New Jersey Has a Budget; Christie Vetoed Unconstitutional Spending Added By Legislature

There will be no budget shutdown in New Jersey as is the situation developing in Minnesota. Gov. Chris Christie signed the budget presented to him by the Democratic-controlled Legislature, but not without slashing spending by $900 million. The new $29.7 billion budget is $100 million more than the budget he originally presented to the Legislature, but the Democrats will spin mightily to complain that Christie slashed spending and made harsh cuts.

The problem for Democrats is that they propped up their spending with nothing more than wishful thinking. The state was already being forced to use a borrowing plan to tide the state over until it can present a bond measure in a couple of weeks because it lacked revenues on hand to do so. Democrats added hundreds of millions more in spending than they could ever hope to expect from their millionaires tax that they further added. Christie vetoed the millionaires tax and the spending. Besides, the millionaires tax had to be law before the budget was enacted in order to claim that the revenues were available and present - and it wasn't:

Little mattered until Thursday — Democrats could pass what bills they wished on Wednesday, but if they did not survive the Christie cut, the bills were almost certainly dead. The budget as sent to Christie was doomed. The only question was whether it would be cut in a way that would allow the state to not shut down or force legislators into a marathon session over the holiday weekend.

Christie's one gift to Democrats was that he chose the former. There will be no missed barbecues this July 4. The Democrats' budget was unconstitutional; it was not balanced as required by law. It may have included some dandy stuff, but there were insufficient funds. To borrow an oft-quoted phrase: Democrats were writing checks the state could not cash.

The first problem was that the budget only could be balanced if there were a millionaire's tax. And there wasn't. And there wasn't going to be one. But even if Christie had supported such a tax, it needed to be law before the Democrats' budget went to the governor.

It is not an easy time for legislators or the governor. They are all political creatures with agendas. Democratic legislators sold out to non-elected Democratic power brokers and agreed to transform public employees' lives, changing formulas for pensions and workers' contributions toward health care benefits. In the wake of that big sellout, there was a new kind of fire sale in which everything that could be salvaged from those ashes was put up for a vote.

I have not absorbed all the Christie cuts. Most of the increased school funding toward the so-called non-Abbott school districts has been cut. So has the Earned Income Tax Credit increase. And the millionaire's tax was axed like a tree in the Koch brothers' forest. None of this is particularly surprising. Nor will it be surprising to see Democrats try to override some of these vetoes next week.

To date, Christie has been brilliant at holding together the Republican caucus. I doubt few, if any, will defect. And the bottom line is that the budget has to be balanced by law. There is only so much revenue. The debate should be about priorities, and it has never been about that. Democrats added on without taking other things out. The only way to win with Christie is to force him to transfer one item for another. Instead, he was able to say the budget increased spending beyond certified revenues. It did.

Democrats in the Legislature have screwed the state for so long that their song and dance about how budget increases being cuts are getting stale (well, it's a common song and dance - especially in New York). A budget that spends more on education than the prior year is considered a cut because the spending is less than what the Democrats demanded even though there's no revenues to back up the plan.

New Jersey's Constitution requires a balanced budget, and that means that spending must require sufficient revenues. When those revenues aren't expected or can't be reasonably expected to materialize, something has to give. The Democrats' spending spree had to be cut.

The new budget will also provide $468 million in pension obligation payments, which is something that the state had not done in recent years and is part of the deal to overhaul the pension system in the state. There's also a slightly expanded homestead property tax rebate/credit. In all, the state is spending $30 million more than last year on education spending, including $450 million as required by the State Supreme Court following its misguided decision about those districts not getting a thorough and efficient education.

New Jersey Supreme Court Rules Christie Has To Cough Up $500 Million For Education; Money State Doesn't Have

Welcome to the wonderful world where plain meaning of statements in the state constitution can be misconstrued to the point that they no longer reflect the plain meaning or fiscal reality.

Such is the case today where the New Jersey Supreme Court ruled that New Jersey is not providing a "thorough and efficient" education to its students despite spending more per student that practically any other state in the country. The state has to come up with another $500 million.

In a widely anticipated decision, the New Jersey Supreme Court ordered the state to spend an additional $500 million on public education in poor districts next year.

The complex decision does not boost funding statewide, as education advocates had requested, and may avoid creating a gaping hole in a proposed budget of $29.4 billion. The 3-2 ruling, however, revealed sharp disagreements among the five justices who heard the case and issued a total of four opinions.

Justices could have ordered up to $1.7 billion in additional statewide education spending. Today's ruling gives Gov. Chris Christie and lawmakers some room to maneuver as they work to balance the state's budget by July 1.

Christie had argued that the state's current fiscal woes made it impossible to spend the full amount required by the funding formula approved by the court in 2009.

Still, the majority opinion written by Associate Justice Jaynee LaVecchia said Christie's cuts to education spending have been "consequential and significant" and must be rolled back. She also wrote that the state, which had promised to fully fund the formula, cannot back away from it when funding poor districts.

Consider that the special master for the case found that the state was spending more than neighboring states, was spending more per student, regardless of the cuts, and was still pushing to have cuts restored is quite troubling. Judge Peter Doyne's decision conflicted with his own findings, and that's formed the factual basis for this decision.

The Court ended up issuing four separate opinions in a split 3-2 decision, and we should be thankful that they didn't demand that the state find $1.7 billion in additional spending, which is what it could have demanded. Justices took to sniping at each other, with the majority claiming that the minority was looking to nullify decisions they didn't agree with. Of course, the majority itself was engaging in a bit of nullification when it misconstrues the plain meaning of "thorough and efficient".

For those who simply aren't up to speed on the situation, the State Constitution, Art. VIII Section IV, states:

The Legislature shall provide for the maintenance and support of a thorough and efficient system of free public schools for the instruction of all the children in the State between the ages of five and eighteen years.

Nowhere in Doyne's decision, and now the Supreme Court decision, is a way to actually pay for the education spending requirements. New Jersey has repeatedly failed to provide a thorough and efficient system of public education precisely because of the court's interventions with Abbott districts and the legislative and executive branch attempts to circumvent those restrictions that have redistributed billions of dollars with little effect or signs of improved educational performance in low-income districts.
The state spending more and more money hasn't translated into thorough and efficient education. Forcing the state to spend even more wont result in a thorough and efficient education system.

Education funding in New Jersey is hardly thorough or efficient - and that translates into a poor education experience for students. Throwing more money at the system wont make it any more thorough or efficient.

What the Court has done is override the will of the Legislature and Executive to determine an adequate funding level. This is what the New Jersey Supreme Court has done on a repeated basis - including its asinine Abbott rulings.

The Governor's office hasn't yet issued a statement about the decision, but you know it's going to be a doozy about how the Court has overridden the will of voters and taxpayers who will have to shoulder the burden.

No matter how many times New Jersey courts attempt to inflict its will on education funding formulas in New Jersey, the end result is not improved education for the students. Somewhere in all this, that message keeps getting lost. Money is not the problem nor the answer here. Demanding that state taxpayers kick in another $500 million isn't going to result in improved student performance - it certainly hasn't done so with the billions spent to date under the prior Court mandates.

Expect the usual suspects to demand that Christie enact or otherwise renew a millionaire's tax to fund the court's mandate, or find other taxes to hike to cover these costs.