From revenue shortfalls to a pinched pension system, the fiscal woes facing the state of New Jersey are so serious that if not dealt with swiftly, it could “eat us alive,” Gov. Chris Christie told CNBC on Tuesday.
The Republican governor appeared on “Squawk Box” the day after signing the state’s budget, in which he vetoed more than $1 billion in tax increases that he said would only serve to drive families and businesses out of the state.
“I have a constitutional requirement to balance the budget and I have a state that’s already high-taxed and I’m not going to raise taxes on the people in the state of New Jersey and drive more people out,” said Christie.
New Jersey’s pension funds seemed to be the biggest concern for Christie, however. He plans to make a $681 million payment to the state’s pension funds, which will cover the costs of benefits earned by active employees during the year.
In the next fiscal year, New Jersey’s pension system will reach a “tipping point” to where it will pay more for retiree health premiums than active employees, a first in the state’s history and “unsustainable,” the governor said.
“We need to fix this system or it will eat us alive. We need to speak in stark, plain, understandable terms to people … they will get it. They will understand and when they do, empower us to take action,” he said.
Cash-strapped pension systems are not unique to New Jersey, either. Forty states currently face an “unsustainable pension problem,” Christie said.
“The fact is, what the 40-year-old state worker should be concerned about right now is getting reform, because if they just put their heads in the sand, then we will have a Detroit-like problem in New Jersey, in Illinois, in California, and lots of other states across this country,” he said.
Though widely considered a contender for the 2016 presidential election, Christie said he’s currently focused on governing New Jersey and “not running for anything at the moment.” However, he added that he has visited 19 states since December, which could suggest he’s testing the waters.
Whoever wins the Republican nomination, though, should have conviction and be completely honest, the governor said.
“The Republican candidate should tell people what they feel on issues people ask you about. If you get asked a question, answer it. That’s all,” Christie said.