By Dan Aubrey
New Jersey Governor Chris Christie’s presidential leap into the national spotlight has also put light on something he would probably want to keep in the dark — his record in New Jersey.
Since the beginning of the year, Christie has been talking about how he would manage the nation. Meanwhile national media reporters have taken a cue from Christie’s “Tell It Like It is” campaign to do just that: tell about what Christie has been doing for and with the state that elected him its leader.
Take the August article “Chris Christie’s Tunnel Tango.” That’s where the Pulitzer Prize winning nonprofit and independent investigative news group ProPublica asked, “What happened to the money after the New Jersey governor killed a new commuter rail tunnel five years ago?”
Christie claimed he stopped the $8.7 billion New Jersey to New York project in 2010 because of the cost to taxpayers. But ProPublica says the governor made it “the biggest one-time fix” of his administration and diverted $3 billion of highway toll increases and Port Authority money originally earmarked for the tunnel to bail out New Jersey’s finances.
ProPublica says the “decision, which boosted (Christie) to national prominence, was a major bragging point for years. But now he’s playing tunnel defense rather than his customary offense amid a torrent of terrible tunnel news: lengthy delays in the century-old rail tunnel; jockeying among New Jersey, New York, and Amtrak over how to pay for a new $14 billion tunnel; and warnings of chronic failures and shutdowns if something isn’t done soon to add rail capacity.”
The article adds that while one of the two rail tubes — built when Theodore Roosevelt was president — has to be shut down for repairs, causing more problems for 87,000 commuters and East Coast rail transportation, there is a silver lining for one party: the “governor saw an upside: By redirecting funds for the tunnel to repair the Pulaski Skyway, he kept a campaign pledge and avoided raising taxes for highway repairs.”
Although the jury is still out whether the transferring of funds designated for a Port Authority project to a New Jersey highway project is legal, the governor’s move attracted further scrutiny — as in this past spring’s ProPublica and Washington Post investigative report: “Chris Christie’s Budget ‘Sins.”
The article outlined the usual list of current and deferred woes: Underfunding pensions (with funds forecasted to be depleted in 2032), bond premiums (short term borrowing fixes that use above-market interest rates to provide cash today), delaying property tax rebates (in the most highly taxed state in the nation), lottery outsourcing (with diminished returns), legal settlements (settling a pollution lawsuit against ExxonMobil for $225 million versus the $8.9 billion the state sued for), and more.
Although the report shows that all governors from Whitman skipped pension payments and many delayed inevitable costs by one-time deals, it points to Christie as the sole source of the revenue losing lottery and legal settlement actions.
A ProPublica and Post companion piece, “Behind Christie’s Budget Claims, a More Controversial Legacy,” says since 2010 — when “New Jersey was a basket case” and the governor had to overcome a multibillion-dollar deficit left by Corzine — Christie has seen the nation’s three biggest rating agencies downgrade New Jersey’s credit a total of nine times on his watch” — according to Bloomberg Business “a record for a governor of the state.”
CNN Money also picked up on state finances and said in June, “Gov. Christie likes to champion his business credentials, but New Jersey is frequently ranked as one of the worst states in the country for doing business, according to surveys of CEOs and the Tax Foundation. Overall economic growth has been lackluster — the state ranked 46th for growth in 2014. Since the recession, poverty is up, the state’s revenues are down, and the New Jersey’s unemployment rate remains well above the national average.”
After acknowledging a state economy dependent on the financial services industry yet weakened by the 2008 recession, Superstorm Sandy, and Atlantic City’s financial problems, CNN asks, “What did Gov. Christie do to try to jumpstart growth?” and replies, “He has reduced government spending, especially for higher education and some social programs, in order to not raise taxes. This year he went a step further and proposed cutting income and corporate tax rates in New Jersey.”
Yet the reductions in spending do not translate to an increase in savings. As an International Business Times writer noted early in 2015, “Under Chris Christie, the New Jersey pension system paid more than $600 million in fees to financial firms in 2014 — 50 percent more than a year ago, and a higher rate than almost any other state reports paying for pension management. The figures are buried within an otherwise routine annual report that appeared to change the way the fees were counted to make them look smaller than they actually are. That accounting change comes at a time when the Christie administration is under scrutiny for investing pension money in high-fee firms whose executives made campaign contributions to Republican political groups.”
Although the higher fees were supposed to buy higher returns than from low-fee stock and bond index funds, the yields “have trailed the median for similarly sized pension funds. The state’s high-fee alternative investment portfolio has also lagged behind the S&P 500.”
Fox Business News also reported on the looming state financial problems and also focused on public pensions. As Elizabeth MacDonald writes in February’s “Chris Christie’s Biggest Problem,” “New Jersey’s unfunded pension liability stands at about $37 billion, the fourth-highest in the nation. Under new accounting rules the liability nearly triples to $83 billion for pensions,” asking and answering: “Who gets stuck with that bill? Taxpayers.”
In late June the New York Times reported New Jersey’s Transportation Trust Fund “is about to go broke” and quoted New Jersey’s transportation commissioner as saying the state’s road and bridges are “old, crumbling and getting worse every day.”
The article added that New Jersey is confronting “a transportation funding crisis with no easy way out. Voters are so fed up, support is growing for a revenue option long viewed as politically untenable: raising the state’s gas tax.”
Yet a recent Christie Tracker — WNYC’s ongoing radio reports by veteran investigator Matt Katz — reports Christie just made an anti-tax pledge to the conservative Americans for Tax Reform group, a move that “could complicate efforts by New Jersey legislators to save the nearly bankrupt Transportation Trust Fund, which pays for road and bridge repairs in the state. The fund is paid for by the gasoline tax, which is the second lowest in the nation. Christie’s own allies — including the head of the state Chamber of Commerce and his transportation commissioner — have indicated support for increasing the state gas tax to replenish the trust fund.”
The national media spotlight on state finances and growing problems helps reporters tell it like it is to those not seeing the growing economic problems unfold in the Garden State. And it puts a light on the reason why — when Christie takes to the highway to get out of state votes — many New Jerseyans are wishing that he would just “hit the road.”
Although New Jersey taxpayers may be able to shrug off the abstractions of larger-than-planned pension problems and lower-than-anticipated state revenues, no one will escape the state;;s collision course eyes with an decaying infrastructure of state roads, bridges, and rail systems.
