Politics & Government

FAQ: Gov. Chris Christie's Budget Proposal

A look at the governor's proposed budget.

In his budget address on Tuesday, Gov. Chris Christie outlined a  that is less than last year’s and includes cuts to state agencies, along with an increase in education funding and proposals regarding pension and benefit reform for public employees. To help you better understand the governor’s proposal, Patch has compiled frequently asked questions regarding the governor’s proposal and the process going forward.

Is state aid for education increased?

Christie has proposed an increase in state education aid by a total of $250 million. This is an increase in the total amount for the state’s 600 school districts. Most school districts in the state saw a cut in state aid of between 75-percent and 100-percent in the 2010 budget.

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How much money does this mean for my local school district?

Unsure. The state Department of Education will be releasing state aid numbers for each district on Thursday. These aid calculations are based on the state’s education funding formula. It is unclear how the increase will impact each individual school district.

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What is the impact on state aid to municipal governments?

The governor’s proposal includes holding state aid to municipal governments flat for the next year.

Will the proposal impact local budgets?

Christie said he will be giving municipal governments the same state aid from last year; this should not have a direct impact on local budgets. The impact will be from the 2-percent property tax cap and the other proposals the governor is making.

Does this budget proposal impact charter schools?

Yes. Christie is proposing an increase in funding for charter schools by 50-percent and doubling the amount of money for school choice aid. In addition, he is proposing that each of the state’s 31 public colleges be allowed to authorize charter schools, along with streamlining the process to create new charter schools.

What tax cuts is the governor proposing?

Christie has put forward a series of tax cuts proposals for business taxes, saying these will help create new businesses in New Jersey. This includes doubling the state research and development tax credit, allowing loss-netting and loss carry forward relief being phased in over five years, having a single sales factor, cutting the s-corporation tax by 25-percent and exempting the installation and support of electronically delivered business software from the sales and use tax.

What is loss carry forward?

This is an accounting technique, which applies the current year’s net losses to future years’ profits for tax purposes.

What did the governor propose in terms of public employee pension reform?

Christie said that if the state Legislature passes his pension reform package by the middle of March, he will make a $500 million payment into the state pension fund. This would be the first payment into the pension fund since 2009.

How was the middle of March picked?

Christie was using a statement made by Senate President Steve Sweeney (D-Gloucester County), where Sweeney set a middle of March deadline.

What did Christie propose in terms of public employee health care?

Christie wants state employees to pay 30-percent of their health care costs and the state to cover the remaining 70-percent. In addition, Christie wants to provide more choices to state employees regarding health care, currently three options are available.

How did Christie tie together public employee health care reform and property taxes?

Christie said that if his health care reform package is adopted by the Legislature, the state will be able to afford a doubling of the property tax rebate for seniors and disabled homeowners with incomes up to $150,000, along with doubling property tax relief for all homeowners with incomes up to $75,000.

What is the impact to hospital funding?

Christie’s budget proposal increases this line item by $20 million.

What is the impact on higher education?

State aid to higher education remains the same as last year. There is a $27.3 million increase in financial aid.

Is the budget more or less than last year?

The proposal Christie presented to the Legislature is $29.4 billion, a reduction of 2.6-percent from last year’s state budget. Christie is promoting that he has implemented zero based budgeting as part of the formation of the budget plan.

What is zero based budgeting?

Zero-based budgeting is starting the budget process at zero dollars for each line item instead of at the dollar amount funded in the prior year's budget. Advocates say this allows government leaders to question the need for each program in the budget and how much it needs to be funded. Christie promised zero-based budgeting when he ran for governor in 2009 and it has been a buzz word for fiscal conservatives in the last decade.

What are the specific cuts to department budgets?

The Department of Community Affairs was cut by 1.6-percent, the Department of Agriculture was cut by 1-percent, the Department of Corrections was cut by 2-percent, the Department of Environmental Protection was cut by 10-percent, the Department of Health and Senior Services was cut by 15-percent, the Department of Human Services was cut by 3-percent and the Department of Children and Families was cut by 2-percent.

What did Christie say with terms to other states?

Christie used part of his budget address to tout his record on fiscal issues in his first year in office. He said the proposals he has advocated in New Jersey, including a property tax cap, education reform, pension reform and changes to public employee benefits have been replicated by five new governors who took office in January. The governors he cited included New York Gov. Andrew Cuomo, California Gov. Jerry Brown, Michigan Gov. Rick Snyder, Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich.

What are the next steps in the budget process?

The budget committees in the Assembly and Senate will begin meeting to hold hearings on the governor’s budget proposal. These hearings will be followed by discussion amongst committee members on the budget priorities and changes to the budget. Negotiations are also expected between the legislative leadership and Christie. A budget needs to be adopted by the Legislature and governor by June 30, which is the end of the state fiscal year. If a budget is not adopted by then, state government will shut down, like it did in 2006.

According to published reports, Democratic legislative leaders will be proposing their own budget during the course of the negotiation process. While Democrats carry a majority in both houses of the Legislature, Christie has close alliances with several legislators, which could impact the final passage of a spending plan in the Legislature.

What will happen in the event of a government shut down?

All non-essential state operations will be closed, including benefit offices, motor vehicles offices and state parks and beaches. In a change from the 2006 shutdown, casinos will remain open, due to a state law adopted since 2006 deeming state casino inspectors essential state employees.

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