Path 2

News Economy Tuesday, Jan 13 2015

MEMO: Chris Christie’s Terrible Economic Record

Jan 13, 2015

Jump to Content

To: Interested Parties
From: Brad Woodhouse, President, American Bridge 21st Century
Date: Tuesday, January 13, 2015

Tonight, New Jersey Governor Chris Christie will deliver his State of the State address. We hope he uses this chance to come clean about his serious money problems: his credit has been downgraded eight times. He hasn’t saved enough for retirement. And his security detail is costing him 18 times what it did 5 years ago.

Why should he talk about his money problems during the State of the State? Because they have nothing to do with his bank account – we’re talking about New Jersey taxpayers’ money here.

Since Chris Christie took office in 2010, he’s been playing fast and loose with taxpayer money. He has mismanaged the budget, resulting in New Jersey’s credit has been downgraded eight times – no New Jersey governor had ever presided over that many downgrades. He’s spending 18 times more on his personal security today than when he took office, for a total of almost $1 million, or nearly $33,000 per month. He’s cut $2.4 billion in pension payments he promised to make because his budget projections were wrong.

And the list goes on:

Yes, the more taxpayer money Chris Christie touches, the more problems we see. To read more about Chris Christie’s money problems, check out the attached memo put together by American Bridge’s crack research team.

Watch our new video, and check the research on Chris Christie’s dismal year below.

Credit Downgrades

At The End Of 2014, New Jersey’s Credit Rating Was The Second Lowest In The Country. According to the Wall Street Journal, “New Jersey’s incentives programs include substantial tax breaks and credits, but also loans. The subsidies flow as the state’s economy has had a hard time gaining traction. New Jersey’s unemployment rate of 6.4% is higher than the national rate, and the state has seen its credit rating drop to the country’s second lowest, next to Illinois, according to Moody’s.” [Wall Street Journal, 1/7/15]

New Jersey’s Credit Rating Had Been Downgraded Eight Times Under Christie. According to NJ.com, “Standard & Poor’s today became the latest agency to downgrade New Jersey’s credit rating, saying that shorting the state’s public employee pension obligation, making rosy revenue forecasts that didn’t come true and relying on one-shot budget measures have put ‘additional pressure on future budgets.’ S&P also cited ‘lack of consensus among elected leaders on how to return to structural balance’ and an ‘above-average debt burden.’ This is the eighth time a credit rating agency has downgraded New Jersey since Christie took office in January 2010. And it comes just five days after another agency, Fitch, knocked New Jersey’s rating down a peg. No New Jersey governor has had as many downgrades on his or her watch.” [NJ.com, 9/10/14]

  • No New Jersey Governor Had Presided Over Eight Credit Downgrades Before. According to NJ.com, “This is the eighth time a credit rating agency has downgraded New Jersey since Christie took office in January 2010. And it comes just five days after another agency, Fitch, knocked New Jersey’s rating down a peg. No New Jersey governor has had as many downgrades on his or her watch.” [NJ.com, 9/10/14]
  • Christie Said He Does Not “Put A Lot Of Stock In Credit Agencies.” According to the Star-Ledger, “Christie brushed the downgrades aside, saying he doesn’t ‘put a lot of stock in credit agencies.’ ‘I don’t think about it at all when balancing a budget,’ He said. ‘I’m not going to raise taxes on the people of New Jersey and drive them out.’” [Star-Ledger, 7/1/14]

Poor Job Growth

New Jersey’s 2014 Job Growth Was The Second Worst In The U.S., And Saw The State “Walk In Place While The Rest Of The Nation Picks Up Speed.” According to the Asbury Park Press, “New Jersey’s job growth the past year was the second worst in the nation, figures released last week showed, continuing a trend that has seen the state walk in place while the rest of the nation picks up speed. […] The past year has done little to change that. New Jersey added just 9,200 jobs from October 2013 to October 2014, for a growth rate of 0.23 percent. It was better only than Alaska, which was the only state to lose jobs during the same time, according to the U.S. Bureau of Labor Statistics. […] ‘In almost all of the economic data comparing New Jersey to the national recovery, the state has been a laggard for more than a decade now,’ said Patrick J. O’Keefe, director of economic research for the accounting firm CohnReznick. The October figures ‘are just another indication that we’ve gone another month in which we haven’t made any progress.’” [Asbury Park Press, 11/22/14]

  • New Jersey Only Added 9,200 Jobs Between October 2013 And October 2014. According to the Asbury Park Press, “The past year has done little to change that. New Jersey added just 9,200 jobs from October 2013 to October 2014, for a growth rate of 0.23 percent. It was better only than Alaska, which was the only state to lose jobs during the same time, according to the U.S. Bureau of Labor Statistics.” [Asbury Park Press, 11/22/14]
  • In October 2014, New Jersey Lost 4,500 Jobs. According to the Asbury Park Press, “The state in October lost 4,500 jobs, and its unemployment rate rose to 6.6 percent from 6.5 percent. By comparison, the nation recorded a net gain of 214,000 jobs, and its jobless rate declined to 5.8 percent from 5.9 percent, according the preliminary statistics from BLS.” [Asbury Park Press, 11/22/14]
  • New Jersey Only Created 767 Jobs A Month For Most Of 2014. According to the Asbury Park Press, “Taken over a year, New Jersey is creating just 767 jobs a month, the data shows.” [Asbury Park Press, 11/22/14]

During Christie’s First Term, New Jersey Job Growth Was Less Than A Third Of New York’s, And State Median Household Income Declined By 12.2%. According to Bloomberg, “During his inauguration in January 2010, Chris Christie cast New Jersey as a state poised to sprint out of the recession. ‘While the economic hour is dark, there are brighter days ahead,’ the governor said at the Trenton War Memorial across the street from the statehouse. ‘We have the tools to win the battle for a better future.’ By the end of his first term, economic indicators told a story of a state falling behind. Job growth in Christie’s first term was less than a third that of neighboring New York, according to data compiled by Bloomberg. Pennsylvania outstripped the state’s 15 percent expansion in the value of goods and services produced by 4.4 percentage points. Adjusted for inflation, New Jersey’s median household income declined 12.2 percent, compared with a drop of 3.9 percent nationwide.” [Bloomberg, 10/29/14]

High Unemployment

At The End Of 2014, New Jersey’s 6.4% Unemployment Rate Was Higher Than The National Unemployment Rate. According to the Wall Street Journal, “New Jersey’s incentives programs include substantial tax breaks and credits, but also loans. The subsidies flow as the state’s economy has had a hard time gaining traction. New Jersey’s unemployment rate of 6.4% is higher than the national rate, and the state has seen its credit rating drop to the country’s second lowest, next to Illinois, according to Moody’s. The state’s pension and benefits system is about $90 billion underfunded, and Mr. Christie cut promised payments by $2.4 billion over two years last year because of a budget shortfall.” [Wall Street Journal, 1/7/15]

In 2014, New Jersey Was Ranked 34th In Unemployment, The Same Rank As It Was When Christie Was Elected. According to the Asbury Park Press, “As of November, New Jersey’s unemployment rate of 6.4 percent ranked it 34th highest nationally — the same ranking as when Christie took office five years ago. The national rate today is 5.8 percent. Pennsylvania’s is 5.1 percent (19th nationally), New York’s is 5.9 percent (29th) and Delaware’s is 6.0 percent (tied for 30th).” [Asbury Park Press, 1/2/15]

February 2013: New Jersey’s Unemployment Rate Was The Fourth Highest In The Country. According to the Newark Star-Ledger, “In December, New Jersey employers added a record 30,000 jobs, with gains spread across every major industry. Over the last two months, the state has pulled in $100 million more in revenue than Christie predicted, reversing a trend of faltering tax collections in the first five months of the fiscal year, which began July 1. But the state’s unemployment rate remains the fourth-highest in the country, at 9.6 percent.” [Newark Star-Ledger, 2/24/13]

August 2012: New Jersey Had Its Highest Unemployment Rate Since 1977. According to the Gloucester County Times, “New Jersey’s unemployment rate reached new heights last month, climbing to 9.8 percent as the state shed 12,000 jobs, preliminary figures released Thursday by the state Labor Department show. The last time the Garden State jobless rate was higher was in 1977, and New Jersey now trails the U.S. average – 8.3 percent – by the widest margin in three decades. And the unemployment rate, up from 9.6 percent in June, was slightly above the post-recession peak reached in early 2010.” [Gloucester County Times, 8/17/12]

New Jersey Was One Of Just Seven States To Lose Private-Sector Jobs In 2010. According to the Daily Record, “Christie said he backs some of the ideas and might include a few of them in his fiscal 2012 budget proposal next week. But though New Jersey is one of only seven states to have lost private-sector jobs in 2010, the governor said any tax cuts, tax credits and other incentives must be enacted in the context of the budget.” [Daily Record, 2/18/11]

Growing Debt

In July 2014, Christie Had New Jersey Take Out $2.6 Billion Loan In Order To Meet Budgetary Obligations. According to the Star-Ledger, “Crunched for cash, New Jersey officials have taken out a short-term loan of $2.6 billion to pay the first bills coming due in the state budget. Gov. Chris Christie’s new $32.5 billion budget took effect July 1. His administration took out a $2.6 billion loan from J.P. Morgan on the same day as a ‘cash flow facility to help meet the state’s working capital needs,’ according to the state Treasury Department. The need for a ‘bridge loan’ is another sign of how hectic and difficult it can be for governors to manage New Jersey’s budget.” [Star-Ledger, 7/14/14]

New Jersey Debt Reached All-Time High Of $78.4 Billion In 2013. According to Star-Ledger, “New Jersey’s long-term debt rose to a record $78.4 billion in 2013, an increase of $6.6 billion from the previous year and driven mostly by pension and health-benefit costs for public workers, according to an annual report released by the state Treasury on Wednesday. The report was the latest fiscal reality check for Gov. Chris Christie and state lawmakers, coming just days before the Republican governor lays out his new budget plan in a Statehouse speech on Tuesday.” [Star-Ledger, 2/20/14]

  • New Jersey Debt Grew $6.6 Billion In 2013. According to the Star-Ledger, “New Jersey’s long-term debt rose to a record $78.4 billion in 2013, an increase of $6.6 billion from the previous year and driven mostly by pension and health-benefit costs for public workers, according to an annual report released by the state Treasury on Wednesday. The report was the latest fiscal reality check for Gov. Chris Christie and state lawmakers, coming just days before the Republican governor lays out his new budget plan in a Statehouse speech on Tuesday.” [Star-Ledger, 2/20/14]

Missed Revenue Projections

Christie’s Projected Revenue Forecasts For 2014 Fell Short, Because The State’s Growth Rate Was 4.8% Instead Of The Projected 5.2%. According to NJ.com, “New Jersey’s revenue, which last month was on track to meet Gov. Chris Christie’s forecasts, has fallen behind the 5.2 percent growth rate built into this year’s state budget, according to a new report released today. After November tax collections fell behind the governor’s expectations in a number of areas, the growth rate through the first five months of the fiscal year is now 4.8 percent, down from 5.6 percent last month. [NJ.com, 12/12/14]

  • Christie’s Revenue Projections Were $1.6 Billion Short Of The Actual Revenues Collected By The State, Forcing The State To Delay Pension Payments And Take Other Short-Term Measures To Balance The Budget.According to NJ.com, “Only the governor has the authority to certify revenues, and Christie’s forecasts are a source of controversy. If revenues miss the mark, as they have for the past few years, the state doesn’t have enough money to meet its obligations. In the past three years, New Jersey has collected $1.6 billion less than the administration projected, leading the governor to delay pension payments, refinance tobacco bonds and take other measures to plug the gap.” [NJ.com, 12/12/14]

Christie Projected Greater Economic Growth For New Jersey Than Neighboring States In Order To Pay For His 2015 Budget Proposal. According to Bloomberg, “New Jersey Governor Chris Christie, who cut his revenue outlook for the past two years, is relying on a growth forecast more optimistic than those of all but eight U.S. states to pay for his record budget proposal. While the second-term Republican projected a 5.8 percent climb in tax receipts for fiscal 2015, neighboring New York and Pennsylvania see a longer climb out from the 18-month recession that ended in June 2009.” [Bloomberg, 3/18/14]

Christie Overestimated Revenue In The FY2014 Budget; After Predicting A 6.6% Increase, There Was Only A 5.3% Increase. According to Bloomberg, “Revenue has increased every year under Christie, though more slowly than he anticipated. This fiscal year, major revenue sources climbed 5.3 percent through January, short of the 6.6 percent target in Christie’s budget, David Rosen, chief fiscal analyst for the Democratic-controlled legislature, said in a March 4 report.” [Bloomberg, 3/18/14]

Christie’s Budget Projections For December 2013 Were $300 Million Short Of The Actual Revenue Level, Or 3%. According to Bloomberg, “Through December, the most recent month for which Christie’s administration released a revenue report, collections were about 3 percent short of his goal — about $300 million. The shortfall for this fiscal year may be more than $400 million, Rosen estimated. […] Christie cut his 2014 revenue forecast by about $250 million in February. In 2013, his initial $31.9 billion projection fell short by about $500 million.” [Bloomberg, 3/18/14]

Underfunded Pensions

Under Christie, New Jersey’s Pension System Was $90 Billion Underfunded. According to the Wall Street Journal, “New Jersey’s incentives programs include substantial tax breaks and credits, but also loans. The subsidies flow as the state’s economy has had a hard time gaining traction. New Jersey’s unemployment rate of 6.4% is higher than the national rate, and the state has seen its credit rating drop to the country’s second lowest, next to Illinois, according to Moody’s. The state’s pension and benefits system is about $90 billion underfunded, and Mr. Christie cut promised payments by $2.4 billion over two years last year because of a budget shortfall.” [Wall Street Journal, 1/7/15]

In 2014, Christie Cut Promised Pension Payments By $2.4 Billion In Order To Balance The State Budget. According to the Wall Street Journal, “New Jersey’s incentives programs include substantial tax breaks and credits, but also loans. The subsidies flow as the state’s economy has had a hard time gaining traction. New Jersey’s unemployment rate of 6.4% is higher than the national rate, and the state has seen its credit rating drop to the country’s second lowest, next to Illinois, according to Moody’s. The state’s pension and benefits system is about $90 billion underfunded, and Mr. Christie cut promised payments by $2.4 billion over two years last year because of a budget shortfall.” [Wall Street Journal,1/7/15]

  • Christie’s Decision To Cut Pension Contributions Added $2 Billion To Unfunded Liability. According to the New York, “Cutting the pension contributions will add $2 billion to the unfunded liability in the system. And the credit ratings will make it harder for the state to borrow money.” [New York, 5/23/14]

S&P Said That “Regardless Of How The Liability Is Measured, The State’s Record Of Underfunding Its Annual Contributions To The Pension System Is At The Root Of Its Deterioration.” According to Reuters, “‘Regardless of how the liability is measured, the state’s record of underfunding its annual contributions to the pension system is at the root of its deterioration,’ S&P said in statement. ‘The new pension accounting standards shed further light on what we already understood as a problematic feature of New Jersey’s credit profile.’” [Reuters, 11/25/14]

  • Under New Government Accounting Standards Board Calculations, New Jersey’s Pension System Had 44% Funding For FY 2014. According to Reuters, “Under a new pension accounting method, New Jersey’s retirement system for public employees is far more poorly funded than previously measured, the state said in a bond document on Tuesday. New rules issued by the Government Accounting Standards Board put the system’s funding at 44 percent for fiscal 2014, not the 63 percent previously determined by standard actuarial methods. Eighty percent or more is generally considered healthy.” [Reuters, 11/25/14]
#Ethics

Published: Jan 13, 2015

Jump to Content