Christie: Downgrades “a great referendum on my fiscal policies”

When Chris Christie came into office in 2010 New Jersey’s bond ratings were AA with Fitch, AA2 with Moody’s and AA with S&P (the third highest for all three agencies and, as best I can tell, the same ratings New Jersey long-term bonds had since the last round of McGreevey downgrades in 2002).

That same year of 2010 New Jersey municipalities led the nation in bond-rating downgrades and, according to one story, Christie could not have been more pleased:

“It’s a great referendum on my fiscal policies,” Christie, 48, said of the downgrades on Dec. 16. “It says that we’re getting our fiscal house in order. When other states get their houses in order, they will see the downgrades too.”

………..

In New Jersey, Christie has “cut back a lot to balance the budget, and one of the biggest items in those cutbacks is aid to municipalities,” Alan Schankel, director of fixed-income research at Janney Montgomery Scott LLC, a Philadelphia-based broker, said in an interview.

“They’re downstreaming the deficit,” Schankel said. “The state starts out with a deficit; they close it and cut back in a lot of areas, but the biggest impact is on municipalities.”

…………

Speaking to reporters in Trenton on Dec. 16, Christie said the downgrades are because the state is righting its finances after a decade of consecutive deficits. Balancing the state budget will be even tougher next year, he said, declining to say whether he would cut municipal aid further.

New Jersey bond ratings under Christie have been downgraded a record seven times primarily because of pension and OPEB issues that are now in the hands of a pension study panel formed 39 days ago that was supposed to present their recommendations by day 30. How’s that for a referendum?

10 responses to this post.

  1. Posted by RealRep on September 9, 2014 at 6:30 pm

    State aid is an oxymoron. The local taxpayer is the only thing propping up the state. When the state income tax was instituted in 1975 one of the caveats was the state would take over the funding of the teachers pension from the municipalities. That and municipal aid would be used to lower local property taxes. In reality property taxes skyrocket and the pension system goes bust. State government is nothing but a skimming machine at this point. Every layer skims a little off the top until there is nothing left. Downstreaming. Nice term.

    Reply

    • You have it perfect. School property tax is cruel and Regressive, while NJ Income tax is based on ability-to-pay, and is Progressive. Easy choice for wealthy.

      Reply

      • Posted by Tough Love on September 9, 2014 at 8:05 pm

        When you focus on WHICH tax is better, you’re essentially ACCEPTING that the “expense” is a reasonable one.

        That’s hardly the case when it comes the the grossly excessive Public Sector pension & benefit in place today (and growing daily as MORE unsustainable benefits accrue). In THIS area…. we must seek pension & benefit REDUCTIONS, (for all CURRENT workers), NOT additional revenue to fund these absurd, unnecessary and unjust “promises”.

        Reply

  2. Posted by Tough Love on September 9, 2014 at 7:07 pm

    The disaster due to the grossly excessive Public Sector pension & benefit promises was on auto-pilot (to happen anyway) long before Christie arrived …. it’s just that the rating agencies have now decided to no longer ignore it.

    Not sure how these downgrades are …. : “It’s a great referendum on my fiscal policies,”

    But perhaps he is correct when he says …………”It says that we’re getting our fiscal house in order. When other states get their houses in order, they will see the downgrades too.””………… because the FIRST step in ADDRESSING a problem is to RECOGNIZE that you have one, something Christie (but NOT the Democratic Governors that preceded him, nor the CURRENT Democratic Legislature) has dome.

    Well done Gov. Christie !

    Now FIX IT for good by VERY materially reducing the future service pensions & benefits for all CURRENT workers.

    Reply

    • Posted by Anonymous on September 9, 2014 at 7:41 pm

      bwahahhahahaahahahahhahahahah this is so utterly comical. So ridiculously hilarious!
      Fiction is my truth, thy name is TL.

      Reply

  3. Posted by Anonymous on September 9, 2014 at 7:44 pm

    I lost my house because I didnt pay my mortgage. I never paid my creditors and went bankrupt. I did the right thing because I righted the ship! It was very difficult for me not to pay my bills, give me credit for staying the course and allowing my creditors to pay my way. Hey its the American Way!

    Reply

    • Posted by bpaterson on September 10, 2014 at 10:42 am

      bitter medicine for sure.

      I remember the analogy going around about 6 years ago-This state is like an alcoholic binging on debt, obligations, entitlements and expenditures. It didn’t change much since then, maybe got worse. But the ratings are like the chickens coming home to roost, indicators that there is indeed an unbalance now made perfectly clear. Definitely needed.

      The alcoholic state of NJ has to hit bottom. The ratings are carrying us there.

      Reply

  4. Posted by hondo on September 9, 2014 at 8:35 pm

    The iconic Mr. Walter Reuther from Ford Motor Co. had a vision that public & private would be one of the same ! A true american hero! Even Henry Ford’s bullies could not stop him.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: