Volcker slams Christie’s budget record

Former Federal Reserve Chairman Paul Volcker’s budget watchdog group criticized New Jersey Gov. Chris Christie’s budget policies in a new report on Monday.

The Volcker Alliance found that Christie, a likely 2016 GOP presidential candidate, and state lawmakers “rely on short-term maneuvers” in an effort to balance the state budget, “including inconsistent management of revenue collection.”

“New Jersey’s reliance on these measures correlates with the chronic inability of the state to match its revenue streams with its expenses,” according to the report.

Volcker, who served as chairman of the Federal Reserve during the Carter and Reagan administrations, is working to develop a state-budget scorecard. He examined budget policies in California, Virginia and New Jersey.
 
“New Jersey’s performance in annual pension funding is poor compared with other states,” according to the report. “New Jersey’s relatively slow revenue and economic growth have been accompanied by one of the highest tax burdens in the nation, with strong resistance to tax increases.”

A Christie representative couldn’t immediately be reached for comment.

Christie’s supporters argue that he’s been wrangling with a Democratic-controlled Legislature that has stalled his economic agenda during his second term. But his detractors note that credit rating agencies have downgraded the state’s rating nine times since he assumed the governorship in 2010.

Christie has argued that he inherited many of the state’s fiscal problems. And the report noted that the Garden State’s budget policies “under both Republican and Democratic administrations dating back at least to the 1990s have produced repeated structural imbalances and deterioration in fiscal flexibility and credit quality.”

But Christie’s 2014 decision to block the pension-funding schedule “will lead eventually to cuts in existing programs, including education and infrastructure investment, unless new revenue can be raised or pension costs reduced,” according to the report.

The report places responsibility for the state’s budget policies squarely on the New Jersey governor’s office, arguing that, “the budget process is centralized in the governor’s office, and chief executives wield significant power through a constitutional requirement that gives them the job of certifying state revenue.”

Virginia fared the best of the three states in the report, which also characterized California as recovering from its budgetary woes.

“Virginia has a long-standing and well-deserved reputation for strong budget practices that in large part reflects a budgetary process that is more administrative than political,” according to the report. “Once tied with Illinois for America’s lowest state general obligation credit rating, California now stands out as a budget reformer.”