CBS’ 60 Minutes ran a segment last night on the fiscal nightmare currently underway in most of the states across the country. Faced with plummeting tax revenue and a rising demand for services in the wake of the Great Recession, many states are staring at huge fiscal holes (and most are constitutionally mandated to balance their budgets). The Center on Budget and Policy Priorities estimates that states are $101 billion in the hole for fiscal year 2011.
The segment praised Gov. Chris Christie (R-NJ) as the “canary in the coal mine” for state budget woes, featuring him prominently for, among other things, canceling a planned rail tunnel underneath the Hudson River, laying off thousands of public employees, and cutting education funding.
But even with these cuts, Christie is facing a $10.5 billion deficit. Warning that the “day of reckoning” has arrived, Christie said that there are “no alternatives” except to continue gutting education funding and public employee benefits:
The reason it’s different is because the only choices left are choices that people previously have said were politically impossible. That you couldn’t do. You couldn’t cut K-12 education funding, you couldn’t do those things. You couldn’t talk about pension and benefit reform for the public sector unions. We are now left with no alternatives.
Christie kept emphasizing that, when it came to funding for important projects, “I literally don’t have it.” But that begs the question (which CBS left unasked): if Christie is so certain that his state doesn’t have money to upgrade its infrastructure or prevent its schools from seeing their funding slashed, why is he contemplating cutting both his state’s personal income and corporate income taxes?:
New Jersey Governor Chris Christie may propose business- and income-tax cuts as soon as January, said Robert Grady, chairman of the governor’s Council of Economic Advisors. Christie and Treasurer Andrew Sidamon-Eristoff are evaluating options for reducing individual and corporate taxes, Grady said at a conference of business owners in Woodbridge today.
Back in September, Christie made some noise about cutting New Jersey’s top marginal income tax rate, which only applies to those making more than $500,000 annually (about seven times New Jersey’s median income). The Newark Star-Ledger criticized that decision, writing, “he was the guy telling us to live within our means, to face hard realities. And now this — a tax cut that would blow a new hole in the budget.” And it seems that he’s now added cutting the state’s corporate tax rate in to the mix.
Remember, in May, Christie vetoed a tax increase that would have applied only to his state’s millionaires. So on the one hand, Christie is warning about a “day of reckoning” forcing him to cut education funding, cancel infrastructure projects (thus losing jobs), and take a knife to public sector benefits, because everyone has to “share in the sacrifice.” But on the other, he is considering tax reductions for the wealthy. This is a nice microcosm of conservative priorities in action.
Media Matters’ Jamison Foser writes:
Did Chris Cristie’s speechwriters script this CBS report on state budget deficits? It certainly reads that way. In 2,600 words about state deficits, you won’t find the phrase “tax cuts.”
Instead, CBS adopts the Republican framing that deficits are all about spending — frequently with loaded phrasing like “gold-plated retirement and health care packages.” And throughout the report, CBS allows Christie, New Jersey’s Republican governor, to launch attacks on unions and make unsupported claims about budget problems, all without ever challenging his assertions and without including substantive disagreement from Christie critics.