New Jersey’s budget is on track. Both the Christie administration and the Office of Legislative Services say revenue is up more than 5 percent, even though money from casinos and the lottery is down. The New Jersey lottery is the state’s fourth biggest source of revenue at $2.7 billion in ticket sales this year, but that’s down more than 9 percent. A year ago, a private firm was hired to boost lottery sales. Northstar promised to generate almost $1.5 billion over 15 years in return for which it could keep 5 percent. Northstar missed its mark by $24 million and that’s just the first year. Now State Assembly Budget Committee Chair Gary Schaer wants a review of the deal. Schaer told NJTV News Anchor Mary Alice Williams that given Northstar’s history in other states, what happened in the first year out of 15 is a concern.
When asked who and what are affected by this, Schaer said potentially any of number of people. He said that Northstar had projected a 7.4 percent increase and there is a 9.2 percent decrease in terms of expected revenue. That revenue is used for benefits for military veterans, seniors and the disabled so a loss of revenue could impact those budgetary items and affect a number of groups of people in New Jersey.
Schaer said that given the kind of declarations made by Northstar and given its history in other areas, such as Illinois where it has lost money, he thinks the first year out of 15 is a concern.
“The state wasn’t doing a bad job. As a matter of fact, many of us argued that the state was doing a very good job. Many of us believe that the reason why the contract was privatized was in fact for the $120 million that Northstar gave the state up front,” said Schaer. “Funds which went to the general fund to balance the budget, which brings us to other questions. And that is what was the motivation? Was it really to make things more efficient or was it in fact to bring $120 million so that the budget would be more solid than it would have been otherwise?”
In September, the Treasury announced that it will no longer be releasing revenue projections that compare what the state expected with the amount of tax revenue that they actually pulled in. Schaer said that he thinks that speaks to an issue of transparency and an issue of partnership between the executive and legislative branches of government. He said that Gov. Chris Christie goes around the United States and speaks about cooperation with the Democrats and with the Legislature. He said that kind of cooperation is founded upon by a free flow of information back and forth.
“We need to understand what’s going on with the state budget. We shouldn’t be finding out from Bloomberg Press that there’s a shortfall of $24 million,” said Schaer.
Two of the three partners in Northstar contributed substantial amounts of money to the Republican Governors Association. When asked if he sees electoral politics playing role, Schaer said that he cannot make that analysis but it is disturbing.