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Thursday, Feb. 25, 2010 01:04 am

Can Illinois beat New Jersey in battle over red ink?


New Jersey Gov. Chris Christie

Decisions made by a governor in a faraway, but strikingly similar state might actually influence our election right here in Illinois.

Just a week or so after Gov. Pat Quinn lays out his state budget blueprint next month, recently elected New Jersey governor Chris Christie will do the same.

Illinois and New Jersey have more in common than you might think. They’re not exactly alike by any means, but they’re both Democratic-leaning states which have elected Republican governors in the past. They both have unemployment troubles, although New Jersey is better off than us right now, and they both have horrible state budget problems.

Illinois’ budget crisis is somewhat worse than New Jersey’s, but they’re similar enough that the two governors’ budget plans will undoubtedly be compared. Illinois’ budget deficit for next fiscal year, which starts in July, is projected at somewhere around $13 billion. New Jersey’s upcoming red ink total will be about $11 billion. The two states’ operating budget sizes are about the same.

Christie, a conservative Republican, has already ruled out any tax hikes to solve the problem and has vowed to allow a corporate income tax surcharge to expire. The liberal Democratic Quinn, on the other hand, is still talking about raising the income tax so he can avoid as many cuts as possible.

A few days ago Christie issued an executive order declaring a “state of fiscal emergency.” He froze school aid to districts that were running at least a 2 percent surplus, ordered a state spending freeze and reserved for himself emergency powers needed to balance the current fiscal year’s budget, among other things. The result, according to Christie, was $2.2 billion in savings – which matches his current deficit.

Illinois’ current fiscal year deficit of $5 billion is much higher than New Jersey’s, but Gov. Quinn has not yet taken any dramatic public action – although the state has quietly shut off the money spigot to just about anything outside of employee payroll, general school aid and most Medicaid reimbursements. Almost nobody else is getting a check. That’s why universities are owed hundreds of millions of dollars, for instance, state workers are being forced to pay up front for doctor visits and legislators are discovering that their district office landlords are being stiffed.

So far, the reaction to Christie’s actions in New Jersey has been mixed. The local media have mostly gushed over Christie’s “bold” executive order, but the Democratic-controlled legislature was upset that the governor made the move without consulting them and various interest groups are beginning to speak out in anger.

What we are almost certain to get next month is a stark contrast in approaches. While Quinn will likely propose big cuts in his budget plan, including slashes to agency operating expenditures and the “suspension” for a year or two of a large number of state programs, new revenue sources will dampen the blow. New Jersey’s Christie, on the other hand, will probably rely solely on steep cuts, “reforms,” payment deferrals and borrowing.

So far, at least, Christie’s promises and rhetoric match up pretty well with Sen. Bill Brady, who appears to be the presumptive Republican nominee for governor here.

Brady has said if elected he would cut taxes by at least a billion dollars, “reform” Medicaid to save as much as $1.8 billion, cut pension benefits and make big state agency cuts across the board.

If Gov. Christie is successful in putting together a budget that isn’t horrifically draconian, Brady can point to that example as something he could follow.

However, I’m not sure that Christie can actually pull it off without coming across as too severe. The projected New Jersey budget deficit is more than a third of the state’s entire operating budget.

But, hey, New Jersey isn’t Illinois, so I won’t even pretend to know how that state runs. Its population is about a third less than ours, yet its operating budget is just as big and they have more state employees, so there seems to be a lot more room to cut over there.

If Christie does somehow succeed, Quinn’s cut, defer, borrow and tax plan will probably come under fire. If, on the other hand, Christie’s budget is repulsively retrograde and doesn’t stand the test of time, Quinn can claim some justification for his own approach and Brady’s promises could be undermined.

Rich Miller publishes Capitol Fax, a daily political newsletter, and