Christie Lays Out Budget, Pension, and Education Reform in State of the State

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On Tuesday afternoon, beginning his second year in office, New Jersey Governor Chris Christie gave his first State of the State address.

Expectations are high for Christie, whose name has already been kicked around as a potential 2012 presidential candidate. New Jersey was in dire straits when the new governor took office last year, with a fleeing population due in part to what some analysts have concluded is the highest tax burden in the nation and a projected $11 billion budget deficit in 2011. Christie began his speech by touting the steps he's taken to control spending, close the budget gap, and reform the state's pension and unemployment insurance system, avoiding tax increases all the while. 

"We are turning our state around," he said. "Make no mistake: New Jersey is coming back."

But Christie was adamant that the comeback is not complete. Over and over, Christie hammered the point that there is work to be done, and that reform cannot wait any longer. That means making tough, unpopular choices, he said. "The right answer is to face big problems now, or face bigger ones tomorrow," Christie told his audience. "I believe in a culture of truth, and it hasn't always been easy, because some of those truths in front of us weren't pleasant...What is at stake is no less than the future of New Jersey."

First on Christie's docket was the budget. New Jersey may have closed that $11 billion gap for the current fiscal year, but the state's gross debt continues to rise at a rapid clip. "The long-term deficit problem is far from solved," Christie said. "It took decades to build it up, so it cannot be solved in a year."

Next month, Christie will present his budget for the next fiscal year. He made this promise in his State of the State address: "It will be balanced, and it will not raise taxes."

Like New York Governor Andrew Cuomo, Christie wants to keep taxes where they are—and hopefully roll them back in the not-too-distant future—and use spending cuts to tackle his state's budget woes. When those woes are as bad as New Jersey's, Christie said, it means we need cut deep, but not arbitrarily.

"I am not proposing to cut spending just for cutting’s sake," he said. "I am fighting this fight because we have to be truthful about what we can’t afford—whether it is health and pension benefits which are out of line with the rest of the country, or a tunnel which we can’t pay for. I am asking for shared sacrifice so that when we leave here, New Jersey will be more fiscally sound than when we got here. I am asking for shared sacrifice in cutting what we don’t need so that we can invest in what we absolutely do need."

Christie may want to freeze and eventually lower taxes, but he was insistent that even those popular conservative measures wouldn't be considered unless the state found a way to pay for them. "Let's be clear," he said. "We will not put in place tax cuts that we can’t pay for. Any economic incentive package that I will sign will be enacted in the context, and only in the context, of a balanced budget."

Second on Christie's agenda will be reforming the pension system for state employees. Among his proposals are increasing the state retirement age from 62 to 65 and "modest" pension contributions from employees, which he didn't elaborate on. Instead, Christie emphasized the pension system's bottom line. "Benefits are too rich, contributions too small, and the system is on a path to bankruptcy," he said.

Recognizing that his proposals won't be met favorably by state employees, Christie reiterated the need to make sacrifices and difficult choices for the sake of the system. "To every beneficiary of the system," Christie said, "I am fighting for your pension's existence."

Lastly, but most importantly, Christie said, was education reform. He pointed to the failure of public institutions and the success of the charter school program as harbingers of what's to come. "We must give parents and children a choice to attend better schools," Christie said. He went on to call the performance of New Jersey's public education system "obscene." Expanding the charter school program will be a top priority for the governor, who also called on legislators to pass the Opportunity Scholarship Act immediately.

Christie's plans for education reform include cutting costs, giving merit-based rewards to teachers, basing any necessary layoffs on merit, improving teacher evaluation, and giving schools more power to remove underperforming teachers. "Teaching can no longer be the only profession where you have no rewards for excellence and no consequences for failure," Christie said. "The time to eliminate teacher tenure is now."

Throughout the speech, Christie framed his proposed reforms and spending cuts with the forceful, bullish style he's become known for. "We know that the path of change is better than the path of stagnation that we were on," he said. "I was determined when I took the oath of this office to give the people an honest assessment of our problems. To tell them the truth, even if it was difficult and my proposed solutions were unpopular. And to this day, I ask that I be measured by that standard—I will always do what I said I was going to do. I may not offer the easiest course, but I will be direct in saying which course I believe to be the best."