Gov. Chris Christie will present a spending plan that calls for no new taxes and further pension reform when he delivers his budget address Tuesday afternoon for fiscal year 2015.
According to prepared excerpted remarks released in advance of the address, Christie will make the case that the new budget indicates an "era of fiscal restraint" as it is $2.2 billion smaller than fiscal year 2008, when health care, pension and debt service costs were excluded. That margin represents a reduction in discretionary spending over the past five years, according to Christie.
Christie will also propose "making the largest pension payment ever" of $2.25 billion into the state workers' pension fund, up from the $1.7 billion contribution being made in the current fiscal year.
"How groundbreaking is a $2.25 billion payment in one budget? That payment is nearly the equivalent of the total payments made in the 10 years before we arrived by five different governors," Christie says. "We've kept faith with our pensioners."
But Christie will claim that such a large payment will hinder the state's ability to focus on and dedicate spending to other areas such as education, tax relief, public safety, higher education, drug rehabilitation, health care and other critical services. More bipartisan pension system reform is needed, according to Christie.
"The reforms we enacted together are going to save New Jersey's state and local governments $122 billion in the 30 years from 2011 to 2041," says Christie. "Together, we are cleaning up the mess of the past. But this simply isn't enough."
Top Democrats have repeatedly said that anything other than a full pension payment, which amounts to $2.4 billion for the next fiscal year, will lead them to not pass a budget and set the stage for a government shutdown.
State Sen. Paul Sarlo (D-Wood-Ridge), chair of the Senate budget committee, said in a news conference Monday alongside Senate President Steve Sweeney (D-West Deptford) that the consistently "overly optimistic" revenue projections put forth by the Christie administration were partially responsible for the state's revenue shortfall, which could be as much as $500 million.
But Christie won't look to new taxes to make up the difference.
"Now there will be some that would advocate that the answer is to raise taxes," according to Christie. "Not only is this an unfair solution; it isn't a solution at all. We just can't raise taxes enough to pay for the exploding costs of public employee pensions and benefits. Not to mention the burden it would place on our already-overburdened taxpayers."
Christie will speak at 2 p.m. Tuesday afternoon in the Assembly chambers at the Statehouse in Trenton.
ALSO ON NJBIZ: