Chris Christie's Year to Deliver

[WestVirginiaRebel]

Wall Street Journal:

In 2010, New Jersey's Chris Christie proved that a governor can take on teachers unions and not only survive politically, but attract an enthusiastic following. In 2011, Mr. Christie has a chance to prove that his inspiring YouTube speeches are translating into significant reform.

The most pressing need is to reduce one of the nation's heaviest tax burdens. Thanks to Mr. Christie's 2010 veto of a bill targeting the state's high earners, New Jersey has surged from dead last in the Tax Foundation's annual ranking of state business-tax climates all the way up to number 48. But Mr. Christie knows that being slightly better than New York and California is no recipe for job creation. And the Garden State's suffering homeowners realize they are still the reigning champs when it comes to the nation's highest property taxes. It's a crown they are more than eager to relinquish.

Critical to reducing the tax burden is to scale back the outlandish pension promises that politicians have made to government employees, often without clear disclosure to taxpayers. One infamous giveaway in 2001 even helped trigger fraud charges from the U.S. Securities and Exchange Commission. The pols had cooked the books and pretended that the state's pension funds had enough money to cover a 9% increase in benefits. After hoodwinking taxpayers, the state government then misled investors by repeating the fraud in various bond-offering documents.

Now the size of the pension disaster is coming into view. Officially, the state's unfunded pension liabilities amount to $54 billion, but the state optimistically assumes average investment returns of 8.5% per year. Independent estimates put the shortfall closer to $175 billion. On top of that are the separate unfunded liabilities for retiree health benefits, which the state hopefully estimates at another $67 billion.

"Pension and benefit reform is going to happen," Mr. Christie said this week in a visit to the Journal's editorial board. It has to happen, not just to repair the state's general fiscal health, but also to enable Mr. Christie's signature reform of 2010. The legislature passed his cap limiting local property tax collections to increases of no more than 2%. But localities can break the cap in order to pay pensions and benefits, so if the governor can't fix the pension system, he can't deliver the property tax relief voters are expecting.
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Chris Christie has his work cut out for him. So far, he's at least trying to deliver, at least on this issue.