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NJ Policy Perspective President: Revenue Problem Is Combination of Projections And Finances

8-11-14

The state’s budget troubles have affected many and New Jersey’s bond rating has been downgraded six times since Gov. Chris Christie took office. NJ Policy Perspective President Gordon MacInnes told NJTV News Anchor Mary Alice Williams that the problem has been a combination or revenue projections and the state’s real financial situation.

“It’s a combination really and it sort of reflects the way politicians think about this, whether they’re governors or whether they’re in the legislature,” said MacInnes.

Whether Gov. Christie aims too high and the state misses the projections, MacInnes said that he does not know how that would affect Christie as he can not run for reelection in New Jersey. He did mention that it does hurt a lot of people within the state such as families that get property tax rebates and how they have been delayed.

The state’s chief economist Charles Steindel recently resigned, weeks after receiving the blame for cuts to pension payouts. MacInnes said that it is impossible for one person to be blamed as it is a collective judgment decision.

“It’s impossible for one person to be held responsible for making something which should be a collective judgement about that the economy looks like,” said MacInnes. “How it looks for New Jersey in particular. Let’s get some outside experts who look at the economy, lets get some projections that don’t come from inside. That’s how it really should work, it doesn’t.”

MacInnes said that the state has a professional organization called the Office of Legislative Services and that they tend to be highly regarded for not being partisan and very professional. He said that it would make sense for the Office of Legislative Services to work in a joint and public way with the executive.

On why they haven’t worked together MacInnes said that there are advantages to the governor keeping the authority in his hands.

On whether New Jersey does get downgraded again, MacInnes said that downgrading has a less effect on the state.

“Well downgrading has less an effect in New Jersey than you would expect because there’s so many people of wealth here that want to pay New Jersey bonds that even if our rating is low, the demand for bonds is still pretty high,” said MacInnes. “That’s really what determines the interest rate. However we’re at a point where if interest rates go up and if our economy keeps crawling along then there would be real and very large consequences to the state and to it s tax payers.”