Sunday, April 20, 2014
Inquirer Daily News

Different budget approaches in NJ and PA

Like Pennsylvania, New Jersey has major fiscal problems. But that's where the similarities end. Unlike Gov. Ed Rendell, NJ Gov. Chris Christie is making major cuts to his state's budget.

Different budget approaches in NJ and PA

Gov. Christie announced today about $1.5 billion in spending cuts, including freezing aid to school districts, public colleges and hospitals.<br />(AP Photo/Mel Evan/File)
Gov. Christie announced today about $1.5 billion in spending cuts, including freezing aid to school districts, public colleges and hospitals. (AP Photo/Mel Evan/File)

Like Pennsylvania, New Jersey has major fiscal problems. But that's where the similarities end. Unlike Gov. Ed Rendell, NJ Gov. Chris Christie is making major cuts to his state's budget.

Christie recently declared a “fiscal state of emergency” because of a $2.2 billion mid-year budget deficit. To deal with the shortfall, Christie is slashing government programs. That includes $475 million in education funding, $128 million to encourage alternative energy, and $40 million to help homeowners avoid foreclosure. Rendell opted to mostly maintain the size of government, and actually increased spending in a few small areas.

Not surprisingly, the governors have taken disparate approaches to taxes as well. In Pa., Rendell has proposed taxing some items currently exempt from the state sales tax. He's also called for a new tax on natural gas drilling. Christie has made clear that he believes NJ's tax burden is already too high, and is unlikely to propose any increases in his first budget.

More differences: Both Rendell and Christie are grappling with the exploding cost of pensions. Rendell wants to use tax revenue to deal with the problem; Christie wants higher contributions from public employees.

For budget watchers, the different approaches of NJ and PA might provide an interesting experiment: Which state is taking a better approach to dealing with the current budget deficits and revenue shortfalls? Stay tuned.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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