New Jersey Gov. Chris Christie (R) is going back to the payday lender, selling out future taxpayers to fix a cash crunch of his own design.
Here’s the background. For over a decade, New Jersey had been embroiled in a battle with Exxon Mobil over the contamination and loss of use of more than 1,500 acres of public land in the northern part of the state. The company was found liable several years ago, but the amount of damages and cleanup costs it owed had not yet been determined.
Expert witnesses for the state ballparked the total figure at $8.9 billion, and a judge was expected to rule on the final number soon. But then, this month, the state’s lawyers swooped in and decided to settle for a mere $225 million, not including undisclosed cleanup costs.
That’s cents on the dollar.
The news was met with outrage from environmentalists and former state officials. A similar case was also settled for pennies on the dollar a few months ago. These are, as New Jersey Sierra Club chapter director Jeff Tittel put it in a phone interview, “dirty deeds, done dirt cheap.”
Most of the coverage of the peculiarly low settlement has emphasized Exxon Mobil’s generous donations to the Republican Governors Association. The company gave hundreds of thousands of dollars last year, while Christie was its chair and the case was in trial; suspicions about a tacit tit-for-tat don’t seem unwarranted.
But the real smoking gun, and the one that’s most revealing about how Christie might handle federal fiscal challenges should he become president, relates to how much budget gimmickry drove his decision to force a bad deal upon his constituents.
Christie’s crowning achievement as governor of the Garden State has supposedly been balancing the budget without raising taxes. He’s even managed to reduce corporate taxes by hundreds of millions of dollars annually. But he’s primarily accomplished these goals through accounting tricks, raiding rainy-day funds and other shortsighted gimmicks. He has, in other words, sold off the state’s future to preserve the fiction of his fiscal responsibility.
These environmental settlements are no exception.
Historically, under state law, money received from environmental settlements has to be used on environmental efforts. But last year the Christie administration snuck some language into the state budget that effectively overrode this. For this fiscal year — and potentially this fiscal year only — the first $50 million of any environmental settlement will go toward environmental programs; anything above that can be diverted to plug holes in the state’s general fund.
This meant there was great pressure for the state to settle the case now for whatever it could get, rather than wait — possibly for years — for the much larger amount likely to have been awarded by the judge.
It’s one thing to be pro-business, the environment be damned. But it’s quite another to trade billions of dollars tomorrow for a tiny fraction of that today and still call yourself a fiscal conservative. This is the very definition of penny-wise, pound-foolish. But remember that Christie gets credit for those pennies today, whereas pounds forfeited tomorrow will be the next governor’s problem.
We’ve seen similar calculations from Christie before. He has axed state funding for family planning, for example, even though such spending prevents much larger costs later on, when the state must help foot the bill for poor women’s unplanned pregnancies. He illegally cut the state’s pension contributions, raising the burden for future taxpayers. And in a transit fiasco that should be far more upsetting than Bridgegate, Christie halted construction of a federally subsidized train tunnel to New York — which would have raised property values and eased commutes for his constituents — so that he could instead divert the state’s portion of the funding to pay for bridge and road repairs without raising gas taxes. If Christie indeed wanted to cause “traffic problems in Fort Lee,” as a top aide wrote in a notorious e-mail, the tunnel cancellation was a much more enduring way to achieve this.
Plenty of other states have engaged in similar budget sleight of hand to some extent; in the immediate aftermath of the financial crisis, lots of states had privatization fire sales, selling off or leasing out valuable assets at bargain-basement prices to solve short-term liquidity crunches. But New Jersey’s one-off budget tricks have continued long after the national economy has healed, and they will leave a major fiscal wreck in Christie’s wake.
Christie has portrayed himself as a Washington outsider. But this track record suggests he’d blend into D.C. budget politics rather seamlessly after all.