim McGreevey blamed an inherited deficit on Christie Whitman and Donald DiFrancesco, and Christie is still swiping at Corzine eight years later.
Christie never campaigned publicly with Lt. Gov. Kim Guadagno for this election, though he took an opportunity to talk her up and promote his economic record in the speech to bankers.
The state has more jobs than ever before, the second highest per capita income in America and last year had the nation’s sixth highest income growth, he said.
“New Jersey’s economy is doing really well," Christie said.
However, in the seven months between February and September, only two states lost more private sector jobs than the 7,800 shed in New Jersey – and one of those, Florida, was only worse because of Hurricane Irma’s impact on September figures.
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