Reviewing budget address 2012: Tax cut stalled; drug courts, education reform progressed

TRENTON – Higher-ed reform, check. Drug courts, check. Tax cut, not so fast.

When Gov. Chris Christie takes to the podium Tuesday afternoon to give the annual budget address, he will be able to take credit for following through on some of the goals he outlined in last year’s speech.

While his biggest goal – a 10 percent income tax cut – went nowhere, he did see fulfilled several of the other initiatives he unveiled last February.

He sought to have some key education reforms put into place, including tenure reform and merit pay.

“We need to reform tenure.  We need to pay the best teachers more. We need to expand charter schools in our failing school districts,” he said last year.

Christie got that wish fulfilled just six months later.

“This is a historic day for New Jersey and this new tenure law is an important step towards ensuring we have a great teacher in every classroom. After more than 100 years in existence, this Administration, Legislature and key reformers have done together what many considered to be impossible,” he said at the bill signing on Aug. 6 in South Plainfield.

Christie also sought a restructuring of the higher education system that would create powerful universities in South and Central Jersey, with an emphasis on medical education.

“We can usher in a new era for medical education throughout the state,” Christie said in the 2012 address. “And we can make sure that New Jersey secures its rightful place as the national leader in medical education and biomedical research. Let’s implement that plan.”

Some six months later, and just a couple of weeks after signing the tenure reform bill, Christie made waves by enacting his higher education plan.  

“This is a transformative and historic day for higher education in New Jersey,” Christie said at the bill signing on Aug. 22. “After decades of politics getting in the way of a desperately needed rethinking and restructuring of our higher education system, we have again come together in a bipartisan way to put our state’s students, our long-term economic viability and our future generations first.”

The higher-ed restructuring did not occur without controversy, as Rutgers-Camden supporters repeatedly criticized the plan to merge with Rowan University. They feared loss of identity and clout, but after months of wrangling, a plan became reality.

And his goal of giving nonviolent drug offenders a chance at getting back on the straight path received widespread bipartisan support as the Legislature passed, and he signed into law, the drug courts bill.

The goal eventually is to have a drug court in all 21 counties that would help eligible offenders avoid lengthy, expensive jail terms that drain limited resources and instead put them on a path toward rehabilitation.

However …

While those were some of the accomplishments, there remain some unfulfilled goals.

For one, the tenure reform bill, and its support from the largest teachers union, came at a price, since it kept in place seniority rights.

Christie’s close friend, Sen. Joe Kyrillos, (R-11), Middletown, introduced legislation shortly after the bill signing that would discard the last-in-first-out provision (LIFO), saying that the current system “forces schools to ignore educator effectiveness and lay off high-performing younger teachers, instead of more expensive, ineffective ones.” However, that bill has gone nowhere.

But probably more concerning is the relatively tepid growth in jobs, revenues, and the overall economy. The unemployment rate has remained stubbornly high, and it actually increased from a year ago.

Last year, the governor said, “In these last two years, we have begun to move our unemployment rate in the right direction, down from 10.1 percent, when I was sworn in, to 9 percent today.”

But the joblessness rate from a year ago has remained in the high-9 percentile. According to the January report the jobless rate was 9.6 percent, even after some 30,000 jobs were created, the highest single-month job growth in more than 20 years.  

Christie has expressed frustration with the way the unemployment rate is calculated, and so he has focused more on the number of actual jobs created. By that measure, the administration looks better.

In last year’s budget address, Christie made a statement that may leave some scratching their heads.

“We also have avoided overly optimistic assumptions about revenue,” he said. “These will only get us in trouble in the future.”

The Office of Legislative Services said last week that revenue would have to grow some 13 percent by the end of the fiscal year to keep pace with the projections made last year.

“The evidence clearly shows the growth was overly optimistic,” said David Redlawsk, a political science professor at Rutgers University who is also the director of the Rutgers-Eagleton poll.

The linchpin of Christie’s economic growth plan that he announced last year  – the 10 percent, across-the-board income tax cut – went nowhere. Some of that could be attributed the less-than-expected revenue growth from income, business and sales taxes.

Plus, Democrats initially countered with tax cut proposals of their own, while constantly stating any tax cut would have to be put off until revenues became clear. And as the revenue picture did become clear, the prospects of any tax cut dimmed.

And another reason could be the state will need more funds to help in the post-Sandy rebuilding.

“We’re encountering many of the same problems,” Redlawsk said. “These are very difficult challenges.”

Redlawsk said he’s optimistic that the national economic growth, assuming the country avoids sequestration, will improve in the coming year, which could bode well for New Jersey.

 

Reviewing budget address 2012: Tax cut stalled; drug courts, education reform progressed