"Governor Christie's predictions for tax collections have missed the mark," the Bergen Record's John Reitmeyer writes today, and the state now has an $800 million budget shortfall. It's only the latest in a series of optimistic budget estimates by Christie that have been disproven by reality.
Economic forecasting is hard, and there isn't malfeasance behind every missed projection. But what makes this particularly embarrassing for Christie is that, when the state's top budget wonk criticized his past forecasts, Christie responded by insulting him and suggesting that he be fired.
There's a long history of politicians in executive office releasing misleading or overly-optimistic budget numbers. Often, they do so by assuming soaring economic growth and increasing tax revenues — which can help them avoid painful decisions about spending cuts or tax increases.
That's why Washington has the Congressional Budget Office, the nonpartisan legislative agency that frequently throws cold water on the White House's hopes. If the president asserts that his policies will lead the deficit to plummet, the CBO will usually offer its own independent and skeptical assessment. New Jersey has a similar nonpartisan agency, the Office of Legislative Services, and for 30 years its chief budget officer has been a man named David Rosen.
When Christie issued his budget estimates in 2012, they looked odd to most observers. He predicted that revenue would have a huge yearly increase of 7.4 percent — which the Star-Ledger found was the most optimistic in the nation — due to economic growth. This also allowed him to avoid raising taxes, or making any more particularly painful spending cuts, as his reelection the following year loomed.
This was early 2012, before Hurricane Sandy hit and Christie's popularity surged, so his reelection wasn't yet certain. At the time, he planned to make the case that he had led the state to an economic recovery, which he dubbed "the New Jersey comeback" — even though unemployment numbers remained quite bad.
So it was very inconvenient when David Rosen said Christie's projections would come up $145 million short that year, and $392 million short the following year. Christie criticized Rosen immediately, calling his office partisan and saying "they shouldn't be given any credibility." He added, "They're background noise to the New Jersey comeback."
Weeks later, Christie went further, going after Rosen personally in what the Star-Ledger called "a fiery 20-minute tirade." He called Rosen, widely respected among legislators of both parties for years, a "Dr. Kevorkian of the numbers" and asked, "Why would anybody with a functioning brain believe this guy? … How often do you have to be wrong to finally be dismissed?" Christie went on: "It should be humiliating to him. Nobody in this state believes David Rosen, anymore, nobody. And nobody should. He's so wrong, for so long, that his credibility is now gone." Watch some of what he said below:
But Rosen's projections turned out to be far more accurate. He had said that revenue for the 2012 fiscal year would fall $145 million short of Christie's estimates, and it actually fell $275 million short. For the two fiscal years ending in June 2013, Rosen predicted a $1.3 billion revenue shortfall, and this also turned out to be right on.
As the inconvenient numbers rolled in, Christie kept insulting Rosen publicly, calling his estimates "politically motivated," and saying Rosen wanted to derail his planned tax cut. But only days later, Christie's administration advised potential bond investors on Wall Street that revenue could fall far short of their earlier estimates — as it subsequently did. Finally, after Hurricane Sandy, Christie shelved his tax cut for the time being. He blamed the storm, even though revenue was already $264 million short in the 4 months before it hit. He never apologized to Rosen.
Back in 2009, the White House had some disagreements with CBO's projections of how much health reform would cost, and President Obama requested director Doug Elmendorf meet with him and his aides privately. For this, the Wall Street Journal editorial page called him the "Intimidator in Chief" and accused him of "bullying CBO."
Christie, though, went far further. He's frequently been accused of using the power of his office to bully and intimidate others — accusations that have loomed over the investigations of the Bridgegate scandal. In his war against his state's top budget wonk, he did just that — and he also turned out to be flatly wrong.