Governor Christie’s state treasurer appeared before lawmakers Wednesday for the first time since announcing an $807 million budget shortfall last week, but he offered no new information about how the Christie administration plans to close the gap in the final weeks of the state’s fiscal year.
Instead, Treasurer Andrew Sidamon-Eristoff repeated much of what Christie told reporters during a news conference last week, specifically that the gap is primarily due to an underperforming income tax, and that no spending items are off the table as options are being considered to rebalance the state’s $33 billion budget.
“We are evaluating a wide range of alternatives,” Sidamon-Eristoff told members of the Assembly Budget Committee during its meeting Wednesday.
Those words frustrated some members of the panel who are concerned if the treasurer waits until his next scheduled appearance before the committee later this month, it would leave too little time to fully consider the impact of the administration’s budget fixes.
Only about $5 billion of the budget remains unspent, including an estimated $1.6 billion payment into the public employee pension system. Some aid to local schools, colleges and college students are other sizable items that have yet to be spent.
“Why not put the options on the table and have a discussion?” asked Assemblyman Joe Cryan, D-Union.
“In four weeks, one doesn’t really discuss very much when one is forced into action,” added Committee Chair Gary Schaer, D-Passaic.
But the treasurer said the Christie administration is still in the midst of a deliberative process to determine which options are available to close the gap.
“We believe it’s appropriate to take the time to perform an extensive due diligence,” the treasurer said.
For the last several weeks, lawmakers have been reviewing the $34.4 billion spending plan Christie proposed for the fiscal year that begins July 1. Since the state constitution requires a balanced budget, the $807 million shortfall in the current fiscal year, which ends June 30, is a major factor in their budget deliberations.
Sidamon-Eristoff told the lawmakers they should expect “significant adjustments” to Christie’s $34.4 billion budget when he comes back before the panel on May 21, but declined to detail specifics. Assemblyman Troy Singleton, D-Burlington, urged him to share more information.
“Today would be a great day for extensive engagement,” Singleton said.
But the treasurer repeated his earlier comments that the Christie administration is still looking at its options.
“Again, I think it is incumbent upon us to do due diligence,” he said.
Republicans on the panel praised Sidamon-Eristoff for taking time and being deliberative.
“I appreciate you playing it close to the vest right,” said Assemblyman Chris Brown, R-Burlington.
“I encourage you to take the time with the administration to make sure the difficult decisions that we have to make do not have unintended consequences,” said Assemblyman Anthony Bucco, R-Morris.
The treasurer did hold up the more than $2 billion in spending cuts Christie enacted in 2010 when he took office amid recession as a model for what could be expected when he comes back before the committee.
Those cuts included $820 million in education aid. Singleton warned that if school aid cuts will be looked to again, it would have an effect on local property taxpayers who fund school budgets.
Cryan also criticized $32 million in new revenue the administration is expecting to collect by increasing several fees and fines. They include increased air pollution permitting fees and higher motor vehicle fines.
He and Singleton also pressed the treasurer on the issue of revenue projections, citing examples of the Christie administration having to make midyear cuts and budget adjustments, which was noted as a factor in recent credit ratings downgrades announced by two of the three major Wall Street ratings agencies.
“Many of us are troubled by three consecutive years of [missed] revenue projections,” Singleton said.
Sidamon-Eristoff said most of the $807 million gap, about 85 percent, was directly attributable to the Department of Treasury not guessing right the effect of new federal tax rates enacted for the 2013 tax year. To address the “fiscal cliff,” President Obama and Congress lifted Bush-era tax cuts for the wealthy.
Because New Jersey relies heavily on its highest income earners, it assumed final payments in April from those taxpayers would be higher than they were. Treasury saw some of the problem coming in February when it the revenue projection, but did not realize the full force.
“We believe the risks were balanced,” said Charles Steindel, Treasury’s chief economist. “We were unfortunately incorrect.”