With Treasurer Andrew Sidamon-Eristoff’s shocking announcement that New Jersey is facing an $800 million current-year budget gap, he and Gov. Chris Christie now face the daunting task of figuring out how to close such a substantial deficit when most of the state budget -- with the exception of a promised $1.5 billion pension payment -- has already been spent.
The need to close such a large budget shortfall with just two months remaining in the fiscal year gives Christie little choice but to take on Senate President Stephen Sweeney (D-Gloucester) and the Democratic legislative leadership in athat Christie has been talking about for months, but would have preferred to put off until next year.
The battle of wills could pit Christie’s willingness to take unilateral action to reduce state pension payments against Sweeney’s threat to shut down the government if Christie fails to make the pension payments required under legislation he signed into law in 2011.
The plunge in income tax payments by wealthy taxpayers that was this year’s “April surprise” will require not only $800 million in almost immediate cuts in the current Fiscal Year 2014 budget, but also substantial reductions in both projected revenue and spending in the upcoming FY15 budget bill.