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Tuesday, June 30, 2015

Chris Christie: A Financial and Fiscal Wreck Wants To Be Your Presdient






Pro Publica re post.....

Chris Christie’s Budget ‘Sins’

In pledging to fix New Jersey’s ailing finances, Gov. Chris Christie promised to avoid one-time budget fixes he called “sins of the past.”  
A review by ProPublica and The Washington Post shows he’s committed some of the same sins – and some new ones. 
by Cezary Podkul, ProPublica, and Allan Sloan, The Washington Post, April 17, 2015, 4:05 p.m.


 This story was co-published with The Washington Post.


Underfunding Pensions

New Jersey Gov. Chris Christie delivers his budget address
for fiscal year 2016 to the Legislature in February.
(Jeff Zelevansky/Getty Images)

How it 
worked: Christie has paid $2.2 billion into the state’s pension funds so far, less than agreed to under a landmark 2011 pension reform he championed.

Results: Because of skipped payments by Christie and predecessors, forecasts say the pension funds will run out of money by 2032.

Former New Jersey governors who did it: Christine Todd Whitman (R), 1994-2001, Donald DiFrancesco (R), 2001-2002, Jim McGreevey (D), 2002-2004, Richard Codey (D), 2004-2006, and Jon Corzine (D), 2006-2010.
Christie response: Aides say Christie has still put in more cash into the pensions than his predecessors if borrowed funds contributed under Gov. Whitman are excluded.
Toll Money Shuffle

How it worked: After canceling an $8.7 billion cross-Hudson rail tunnel in 2010, Christie took $1.25 billion of highway tolls for the project to pay for new roads and bridges. Later, he shifted the tolls to the operating budget to plug shortfalls.

Results: Shifting the money to the general budget forced the Transportation Trust Fund to replace it with $1 billion in unplanned borrowing.

Former New Jersey governors who did it: None
Christie response: State Treasurer Andrew Sidamon-Eristoff said the diversion was appropriate because the money ultimately offset the staate’s subsidy to New Jersey Transit, the state-owned rail and bus carrier.
Booking ‘Bond Premiums’

How it worked: Governments sometimes sell debt at above-market interest rates to get extra cash. On Christie’s watch, the Transportation Trust Fund raised $266 million from such “bond premiums,” more than all prior governors combined.

Results: The fund has to pay more interest. By June 2016, it will have only enough cash coming in to pay existing debt with no room for new projects.

Former New Jersey governors who did it: Corzine also sold premium-priced bonds, but only a small fraction of what Christie sold.
Christie response: Treasury officials said investment bankers advised that premium-priced bonds were a better deal in the long run.
Short-term Borrowing

How it worked: Governments routinely borrow short-term to cover bills until money rolls in at tax time. Christie has borrowed more sooner. Last July 1, New Jersey borrowed $2.6 billion that is due four days before the fiscal year ends in June.

Results: Taking larger, short-term loans for nearly the entire fiscal year signals growing distress.

Former New Jersey governors who did it: McGreevey hit more than $1 billion in short-term borrowing. Corzine at one point borrowed $2.65 billion.
Christie response: Treasury officials said borrowing a bigger amount in one swoop instead of smaller chunks helps manage cash needs more efficiently
Delaying Property Tax Rebates

How it worked: New Jersey has the nation’s highest property taxes. Christie’s administration cut payouts for the Homestead Benefit, a property tax offset, and has delayed paying the benefit to save cash.

Results: No benefit was paid to low-income homeowners in 2014, versus $2 billion paid in 2007 to more than 1.7 million households. The state plans to give $374 million to about 780,000 households in May.

Former New Jersey governors who did it: After initially expanding the program, Corzine reduced eligibility by lowering qualifying incomes.
Christie response: Treasurer Sidamon-Eristoff said the smaller payouts mainly are due to Corzine’s reduction in eligibility.
Lottery Outsourcing

How it worked: In June 2013, the Christie administration signed a 15-year deal for an outside vendor to handle the lottery’s sales and marketing. The state got $120 million in upfront cash that went to the 2013 budget.

Results: The contract was supposed to help the state grow lottery sales. Lottery receipts in fiscal 2015 are down 3 percent versus an expected slide of 1 percent.

Former New Jersey governors who did it: None.
Christie response: Treasurer Sidamon-Eristoff said other lotteries have seen sales drops and that New Jersey might be worse off without the contract.
Tobacco Bonds

How it worked: In March 2014, the state netted $92 million for its budget by pledging additional cash to repay two troubled bond issues backed by New Jersey’s share of a 1998 settlement with tobacco companies.

Results: The deal requires the state to pay out about $400 million of tobacco income over seven years, money that would otherwise go to the general budget. The diversions begin in July of 2017, shortly before Christie’s term expires.

Former New Jersey governors who did it: McGreevey and Corzine both sold tobacco bonds to balance budgets. At a February town hall, Christie said, “We’re not doing that anymore.”
Christie response: Treasury officials said the deal will save taxpayers money over the long term.
Cash from Legal Settlements

How it worked: Christie proposed settling a pollution lawsuit against Exxon Mobil for $225 million, versus the $8.9 billion the state sued for. Part of the money may end up plugging the 2016 budget. Most of another $190 million pollution settlement went to the 2015 budget.

Results: Environmentalists say doing so reduces money meant for clean-ups. Christie’s 2016 budget features language to allow more such diversions.

Former New Jersey governors who did it: None.
Christie response: Treasurer Sidamon-Eristoff said the budget language ensures that at least some of the settlement money gets spent for environmental purposes.
Clean Energy Fund

How it worked: Under Christie, nearly $1 billion has been diverted from the state’s Clean Energy Fund to help balance budgets. The 2016 budget proposes additional diversions.

Results: Corzine diverted $60 million of Clean Energy Funds.

Former New Jersey governors who did it:
Christie response: Treasurer Sidamon-Eristoff said the diversions merely took surplus cash haven’t hurt New Jersey’s “robust” clean-energy program.
Municipal Aid

How it worked: Christie cut aid to cities and other local governments by about 17 percent in 2010.

Results: The cut arrived at the same time a 2 percent cap on local property tax increases took effect, squeezing budgets and contributing to cutbacks.

Former New Jersey governors who did it: Corzine also reduced municipal aid by about 9 percent in 2008.
Christie response: Treasurer Sidamon-Eristoff said the cuts are more than offset by Christie’s 2011 pension and health benefit reforms. He put the savings at $900 million.
Source: New Jersey budget and tax documents, Office of New Jersey Governor Chris Christie, news reports

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Cezary Podkul covers finance for ProPublica.

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