On March 16, Governor Chris Christie delivered a budget address that lays a strong foundation for a better and more prosperous New Jersey. It was a watershed moment that fundamentally changes the way the state maintains its finances and provides an opportunity for long-term economic growth, job creation and a more affordable New Jersey.

 A Look at the Numbers

New Jersey is required by our state's constitution to operate on a budget in which revenues and expenditures are in balance. If New Jersey were to maintain the status quo, we would need to spend $38.4 billion during the next fiscal year. That is without adding any new programs, property tax relief or tax reductions. New Jersey, however, is expected to take in only $28.3 Billion in revenue next year. That leaves a gap, or structural deficit, of over $10 billion - a staggering amount of money that we do not have. Over the past decade the state has papered over deficits and allowed itself to significantly increase spending one year after the next with a risky and unpredictable combination of tax increases, accounting gimmicks and outright money diversions. Taxes were raised over 115 times on everything from income, to home heating bills and cell phones to motor vehicle fees, leading to the affordability crisis we now face. Billions of dollars in bonds were sold to fund excess spending. New Jersey's debt burden is now one of the top five in the country with 8.5 percent of the budget going toward debt service. Billions more were raided from the Unemployment Insurance funds. Money that was sorely missed when unemployment in the state rose to the highest in the region.

Past Practices

Over the past decade the state has papered over deficits and allowed itself to significantly increase spending one year after the next with a risky and unpredictable combination of tax increases, accounting gimmicks and outright money diversions. Taxes were raised over 115 times on everything from income, to home heating bills and cell phones to motor vehicle fees, leading to the affordability crisis we now face. Billions of dollars in bonds were sold to fund excess spending. New Jersey's debt burden is now one of the top five in the country with 8.5 percent of the budget going toward debt service. Billions more were raided from the Unemployment Insurance funds. Money that was sorely missed when unemployment in the state rose to the highest in the region.

Since Governor Christie's election last November, citizens across New Jersey have become more optimistic that Trenton has gained the maturity to make reasonable decisions that enhance the long-term prosperity of our state. The false choice advocated by the Governor's opponents of surprisingly-permanent "temporary" tax increases vs. long term affordability is a losing attempt to maintain the status quo - a status quo that would cripple the state we are proud to call home. With a long list of tough choices, it is going to take cooperation and compromise to pass a balanced budget by the July 1 deadline. Actions and proposals to date have already put New Jersey on a new and better path. With a renewed sense of common purpose I am confident that Governor Christie and the Legislature will meet the challenges ahead and move New Jersey forward.

This op-ed was printed in the May 2010 edition of Inside Business.

05/01/10
Budget Address Targets Problems & Sets Stage For Bright Future