With the nation riveted by public-sector showdowns in Wisconsin and Ohio on Tuesday, the guy who started it all — Gov. Chris Christie — took some credit back home in New Jersey.
But Christie risks disappointing his fans: His new budget doesn’t build enough on last year’s foundations — or on the governor’s political capital.
Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich have made Christie look reasonable: They want to gut collective-bargaining rights for state workers. All Christie ever wanted was fiscal sacrifice — e.g., for state workers to pay more for lower benefits.
But Christie made it all possible: He was the first “blue”-state leader to take on sacred cows like teacher benefits, and he lived to tell the tale. He’s changed the tone — nationwide.
As he noted Tuesday, governors from California’s Jerry Brown to New York’s Andrew Cuomo sound like him. “Look at how other states are following New Jersey,” Christie said. “In Wisconsin and Ohio, they have decided there can no longer be two classes of citizens — one that receives rich health and pension benefits and all the rest who are left to pay.” In the absence of national fiscal leadership, “the change is coming from the states, and the change is being led by New Jersey.”
All true. But will he keep it up?
Christie admits that New Jersey has only taken its “first steps” to solvency. He’s forthright that the state still relies on one-shots to balance its budget — he’s just cut such reliance significantly, to 2 percent of revenue, since the Corzine era.
Yet some of his proposed next steps add up to just running in place.
First, he’s increasing state education aid to cities and towns by $250 million. OK, it’s a only third of what he cut last year. But New Jersey has a way to go before it can say it’s spending wisely. As Christie said, Newark spends $24,000 a year and Asbury Park $33,000 so that “barely half” their kids can do math. Before hiking outlays, it would be prudent to see if Christie’s other reforms, including 23 new charter schools, work.
Worse, he risks sending voters the message that it’s safe to spend again — not a good idea when the Dem-controlled legislature is up for election this fall.
Second, there’s pension reform. Christie wants the Legislature to eliminate automatic inflation protection for current and future retirees, and wants all current workers to contribute more to their own retirements — 8.5 percent of their wages from as low as 3 percent. And he wants younger workers to work ’til 65, up from 62.
He should push to put new workers into 401(k)-style plans. We need a national debate on retirement, in the public and private sectors — and this would be a good way to start one.
Worse, New Jersey is cheating by skipping pension payments. For this year and next, Christie pledges only $506 million in pension contributions — when the real payment should be closer to $7 billion. Moreover, he says he’ll make the payment only if lawmakers agree to his reforms.
Sorry, this just confuses the situation — and makes it look rosier. Today’s payments — and yesterday’s missed payments — are mostly for past work. No matter what reforms Christie gets, New Jersey taxpayers can’t get out of them.
The governor shouldn’t wait for reform to make up for the state’s past mistakes. Better to spend an extra dollar today on past pensions, rather than on hiking school spending.
Third, there are public-sector health benefits. Here, Christie is tough: State workers would pay 30 percent of their benefit costs, up from 8 percent. That’s good.
But Christie would put the savings toward doubling a rebate that the state sends out to homeowners to make up for their high local property-tax burden. This is pandering.
Yeah, voters like lower property taxes. But to truly achieve that, local governments have got to fix local spending. Christie can help — indeed, he’s made a great start, with his property-tax cap and with efforts to reduce state mandates on local governments.
But he should keep on with that drive — not use state aid to mask the effect of local spending.
Finally, Christie is missing one big thing: New Jersey’s roads are a mess — and the state still needs better rail if it wants to grow.
Yes, Christie is cleaning up transportation-authority cesspools — and budget documents show that he wants to do more. But much of his $200 million increase for capital “construction” goes to past obligations of the state’s “transportation trust fund.”
Christie should have said that he wants voters to hold him accountable for big infrastructure improvements, just as for education results — and that one of his goals for next year is to revisit whether it’s time to invest money and time in new Hudson River tunnel capacity. They have to do it someday.
The governor could have good reason for his decisions. Maybe he figures that doubling local-tax subsidies, while nauseating, is necessary to show good will — and to get voters to pick Republican lawmakers who’d vote for reforms.
But nobody — including Chris Christie — has done enough to have earned the citizenry’s fiscal trust.
Nicole Gelinas is a contributing editor to the Manhattan Insti tute’s City Journal.