New Jersey Goes to War: America’s Fiscal Future is Now Being Decided in the Garden State by Gregory Hilton

PHOTO: New Jersey has the highest tax burden in the nation, and Gov. Chris Christie (R-NJ) wants to slash the state budget. In response, public employees have declared war on his administration.

While most Americans were enjoying the Memorial Day weekend, the state of New Jersey went to war. President Barbara Keshishian of the New Jersey Education Association (NJEA) declared war on Governor Chris Christie (R-NJ) on behalf of all public employees. The NJEA President is outraged because the Governor has proposed a 2.5% cap on future salary and benefit increases.
In March an NJEA teacher said Christie should die, and Keshishian visited the Governor’s office to apologize. The Governor asked if the teacher had been fired. When Keshishian said no, she was thrown out of Christie’s office. In her war declaration, Keshishian said:

Our war with the Christie Administration is now full-blown. Every NJEA member should now be fully outraged at this governor and his agenda, because it is now an official attack on the very future of public education, and on the careers and livelihoods of each and every one of us.
Gov. Christie is also going after the civil service system, by allowing towns to opt out of civil service protections such as the use of seniority when determining layoffs. This is on top of the proposal to change our tenure system and to basically abolish the seniority system as we know it.

All Americans should be following the fiscal war in New Jersey because it will soon spread to many other states which are also fiscally unsustainable. California and New York are already on the verge of default and they are unable to make the necessary reductions. Difficult decisions were postponed during 2009 because states benefited from the $863 billion federal stimulus. The only way the necessary reductions can be made is by cutting public employee salaries, benefits and pensions.
This is impossible in Democratic states because of the Governors and legislators are dependent on labor unions, and public employees represent a majority of union members. A version of this war will also be fought on the national level because of similar unsustainable policies. This was demonstrated last year when the federal government spent $1.67 for every $1 it collected in taxes.
The New Jersey Governor has been actively using his veto pen since assuming office last January, and unlike his predecessors, he has not been reluctant to make politically unpopular spending cuts. In addition to teachers and other public employees, numerous special interest groups are actively working against Christie’s budget reductions. The Governor says he might not be re-elected in four years, but he wants to fundamentally change the state during the time he does have.
Prior to Christie, New Jersey Democrats had complete control of the governorship and the legislature. During the last eight years alone they increased taxes and fees 115 times. Now the state has the highest tax burden in the nation, but it still does not match its spending.
Last November Christie defeated Gov. Jon Corzine (D) who admitted “reckless borrowing” had taken place. The legislature has always had one answer to fiscal problems, raise taxes, and few legislators were willing to propose politically unpopular cuts.
This is why Christie says “a state of fiscal emergency exists,” which allows him to invoke a state law to impound money appropriated by the legislature. Christie’s action gave him the ability to freeze $2.2 billion in spending which had already been authorized. Democrats are protesting because they claim the Governor is circumventing the budget process, and Christie’s action is now being challenged in the state courts.
MAJOR BATTLES IN THE WAR OF NEW JERSEY

  • Pension reform is essential to Christie’s success, and this will require current and future employees to contribute at least 1.5% to health care costs and it will reduce pension benefits for people hired in the future. The Governor is now holding a series of town hall meetings and his message is that citizens can no longer regard the state as a cash cow.
    Christie has submitted 33 bills to the state legislature which would fundamentally change the state’s fiscal outlook. William Dressel, the executive director of the NJ League of Municipalities, says Christie’s “Salary, benefits and collective bargaining changes, have long been sought by the towns and school boards. This represent a big piece of the puzzle in providing the state with property tax relief. That is unprecedented, and that is huge, given the fiscal realities of the day.”
  • Christie says there is too much government at all levels and many municipalities need to consolidate. He says government officials and administrators can no longer be paid far above the national average. Christie also wants patronage abuse to stop. As an example, Christie said it was outrageous that the executive director of the Passaic Valley Sewerage Commission, Bryan Christiansen, was paid an annual salary of $313,000. Christiansen is a former four term Democratic mayor of Edgewater and agreed to resign.
    The Governor noted the agency “gets its money predominantly from disadvantaged ratepayers,” and it still had 96 people on its payroll who make over $100,000. They also spent $536,000 to lobby the state legislature for increased benefits. The Sewerage Commission is also an example of a government body which operates in secret, and Christie is threatening a state takeover.
  • The Governor also wants to force NJ Transit to be more efficient, and is cutting $32.7 million from the $296 million subsidy it now provides. The Governor says the agency must revisit its “rich union contracts” and end “the patronage hiring that has typified its past.” NJ Transit will not budge on the union contracts and the agency says the only option is to reduce services or to increase fares. When the transit system was privately run it was far less expensive to operate. This was also true of the Metropolitan Transit Authority (MTA) in New York City. For example, for 35 years NYC’s IRT cost just a nickel a ride.
  • As previously indicated, another Christie target is the New Jersey Education Association. The Governor has cut state aid to education by $475 million, and is proposing another $1 billion in reductions. Christie says “I’m a product of public schools in New Jersey, and I have great admiration for people who commit their lives to teaching, but this isn’t about them. This is about a union president who makes $265,000 a year, and her executive director who makes $550,000 a year. This is about a union that has been used to getting its way every time. And they have intimidated governors for the last 30 years.” The teachers now receive full medical, dental and vision care for themselves and their families at no expense. Federal employees have to pay 25% of those costs, but the teachers will not compromise.
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