New Jersey’s Difficult Choices

Governor Chris Christie can no longer claim that New Jersey is a model for bi-partisan governance that Washington should emulate.

Yesterday, Senate President Steve Sweeney, playing the role of U.S. Senator Ted Cruz (R-Texas) before The Star Ledger’s Editorial Board, threatened to shut down New Jersey’s goverment if Governor Chris Christie doesn’t support a budget for the next fiscal year that makes the state’s payment into the pension system required by the “landmark” legislation that Sweeney and Christie hammered out in 2011, and that Christie has touted as one of his major accomplishments.

Sweeney is reacting to what Christie said about the pension system during his State of the State Address two weeks ago.

Here’s what Christie actually said:

Lastly, let me share with you one more, hard truth that makes this new attitude of choice necessary for New Jersey’s future.

We have discussed many exciting opportunities for investment in our state. K-12 education. Higher education. Crime prevention. Drug rehabilitation and job training. Health care. Infrastructure investment. Lower taxes. Job growth. All exciting, all of which, done responsibly, could make New Jersey an even greater place. But here is the simple truth. We cannot afford to do it right now.

Why?

Because of our pension and debt service costs. For the Fiscal Year 2015 Budget, the increase in pension and debt service costs could amount to as much as nearly $1 billion.

That’s nearly $1 billion we can’t spend on education. That we can’t invest in infrastructure improvement. That we can’t use to put more cops on the street. That won’t be available to improve access to health care. And for those who would advocate for higher income taxes like the ones I have vetoed before, remember that the amount raised would not even cover the increase in our scheduled pension payment and would undoubtedly make us less competitive in the job market nationwide.

These are the consequences of failing to engage in an attitude of choice. If we continue in an era where we believe we can choose everything, we are really choosing nothing. We need to have the conversation now about further changes to our pension system and to adding further to the state’s debt load. But the time to avoid this conversation and these choices is nearly over.

If we do not choose to reduce our soaring pension and debt service costs, we will miss the opportunity to improve the lives of every New Jersey citizen, not just a select few.

I am ready to engage in those conversations and help, with you, to truly create an attitude of choice. The result will be a better, smarter, stronger New Jersey. The results from our refusal to choose – a weaker New Jersey with a middle class burdened by even higher taxes. That is an abandonment of our duty.

Centuries ago, a philosopher wrote that “choice, not chance, determines your destiny.”  And this remains true for New Jersey today.

Our destiny is not set – it is the product of the choices we make. Our future is not set – it, too, is the product of the choices we make from this day forward.

So let us choose wisely.  And let us not fail to act.  Let us create an attitude of choice.

 

Christie concluded that we should choose to fund better schools, safer streets and creating opportunity “for every citizen, through an excellent education, a productive job, and a thriving community.”

Sweeney took the short view, the politically expedient tactic, in framing Christie’s words as a call to return to the past practices of every governor since Jim Florio to short change the overly generous pension system in favor current government spending without funding that spending with current revenues.

Sweeney offered a false choice as a solution to the pension problem in his meeting with The Star Ledger Editorial Board…freeze all state spending over the next three years at its current level in order to make the pension payments required by the 2011 reform bill without raising taxes.  That’s a false choice because the math won’t work.  Unless New Jersey’s economy miraculously heals itself, throwing off unanticipated billions of dollars in sales and income tax revenues, freezing spending at current levels won’t cover the pension payments that gradually grow to over 15% of the state’s budget over those three years.

The simpletons on the Editorial Board said that Sweeney’s idea has more integrity and more pain than Christie’s call for an honest conversation.  The Editorial Board’s solution…increase taxes on the rich “to soften the blow” is also a false choice.   The pension problem, caused by 20 years of increasing pension promises without paying for them and calling the budgets balanced when they weren’t, will not be solved by increasing taxes.

The Common Sense Institute of New Jersey released a policy report by Richard C. Dreyfuss and Steven Malanga yesterday, New Jersey Pension Study, that factually lays out the depth of New Jersey’s pension problem.   The conclusions are harsh but honest: More reforms that include but are not limited to honest accounting, reduced benefits, increased employee contributions and modifying normal and early retirement ages are necessary.  “Absent this the current net out-migration of residents together with an unfavorable economic climate and mounting pension debt does not bode well as an incentive to live, work and invest in New Jersey.”

As a candidate for governor in 2009 Christie said he would govern as a one termer, i.e. that he would conduct himself without regard for short term political concerns and then let the voters decide whether or not to give him another term after four years of “turning Trenton upside down.”

We may never know if Christie meant that when he said it.  We do know that he governed that way for a short while until 1) Republicans lost the battle of the legislative map and 2) Nancy Reagan, Henry Kissinger and wealthy Republican donors asked him to run for president.   In 2011 Christie transformed from a reformer into a compromiser.  He let the Trenton special interests off the hook as his foil and replaced them with “Washington” as his eyes were set not on turning Trenton upside down but on 1600 Pennsylvania Ave.

We need the kind of leadership that Christie promised in 2009 if New Jersey is going to be a good place to live, work and invest.  Otherwise, we might as well start packing.

 

Posted: January 29th, 2014 | Author: Art Gallagher | Filed under: Chris Christie, Pensions, Stephen Sweeney | Tags: Chris Christie, Common Sense Institute of New Jersey, Pension reform, Pension System, Richard C. Dreyfuss, Steve Sweeney, Steven Malanga | 5 Comments »

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