It's hardly surprising that a State of the State address would be filled with rhetorical flourishes and enough political spin to convince the audience of the current administration's great accomplishments of the previous year. So, too, are such speeches peppered with facts that are meant to lend greater credibility to the rhetoric. Governor Christie's 45-minutes assessment earlier this week of his first year in office made several statements of fact that merit a more thorough consideration.
"State spending is down 9% in one year."
State appropriations for the current budget year, which runs through June, total $29.2 billion. That's 8.6 percent less than the $32.1 million appropriated for FY2010. The governor rounded up to 9 percent. Those figures include one-time federal stimulus grants, too. Without them, the difference is 5.5 percent.
But that's not an actual accounting of the expenditure of state tax dollars. The $32.1 million appropriated for FY2010 is what was anticipated when the Legislature passed the budget prior to the beginning of the fiscal year, not what was actually spent. After mid-year adjustments to account for a continued decline of revenues because of the national recession, the state spent $28.2 million in FY2010, according to the state's Comprehensive Annual Financial Report. Even adding in federal stimulus, state spending essentially remained flat.
Republicans argue that such a calculation doesn't take into account the cuts Christie made after taking office. Democrats would argue that the cuts were not cuts, but the transfer of education and energy funds to provide millionaires and corporations with a tax break.
"The unemployment rate has begun to drop — and today is below, not above, the national average. ... Unemployment was at 10% — the highest in a generation, the highest in the region, and above the national average."
New Jersey's unemployment rate crested in December 2010 at 10.0 percent, putting it for the first time a tick above the national rate, which was 9.9 percent that same month. It would have stayed below 10 percent had the administration not adjusted the original job loss figures for December downward by 1,100 jobs when it issued its first report on January 20, 2010. The unemployment rate also exceeded the national average by 1/10 of one percent in January and February, too. Since March is has been slightly below the national average.
"We faced a deficit for FY ‘11 that was projected to be $11 billion — equal to 37% of the budget — the largest deficit, in proportional terms, in the country. ... We passed an FY ‘11 budget which restored some sense of fiscal sanity — it required spending cuts from every department of state government — but we closed that $11 billion budget gap — without raising taxes."
The Christie Administration closed a $10.7 billion "structural gap," not an actual budget deficit. The structural gap is a projection of what the state would have spent if it fully funded every legislative obligation (a situation that never happens). For example, the state owed $3.1 billion to the state pension system. That payment wasn't made because the budget language was changed to avoid any obligation to make the payment, and under the state constitution budget language over-rides statute. Further, any closing of the gap done by the administration appears to be temporary. The nonpartisan Office of Legislative Services estimates that the budget gap for FY2012 will near or exceed the $10.7 billion gap in FY2011.
"Independent analysts concluded we had the highest overall tax burden in America."
The "independent" analysis was undertaken by the national Tax Foundation, well-known for its conservative, anti-tax policy advocacy. A report this year by NJPP however found that New Jersey's tax burden ranks 23rd among states when taxes are considered as a percentage of personal income. It is an important adjustment that ought to be made when comparing a high-income state like New Jersey against other, lower income states like Mississippi or Wyoming.
"Wealth, and jobs, and people were leaving our State"
New Jersey has the highest median income of any state except Connecticut, according to the U.S. Census. Census data also shows there are more millionaires in New Jersey than all but two states, a distinction New Jersey has held for the past three years. The number of state income tax filers with income of $500,000 or more jumped to 46,756 in 2008, up from 27,392 in 1999 (a 71 percent increase), according to the state Department of Revenue. The state's total population continues to grow, even as Census figures show an outmigration of about 20,000 residents a year to other states, including retirees who move to southern states.
"Overall, statewide per pupil spending in New Jersey is the highest in the nation, at over $17,600 per student."
A precise figure for per pupil spending in New Jersey has proven elusive. The state Department of Education, a part of the Christie Administration, put the average per pupil cost at $13,860 in 2009-10. The U.S. Census reported that New Jersey spent $18,467 a year per pupil in 2007-08, the most recent year for which comparisons are available. It ranked New Jersey fourth among states, behind Washington, D.C., New York and Wyoming. Christie relied on the National Center on Education Statistics, in the U.S. Department of Education, for his figure of $17,600 (which is from a 2007-08 report and is the latest available). The Census data and the NCES data both showed that the state contributed less than 42 percent to the per pupil cost of education in 2007-08, among the lowest shares in the nation (the average was 48.5 percent) according to NCES.
"But our results in terms of (education) achievement are not number one, and they are not uniformly excellent or even acceptable."
New Jersey ranked among the top tier of states in the annual 50-state survey released by Education Week on Tuesday, just before the governor's address. The survey, "Quality Counts 2011," evaluates and ranks the states on key education indicators, including achievement results, school finance, and other factors critical to student success. New Jersey ranked second to Massachusetts on achievement, and in the top five for equitable school funding.
Deborah Howlett is the president of New Jersey Policy Perspective