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Christie Delivers N.J. Budget Address Amid Fiscal Challenges


New Jersey has some fiscal problems, and they threaten Governor Chris Christie's image as a reformer who saved his state's economy. Christie delivered his annual budget address today at the New Jersey Statehouse, but the speech had national implications, too, given Christie's expected run for the Republican nomination for president. Joining us to talk about all of this is Matt Katz, who covers the governor, from member station WNYC. Hi, Matt.


SIEGEL: Christie's been in office for five years. What is his economic record?

KATZ: The governor has taken credit for private-sector job growth and a dramatic spike in tax incentives to lure businesses. The unemployment rate, though, continues to be higher than the national average. Conservatives say they like how he's repeatedly vetoed attempts by the Democrats in legislature to get him to raise income taxes on the wealthy. But the problem is the loss of that revenue has posed problems for the public employee pension system. He hasn't made the full required payments into the pension system, and that's one of the reasons why there have been eight credit rating downgrades since he's been in office. Those are the kinds of stats that could be used like a cudgel against him by Republican opponents in a presidential primary if he chooses to run.

SIEGEL: Yeah. Yesterday, though, a New Jersey judge ruled that Governor Christie must increase his payments into the pension system by billions of dollars. How big a problem is that for him?

KATZ: It's huge. Christie is appealing the decision, but if he's forced to make billions more in pension payments, that would really just explode his current proposed budget, and it would force deep cuts in education and other items. And, politically speaking, he's told us that this was fixed as of 2011. Cutting pension and health benefits for hundreds of thousands of teachers and cops and public workers - this was his biggest accomplishment from his term in office. He had convinced the Democratic legislature to agree to this and in exchange he was going to make mandated payments into the system.

He was going to run for president on this - on how he had reformed a bankrupt entitlement system by working in a bipartisan fashion. It was his model for tackling Social Security, for example, on the national level, but now you have this judge saying he violated his own reform law by underfunding the pension system three years in a row now. And in his budget address today, Christie said his 2011 reforms worked, but that he still - and that he's still paying more into the system than any other governor before him. But, you know, he is most definitely not kicking the problem down the road. That was the argument he was trying to make.


GOVERNOR CHRIS CHRISTIE: So I don't come here today just to identify the problem, shrug my shoulders and then have us all return to business as usual. That's not what leadership is. There are solutions to this problem and my work in this regard began months ago.

SIEGEL: Well, let's assume, Matt, given Christie's record, that the solution won't be raising taxes. Did he offer a plan to solve the problem?

KATZ: This is where it gets interesting. He said he had a signed, quote, "roadmap of agreement" with the largest teachers union in the state. Now, the teachers union used to be his archenemy. He became a conservative icon in the country in his first term by attacking union leaders as corrupt and money grubbers and arguing with public school teachers at town hall meetings. And given the fact that his rival in the Republican field right now for the presidency - Wisconsin Governor Scott Walker - has also made his name by going after public employee unions, this today was very interesting to watch Christie talk about working cooperatively with this union. But there's scant details about what this possible deal is exactly, and the unions were much less optimistic today that there even will be a deal. But if there was it would involve the unions taking control over their own pension plans, and Christie is now already describing this as a national model for going forward. And if it could help possibly solve one of New Jersey's biggest problems, and if that happened right before the 2016 presidential primaries, it would be a huge coup for the governor.

SIEGEL: All right, that's WNYC's Matt Katz on the state budget problems facing New Jersey Governor Chris Christie. Matt, thanks.

KATZ: Thanks, Robert. Transcript provided by NPR, Copyright NPR.

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