New Jersey’s Republican Gov. Chris Christie delivered his second budget address yesterday to a joint session of the Democratically controlled state legislature on Tuesday. Christie unveiled a $29.4 billion spending plan, a reduction of 2.6% from last year’s budget, and the second straight budget that cuts state outlays. Christie said that his budget represents “the new normal,” in New Jersey, and that his administration would follow a new way of budget planning: zero-baseline budgeting. He told the assembled legislators that New Jersey—and by extension the governor himself—is leading the national budget-cutting consciousness, essentially claiming credit for austerity plans from coast to coast.
“Every year, the Office of Legislative Services [New Jersey’s equivalent of the Congressional Budget Office] puts out a projected deficit. The only problem is that this number assumes no one is actually managing the budget or setting priorities. That is yesterday’s New Jersey,” Christie said.
“For too many years, our government has operated under the belief that the baseline—the place you begin—is to continue to fund every program in the budget: regardless of the fiscal climate, regardless of the economy, and regardless of the effectiveness of the program. Not anymore. Our process is based on the belief that to survive and to grow, you need to build a realistic budget from the bottom up. You fund what you need—this year—to succeed, not every relic from two decades ago that is still on the books.
“The baseline is zero. Zero-based budgeting, which I promised in the campaign, has finally come to New Jersey.”
In addition, Christie said that every department of state government has been tasked with managing its performance against the budget throughout the year, rather than just at the end of the year. The result, he said, will be better accountability from every employee of state government for the taxpayers’ money.
Christie cited seven state departments that will receive less funding than a year ago, most between 1% and 3% less, but some as much as much as 15%. He also proposed moving some Medicaid recipients onto managed care plans to save roughly $250 million. State aid to municipalities would remain at the same level as last year while state education aid—the single largest portion of the budget—would increase by $250 million, essentially setting up a choice for legislative Democrats between entitlement spending and education funding.
On taxes, Christie announced $200 million in small-business tax breaks, many similar to tax cuts that he vetoed just last week. The governor explained that he rejected the Democratic tax cuts because they were not paid for in the budget. “This tax-cut package,” Christie said, “every dollar of it, is paid for with spending cuts.
“Responsibly changing New Jersey’s tax climate does not mean running deficits to cut taxes—it means cutting taxes in a balanced budget to create job growth. These reforms will be phased in carefully and are paid for as part of the state budget. … We cannot have tax cuts that we do not pay for.”
Christie said that the issues facing New Jersey are the same as those confronting states nationwide, including the increasing costs of education, pensions and benefits for public employees, and entitlements.
“All across the country, Democratic and Republican governors are grappling with inherited budget deficits, skyrocketing pension and benefit costs, and state government cultures which embrace the status quo—no matter how destructive. They are just now coming to terms with the gravity of the situation we understood and responded to last year,” Christie said.
“Some thought the change might come from the federal government. But that hasn’t been the case. It is spending more than ever. The change is coming from the states, and the charge is being led by New Jersey. … Today, states as diverse as California and Wisconsin, Ohio and Florida, New York and New Mexico, are following the New Jersey model we fought for last year. Democratic governors and Republican governors now look to New Jersey as a beacon of hope for what can happen when leaders lead and a people sacrifice as one for the future of our children.”
Christie singled out New York Gov. Andrew Cuomo and California Gov. Jerry Brown, two Democratic governors advocating cuts in government jobs and salaries, as well as Republican Governors Rick Snyder of Michigan, John Kasich of Ohio, and Scott Walker of Wisconsin, as proof that his own budget cuts are in line with the political mood in the country.
New Jersey will have legislative elections this November, and Republicans in the state hope that Christie’s 52% favorability rating will help them make gains in both houses, if not take control of one or both. Christie would certainly like to see that. But outside observers may see something else in his claim to be at the vanguard of a new national movement for fiscal discipline. Although he has repeatedly and enthusiastically denied any interest in running for president in 2012, this budget address seemed designed to play to a national audience. In the wake of his national coming-out speech delivered in Washington last week, the question may soon turn from whether Christie will run, to when.