Gov. Chris Christie addressed the state legislature in Trenton this afternoon and called on them to enact tax relief along the lines of the proposal he first offered earlier this year.
Senate Democrats countered that they provided tax relief to the tune of $183 million only if the state met the Governor's revenue projections. The contingency is a sound policy choice, but that isn't stopping Christie from hammering away at Democrats who are blocking this portion of tax relief.
Gov. Christie was far too aggressive in his budget projections and it's far too likely that New Jersey will not meet Christie's unfathomably high 7.2% growth rate. New Jersey budget projections for the fiscal year that ended June 30, 2012 fell short of its projections, and there's no reason to anticipate anything improving in FY 2013.
The conservative move would be to limit spending make conservative revenue projections so that if revenues come in better than anticipated, it grows the rainy day fund that can then be used to pay down structural debt, fund the pension fund, and the transportation trust fund.
Christie has managed to fund the pension funds to the tune of about $1 billion, but that's only beginning to put a dent in the chronically underfunded state pension funds. Much more needs to be done on that front.
At the same time, the state has to address the transportation trust fund so that transportation projects to repair the creaky infrastructure are addressed. The budget ends up using funds from the ARC project that were killed to fill part of the hole, while borrowing takes care of the rest. Additional borrowing only saddles the state with more debt and reduces the amount available for transportation projects in future years as debt service takes up an ever greater percentage of the budget.
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