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Difficult Budget Choices Await Gov.-Elect

NEW BRUNSWICK, NJ-Balancing the state's budget may mean harsh spending cuts, not just raising taxes.

By Maria Wood | Updated on November 17, 2009

NEW BRUNSWICK, NJ-In light of a recent report from the Pew Center on the States that places New Jersey in the same fiscal peril as California and eight other states, Gov.-elect Chris Christie faces some wrenching budgetary decisions, say economic experts in the Garden State.

James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University here, tells GlobeSt.com that he was surprised that New Jersey was on the same list as Arizona, California, Florida, Illinois, Michigan, Nevada, Oregon, Rhode Island and Wisconsin. He points out that the sand states–California, Arizona, Florida and Nevada–were devastated by the residential housing bubble bust.

Meanwhile, Michigan, Illinois and Wisconsin are older manufacturing states linked to the auto industry. New Jersey lacks both those unique factors. “Ours seems like it’s almost a self-inflicted situation,” Hughes says. “It reflects fiscal mismanagement for most of this decade. That puts us in a very risky position because when investment decisions are being made, major corporations are going to look at that and say, the state may increase business taxes to cover the huge deficits it is facing.”

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