Column: Governor Showed Off His Power

Many have said the governor of New Jersey is among the most powerful state chief executives in the nation.

Recent events should leave no doubt of that.

Fresh off a victory that imposes higher pension and health care payments (read: salary cuts) on public employees, as well as pension benefit cuts—yes, when you have to wait longer to retire and have no possibility of cost of living increases, that’s a cut—Gov. Chris Christie wielded his pen like sword last week.

He hacked $900 million from the Legislature’s version of his budget, vetoing 30 pages of line items. The biggest cut was $500 million from aid to schools, but he sliced and diced his way through a whole host of programs aimed at helping the poor and numerous social services projects. He also whacked away at special municipal aid and money to subsidize libraries.

In addition, there was a reduction of about $50 million in college tuition assistance and the elimination of more than 1,000 state-funded positions at the state’s public colleges and universities. Coincidentally, that same day, the U.S. Department of Education unveiled a website of college costs that shows two NJ public schools—NJIT and TCNJ—are among the 20 most expensive public schools for tuition and fees in the nation, charging roughly two times the national average of $6,397. It also shows Rowan University has the fourth highest net price, which includes room and board and deducts financial aid.

Christie said he had to make the cuts to balance the budget. The Democrats, acting on advice from the non-partisan Office of Legislative Services, had maintained the state would have more money to spend and so had tried to include many items the governor had initially cut, and then some.

In the vast majority of cases, they did not succeed.

Which side was right about estimated revenues for the coming year remains to be seen.

In tough times, it’s good to be fiscally prudent, but not at the expense of programs that people, especially the most vulnerable, need. This budget is not as onerous as last year’s. But if there’s money available to help those most in need—say, by restoring the earned income tax credit reduced last year to give $45 million back to a half-million low- and moderate-income residents—it should be done.

Particularly when so many other priorities appear skewed.

For instance, Christie signed two corporate business tax cuts, as well as a reduction in the amount of money employers (not employees) contribute to the state unemployment trust fund. The latter move sent the trust fund $650 million deeper into debt and will necessitate an additional $26 million in interest on the federal unemployment loan. According to ProPublica, the state already owes the feds $1.6 billion. And nearly one in 10 workers is still unemployed. Does this scenario sound vaguely familiar … something about not funding public pensions properly?  

Christie also once again vetoed attempts at a so-called “millionaire’s tax.” The Democrats’ bill would have increased the top tax rate on those with more than $1 million in income by 1.78 percentage points or 1.8 cents per $1 above $1 million to 10.75 percent.

Christie says raising taxes is the wrong thing to do and the top 1/10 of 1 percent of the state’s taxpayers already pay 19 percent of the income tax.

Of course, they also have the greatest ability to pay. The income tax, being based on income, is the fairest of the three biggies: incomes, sales and property.

Democrats like Camden County Assemblyman Lou Greenwald, the budget chairman for the lower house, criticized the veto as more Christie ideology, saying the governor chose to “stick to his mantra of tax cuts for millionaires and tough luck for everyone else.”

That millionaire’s tax would have been temporary and yielded an estimated $1 billion or so over this and the next fiscal years. The bill wasn’t perfect, containing a provision that would have increased the amount of pension and retirement benefits exempt from taxation. That section would have lead to a continuing annual revenue loss of about $60 million. While lower income seniors could benefit from that, it’s arguable whether someone with $100,000 in pension income needs such a tax break.

Still, it’s hard not to think Christie’s actions are sending the message Greenwald articulated.

And it’s a message Democrats won’t be able to overcome until anytime soon. Any veto override needs a two-thirds majority vote and no Republican is going to vote with the Democrats.

So you can see where the power lies in New Jersey and how it is wielded.

Colleen O'Dea is a writer, editor, researcher, data analyst, web page designer and mapper with almost three decades in the news business. Her column appears Mondays.