PS427: New Jersey Budget, Christie vs Dems

The New Jersey budget faced an $11 billion shortfall. Newly elected governor Chris Christie drew attention by taking on state employee unions, especially teachers, and pushed throw a budget with major cuts, numerous fee increases, and elimination of tax-rebates. Republicans are looking at Christie as a model for budget cutting while maintaining popular support. Dems are concerned.

This is a striking contrast with the situation in Illinois where little progress seems to be at hand in dealing with state bills that can't be paid. Or in California which as of today (July 4) still lacks a state budget.

Here are a series of excellent articles covering the NJ budget process and the current "near-deal" on limiting property tax increases, which may or may not be a done deal (see reservations by the assembly speaker.)

This is a GREAT overview of the entire budget process and negotiations. Bravo to reporters Claire Heininger and Josh Margolin for an article that covers the complexity so well.

Here is the article on the budget passing. Note the chart on where the money comes from and where it goes. I wish it were a little more detailed, especially on what state agencies spend what but otherwise useful information.

This is a piece that puts Christie's budget in the perspective of what previous governors did to bring the state to its current situation.

And here is where the property tax issue stands today, with an agreement in the senate and some uncertainty in the assembly.

Not all are happy, and here is a piece on groups opposing the budget deal.

Some earlier coverage in the run-up to the budget include:

State worker protests. (Note the likely cuts to state worker benefits in Wisconsin as well. Pensions and benefits are inviting targets. (Why?)  And not just for Reps. Gov. Doyle recommended more or less the same increase in state worker contributions to retirement funds last year that GOPer Scott Walker now supports.)

Universities and colleges take $173M in cuts, plan tuition hikes.  In what ways is that a good thing and a bad thing? Discuss.

Christie fighting with teachers unions.

Oh my! Christie urges towns to reject school budgets without a wage freeze!

Subsequently, 53% of such budgets are rejected. Quite an impressive show of support for the Governor's position. Quite a lack of success for the teachers unions.

Here is a comical attempt to spin the results in favor of the teachers unions.

And here is a good non-partisan overview of Christie's conflict with the teachers and the subsequent votes.


Wow. I could go on and on. The Newark Star Ledger deserves huge praise for their detailed coverage and for a page offering the entire chronology. I wish Wisconsin papers would follow their lead in coverage and organization of that coverage on their web pages. This is a model of good work.

Here is the Star-Ledger's overview page.

Read JUST THE HEADLINES on the overview page. Read from bottom to top so you see it in chronological order. Make note of the issues, areas of cuts and revenue increases, and ESPECIALLY how each interest group howls in protest when their ox is gored. Note also in the budget article above how Republican legislators are very troubled about voting for cuts to THEIR suburban school districts. Concern for YOUR ox is bi-partisan indeed.

This is textbook stuff about budget making. The most amazing part is how Christie marshaled the political skill to get the budget through the legislature, where Democrats control both houses, and how he had to struggle to maintain GOP unanimity of support for his plan.

I don't have a dog in this fight. There are good arguments on both sides of budget debates. But as just plain fascinating politics, this case in New Jersey deserves to be widely studied.

Up Front: Closed Meeting Budget

The budget was passed by both houses after extended private negotiations among the leadership and individual members. In this segment of Up Front, Jay Heck, executive director for Common Cause Wisconsin, complains about the lack of openness and transparency in this process. See the video here.

I expect many legislators would argue that open meetings stifle the negotiation necessary to reach agreement on complex issues, such as the budget. Legislators need to give as well as get and public meetings make that difficult. The result might well be stalemate rather than transparency.

Others, such as Common Cause, would say that is exactly the problem. The private deals are not defensible on their own merits, and so can only be agreed too when the public is banned from watching. Or to put a conservative spin on it, the growth of government comes from the unwillingness of legislators to ever give up "goodies" and both earmarks and protected programs are the consequence. This holds whichever party is in control because the constituent pressures are so strong when it comes to local benefits.

My question: would "real" open meetings resolve anything? Would private deals just move to other venues (cell phone calls?). Are private goods given to individual legislators the necessary lubricant for legislation? And consider the alternative: Could a member of the Wisconsin legislature win election and reelection by consistently refusing to deal for projects or policies that are particularly beneficial to their districts? Should they try?

States Turning to Last Resorts in Budget Crisis - NYTimes.com

States Turning to Last Resorts in Budget Crisis - NYTimes.com

Not news to anyone here, but the discussion (and the chart) of how states are coping with their budget problems is very interesting.

As I asked in an earlier post, how might we account for the variation in approaches to the budget crisis? The chart shows how many states have tried different things, but obviously there is a lot of variation. Why?

And a second question, which states have been hardest hit and which have escaped relatively lightly. Why the variation? Is it all economic or are there political differences across the states that also affect how states have been affected?

Up Front on the State Budget

The June 14th show featured a discussion of the budget with a variety of perspectives. Worth watching here.

How can the state raise sufficient revenue to pay for services while not discouraging business investment in the state or individual incentives? Do policies that encourage businesses benefit the citizens generally or do they provide private gains primarily to company owners? Should the state subsidize business in either case?

The left argues that state services must protect the needy and provide valuable public goods, such as health care, education and environmental protection. How can the left provide revenue for such policies when the growth in costs outstrip the growth in revenue sources? Is it possible to base taxes on out of state interests (e.g. gas companies) to shield state taxpayers? Or can minority interests (e.g. smokers, who make up only 22% of Wisconsin citizens) be taxed at high rates while majority interests (e.g. sales or general income taxes) are shielded?

"Interest Groups" dominate lobbying at the capital. The also provide the bulk of campaign contributions. There is much talk of limiting that influence by public financing of elections. But these groups also represent crucially important constituencies in the state-- teachers, manufacturers, construction companies, agriculture, taverns (<;-) ). When is an interest group a "special" interest, and when does it represent a critical component of the state's economy and population which deserves to influence legislation? How would state government look if legislators were free to ignore all interest group activity? Would representative government be better, worse, or essentially the same?

Democrats in Legislature split over capital gains tax break - JSOnline

Democrats in Legislature split over capital gains tax break - JSOnline

This split between the gas tax versus capital gains is quite interesting. The current split is between Democrats, rather than between the parties. Why?

What are these revenues for? Are they targeted to fund particular functions? Which?

What policy change was adopted several years ago that helped create the problem with funding this function?

How should particular functions be funded? Should the revenue be directly linked to the function or should all functions be paid for from the entire revenue pool?

Compare this with the traditional use of property taxes for K-12 education. How has education funding evolved over time? With what conseqences?

State budget deal bought with earmarks - JSOnline

State budget deal bought with earmarks - JSOnline

"Earmarks" have become a favorite topic of attack in DC and perhaps at home too. Why is that? Consider first why earmarks are so important to individual legislators. Consider second why legislators think attacking earmarks is good politics in light of your first consideration.

Recession pounds states' budgets

Recession pounds states' budgets

Not that this is news to anyone, but here is a round up of the situation in the states.

See also the details offered here:



How does Wisconsin compare?

Do any common trends emerge across states? If so what? If not, why are states adopting different approaches?