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A Project of The Annenberg Public Policy Center

Unspinning Christie’s State of the State

In his State of the State address, New Jersey Gov. Chris Christie exaggerated some figures and boasted about progress that doesn’t look so impressive when compared with national trends.

  • Christie boasted that New Jersey’s unemployment rate has dropped from 9.7 percent when he took office to 6.4 percent (as of November). But New Jersey was doing slightly better than the national average when he took office, and is now doing slightly worse.
  • The governor touted the creation of 150,000 private sector jobs. But New Jersey’s rate of private sector job growth is less than half the national average; in fact New Jersey ranked 49th out of 50 states in private sector job growth.
  • Christie crowed about New Jersey being “No. 4 in per capita income.” The state is actually third in per capita personal income, exactly where it was the year before Christie took office. It ranked second for more than two decades before that.
  • Christie said that state property taxes “increased more than 70 percent” in the 10 years prior to him becoming governor, and that they’ve increased by “less than 2 percent” in each of the last four. That ignores the impact state rebates have played in lowering the property tax burden before he was governor, and the impact of the rebate cuts he implemented as governor.
  • Christie made the misleading claim that “taxes were raised 115 times in the eight years before 2010,” the year he took office. But that list includes fees, not just taxes, and the governor himself proposed 23 fee hikes in the 2015 budget.

Christie is a potential candidate for the Republican presidential nomination in 2016, and the New York Times noted that his annual State of the State speech on Jan. 13 sounded like “a defensive move by a politician anticipating the shots that could be leveled against him.” But Christie spun the numbers to make his case that “New Jersey is better off than it was last year at this time, and it is certainly far better off than it was just five years ago.”

Unemployment Rate

In his speech, Christie asked New Jerseyans to consider “where we were and how far we have come,” noting that the state’s unemployment has been cut by a third in the last five years.

Christie, Jan. 13: Five years ago, our unemployment rate was 9.7 percent. Over 440,000 New Jerseyans were out of work. Today, the unemployment rate is 6.4 percent.

It’s true, as Christie said, that when he took office in January 2010, the state’s unemployment rate was 9.7 percent and over 440,000 New Jerseyans were out of work (442,318 to be exact, according to the Bureau of Labor Statistics). And Christie rightly notes that the state’s unemployment rate in November, the latest month available, was 6.4 percent.

But here’s what was left unsaid: When Christie took office, New Jersey’s unemployment rate at 9.7 percent was slightly better than the national unemployment rate of 9.8 percent; but New Jersey’s rate in November was higher than the national rate, which was 5.8 percent. (The national rate dipped again in December to 5.6 percent.) In addition, New Jersey’s 6.4 percent unemployment rate was also worse than its neighbors, Pennsylvania (5.1 percent), New York (5.9 percent) and Delaware (6.0 percent).

Job Growth

Christie also boasted that New Jersey has “created over 150,000 private sector jobs in New Jersey in five short years.” The actual figure, according to BLS, is 142,700. That may sound impressive, but that statistic wilts when viewed in light of national trends.

In fact, the rate of private sector job growth in New Jersey, 4.5 percent, is well below the national average of 10.2 percent. Under Christie, New Jersey ranks 49th out of 50 states in private sector job growth (beating only Maine). In terms of overall job growth, which includes public sector jobs, New Jersey under Christie is dead last.

Christie also noted that, “Since last January, the total number of people employed in New Jersey has grown by over 90,000, and the number of unemployed has dropped by nearly 30,000.” Those figures are pretty accurate, according to population surveys conducted by the U.S. Census for BLS. The number of employed New Jerseyans grew from 4,157,733 in January to 4,250,823 in November. That’s an increase of 93,090. And the number of unemployed New Jerseyans dropped from 317,118 in January to 291,870 in November.  That’s a decrease of 25,248.

But Christie was wrong to say those were people employed in New Jersey. The survey does not ask where people are employed. As the Asbury Park Press noted, “Economists have said many of them likely are working in New York and Pennsylvania, where the job market has been stronger.”

Also left out of Christie’s narrative, the New York Times noted, New Jersey has only recovered about half the jobs lost in the Great Recession, while the nation as a whole has recovered all those jobs and then some. Nationally, about 8.6 million jobs were shed from February 2008 to February 2010. Since then, the national economy has added about 10.4 million jobs. By comparison, New Jersey lost  253,800 jobs between February 2008 and February 2010; but has only recovered 121,800 of them.

 Per Capita Income

Christie also bragged about the state’s unique assets in helping to lure businesses. He noted, for example, that New Jersey is “No. 4 in per capita income.” Actually, New Jersey’s ranking is better than that. New Jersey placed third in per capita personal income in 2013 (excluding the District of Columbia), according to the U.S. Department of Commerce’s Bureau of Economic Analysis.

But that impressive ranking is not new and has not improved under Christie. New Jersey ranked third in per capita personal income every year between 2009 and 2013, except in 2012 when it ranked fourth. And it ranked second in the country every year for more than two decades prior to 2009.

Property Taxes

Christie said when he came into office, New Jersey’s “property taxes had increased more than 70 percent in 10 years. We averaged a 7 percent growth in property taxes per year.”

It’s true that, on average, property taxes increased about that much statewide between 1999 and 2009, according to figures from the state Department of Community Affairs. Homeowners and tenants paid an average of $4,239 in property taxes in 1999 and $7,281 in 2009.

However, Christie’s claim doesn’t factor in rebates that some received over that time that ultimately lowered their property tax burden.

When factoring in the average tax rebate homeowners and tenants received — $111 in 1999 and $1,037 in 2009 — property taxes increased by closer to 51 percent over that time period.

Christie also said that since he’s been in office, “we have had four years of less than 2 percent annual property tax growth.” That’s not exactly right.

Property taxes increased 1.6 percent in 2012 and 1.3 percent in 2013, after Christie signed a bill capping annual property tax increases at no more than 2 percent. But there was a 2.4 percent increase in 2011. Figures for 2014 have not yet been released.

Christie’s claim of 2 percent annual growth also ignores large cuts in the property tax rebate program that he has made to help balance the state budget while in office.

According to an analysis of previously available state data by the news website NJ Spotlight, average net property taxes (including rebate deductions) increased by 18.6 percent, or 6.2 percent annually, between 2009 and 2012, when taxes, on net, went from $6,244 to $7,405.

Taxes Versus Fees

In his speech, Christie boasted about not raising taxes in his past five budgets and, by contrast, he said “taxes were raised 115 times in the eight years” before he became governor in 2010. That’s misleading.

Christie’s list of 115 “taxes” actually includes both taxes and fees. And the governor himself has raised numerous fees. In fact, Christie proposed 23 fee hikes in his 2015 budget.

Christie made the distinction between taxes and fees in his 2013 State of the State address, when he said there had been “115 increases in taxes and fees” in the eight years before he was inaugurated. But this time he dropped the word “fees.”

We point this out because politicians, including Christie, draw a distinction between taxes and fees.

What’s the difference? Some members of the public may not see a major disparity between extending the sales tax to cover limousine services and adding a fee on new cars with low-fuel efficiency — two of the items in the Republican-compiled list. Whatever you want to call them, both measures amount to additional money paid by state residents. But politicians certainly put taxes and fees in separate categories.

For example, Christie said his 2015 budget “requires no new taxes on the people of New Jersey,” when he presented his latest budget to the Legislature in February 2014. But a few months later, his administration was explaining 23 proposed fee increases.

And, in fact, the budget included a proposed tax on e-cigarettes and “closing tax loopholes,” which the administration estimated would bring in $205 million in revenue.

The nonpartisan state Office of Legislative Services’ analysis of the governor’s proposal showed $240 million worth of “revenue initiatives requiring legislation,” including the e-cigarette tax; penalties for bad electronic payments of income, corporate and sales taxes; and a change in online sales tax collection. Whether those items amount to raising taxes or “closing tax loopholes and leveling the playing field,” as the governor’s budget summary put it, may be a matter of opinion. But the same could be said of the list of 115 taxes and fees instituted before Christie took office.

The Record newspaper in Bergen County, New Jersey, wrote in a May 12, 2014, article on Christie’s proposed fees: “Christie is not the first governor to turn to increasing fees and fines as a way to generate new revenue while also escaping the stigma of hiking taxes,” noting that former Democratic Gov. James McGreevey had raised more than $1 billion in 2004 through fee increases and that Christie had increased New Jersey Transit fees in 2010 to make up a budget shortfall.

During the 2008 presidential election, we fact-checked former Massachusetts Gov. Mitt Romney’s claim that he “did not raise taxes” while governor and found that he had raised fees by hundreds of millions of dollars.

PolitiFact New Jersey first published the list of 115 taxes and fees in 2011, when a state Republican senator made the claim about the “tax” increases that Christie repeated in his speech. That list includes increases in sales taxes, cigarette and alcohol taxes, income taxes on high-income earners, as well as numerous increases in fees, including on divorce, vehicle registration, casino hotel rooms and new tires.

Christie can’t have it both ways. If fees are taxes — as is implied when Christie says “taxes were raised 115 times in the eight years before 2010” — then Christie is guilty of proposing at least 23 tax increases in his budget last year.

Also, Christie’s proposal to require out-of-state online retailers to charge sales tax to New Jersey customers puts him at odds with conservatives who oppose more sweeping federal legislation, the Marketplace Fairness Act. The conservative Freedom Works calls it “the Internet sales tax.” Texas Sen. Ted Cruz, another potential Republican presidential candidate, calls it a “job-killing tax hike.” Christie’s 2015 budget calls his measure “extending to [online retailers] the same obligation that other New Jersey businesses already have to collect sales tax on sales to New Jersey customers.”

The measure was signed into law by Christie last summer and applies to online companies that act as a sales platform for retailers with a physical presence in New Jersey (think eBay or Overstock.com). New Jersey tax law stipulates that consumers are obligated to pay sales tax — in this case called a “use tax” — if an online retailer doesn’t collect it. But many residents may not be aware of that. The Office of Legislative Services estimated the change in state law would bring in $25 million in additional revenue.

— Robert Farley, D’Angelo Gore, Lori Robertson and Brooks Jackson, with Carolyn Fante