Bill Holland / Christie's budgets have held back the N.J. economy - pressofAtlanticCity.com: Commentary

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Bill Holland / Christie's budgets have held back the N.J. economy

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Posted: Monday, February 25, 2013 12:01 am

Bill Holland / Christie's budgets have held back the N.J. economy

On Tuesday, Gov. Chris Christie will give the fourth and final budget address of his term, but it might as well be his first. After three years of Christie's policies, the state still faces the same problems: a struggling economy that has left nearly 10 percent of working families searching for work without success.

Tax revenues - which are up in good times and down in bad times - have fallen short of the governor's projections. New Jersey faces a $426 million shortfall for the current budget, and nonpartisan experts expect that shortfall to grow to as much as $2 billion in the coming year. Meanwhile, the state unemployment rate is exactly where it was when Christie took office - 9.6 percent. The rest of the country is bouncing back from the 2007 economic crisis, but we're stuck in a rut.

Christie can take much of the credit for this lackluster economic record. His jobs plan, such as it was, blew a hole in the budget by lowering taxes for the rich by roughly $1 billion when he refused to renew an income-tax surcharge on the wealthy. Cutting taxes for corporations created a $660 million hole. And that's not even mentioning the more than $2 billion in incentives he's doled out like candy on Halloween to corporations like Citigroup, Prudential, Panasonic, and the developers of the Revel casino. Just last year he projected rosy revenue numbers to promote another $1 billion tax cut that would have given 40 percent of its benefit to the top 1 percent of New Jerseyans.

Meanwhile, our neighbor New York now employs more workers than it did before the economic crisis. Pennsylvania has restored 75 percent of its lost jobs. By comparison we've only recovered 35 percent of our lost jobs. Currently New Jersey ranks a dismal 47th in economic growth.

Christie was warned. More than 40 economists went on record to say that during a recession it's actually preferable to raise taxes on the wealthy in order to avoid budget cuts that might further weaken the economy. That's because the wealthy tend to save their windfalls rather than go out into the economy and spend it, whereas every dollar spent on essential services creates a ripple-effect in the private sector. Those warnings have been borne out. New Jersey Policy Perspective found that if not for Christie's budget cuts, New Jersey's 2011 unemployment rate would have been a full percent lower - 8 percent instead of 9.3 percent.

Even worse, much of what Christie cut over the last three years to pay for his tax cuts for the rich might have actually helped create jobs.

He slashed higher education by 7 percent after promising to increase its funding in his first term. He cut affordable after-school care programs that allowed the parents of 15,000 kids to hold full time jobs. He cut pro-employment programs like the Earned Income Tax Credit and vetoed job-creating policies like a minimum wage increase. Meanwhile, the governor's education cuts have undermined one of New Jersey's key selling points to businesses looking to relocate - its excellent school system.

We can't afford to have another budget like the last three. Christie's plans of corporate giveaways and tax cuts for the rich haven't delivered the results. It's time to restore taxes for the top 1percent, end corporate tax cuts and loopholes and use those funds to help us make the investments critical to putting people back to work and creating a recovery 100 percent of New Jersey's residents can share in.

Bill Holland is the executive director of the New Jersey Working Families Alliance and a coordinator of the Better Choices for New Jersey campaign.

Posted in on Monday, February 25, 2013 12:01 am.

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