New Jersey Faces $10.5 Billion Deficit Next Fiscal Year, Forecaster Says
New Jersey, the third-most indebted U.S. state, faces a $10.5 billion deficit next year, nearly matching the one Governor Chris Christie closed in his current $29.4 billion budget, the Office of Legislative Services said.
The fiscal 2012 estimate is based upon using existing revenue sources to fully fund all state programs and obligations, many of which Christie cut to balance this year’s plan, David Rosen, the agency’s chief budget officer, wrote in a July 12 memo to Assembly Democrats, who sought the information.
The state will need $3.53 billion to fully fund its pension contribution and $2.3 billion for public schools. It also faces the loss of $1 billion in federal stimulus money, Rosen said. He projected a total spending increase of $11.5 billion, and only $1 billion of higher revenue. Christie and the Democratic-led Legislature filled a record deficit of $10.7 billion this year.
“This year will be of the same magnitude,” Rosen said in an interview today. “It’s always a moving target and things could change.”
Christie, 47, a Republican, took office in January pledging to fix state finances without raising taxes. His first budget skipped a $3 billion pension payment and lowered aid to public schools and municipalities by $820 million and $445 million, respectively. The plan also suspended property-tax rebates until next year, when it will owe $2.1 billion, according to Rosen.
“This is not a problem that is going to lend itself to a single bold, dramatic solution,” said Andy Pratt, a spokesman for Treasurer Andrew Eristoff. “It’s going to take many actions by the governor over the next four years to change this.”
Assembly Majority Leader Joseph Cryan, a Democrat from Union, said Christie’s cuts to funding for schools and towns, missed pension payment and rebate cuts amounted to “cost avoidance.” New Jersey will need to look at ways to increase revenue, through a rebounding economy or new sources, as a way of fixing finances, Cryan said.
“He just didn’t pay the bills,” Cryan said. “We’ve got to look at ways to grow revenue. We haven’t solved anything yet and clearly there’s a whole lot of work that needs to be done for next year.”
California and New York rank first and second in total net tax-supported debt, according to Moody’s Investors Service.
The fiscal 2012 deficit estimate was reported earlier by the Star-Ledger, New Jersey’s biggest newspaper.