Gateway Pot, Big Tax Breaks, and the Economy — Fact-Checking Christie’s Claims

Gov. Chris Christie's final State of the State address Tuesday served two functions — to size up how New Jersey's doing heading into the final year of Christie's tenure, and to set his agenda for the time he has left.

On the latter point, Christie laid out proposals to tackle New Jersey's growing drug problem — proposing more funding for treatment and loosening restrictions that turn addicts away form recovery programs. But on the former, he made a variety of claims about his accomplishments — on the economy, on taxes and on fighting the drug epidemic to date.

How do they hold up?

CLAIMS:

• Marijuana is a gateway drug for young people
• New Jersey's getting big tax cuts
• The New Jersey economy is on the upswing
• Christie has done more than any other governor on addiction
• He's delivered on promise for smaller government
• Christie has been most generous to pension system

CLAIM: Marijuana use makes drug use more likely.

Christie cited a Surgeon General report that “tells us that the age of first use of alcohol or any illicit drug vastly increases the rate of addiction.”

“In other words, the earlier you try ANY illicit drug the greater the risk of addiction to other drugs. I want all the advocates of legalizing recreational marijuana to listen to these numbers. If you try any drug by the age of 13, you have a 70 percent chance of developing addiction in the next seven years. Addicted by the time you are 20 years old. I hope that this will give pause to those who are blindly pushing ahead to legalize another illicit drug in our state for tax revenue or by saying it will cause no harm. The statistics prove you wrong. Dead wrong.”

REALITY — It depends who you ask. Christie’s referencing “Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health” issued last year. The same report said impacts of state laws legalizing therapeutic or recreational marijuana “are still being evaluated” — though the differences between such laws make evaluations difficult. No states have legalized recreational marijuana use for people under 21, and no New Jersey proposal calls for doing so.

It did caution that many legalization efforts leave marijuana use largely unregulated — leaving users without good information about safe dosing or potency, “which can lead and has led to serious consequences such as hospitalizations for psychosis and other overdose-related symptoms.”

The figure Christie cited — that 70 percent of people who use an illicit drug by age 13 develop addiction in the next seven years — was first established in a 1995 paper, “Early-onset drug use and risk of later drug problems. Drug and Alcohol Dependence” by JC Anthony and KR Petronis. Self-reported data from 1,525 illicit-drug using individuals, all of whom were 18 to 24 years old, suggested that early drug use was correlated with addiction later on — though not necessarily addiction in the first year after trying a drug. But the report also noted the duration of drug use could be a factor, and that other interpretations should be investigated.

There’s a wealth of material suggesting a correlation between early marijuana use and other drug use — but not much that strongly suggests one causes the other. A 1999 report by the Institute of Medicine, referenced by FactCheck.org’s own lengthy exploration of other Christie claims that marijuana is a gateway drug, cautioned against confusing causation and correlation:

“In the sense that marijuana use typically precedes rather than follows initiation into the use of other illicit drugs, it is indeed a gateway drug. However, it does not appear to be a gateway drug to the extent that it is the cause or even that it is the most significant predictor of serious drug abuse; that is, care must be taken not to attribute cause to association.”

CLAIM: New Jersey residents will see tax cuts for the first time in years

Christie boasted of several “broad-based” tax cuts, telling the state, “That’s right, for the first time in over 20 years, New Jerseyans will actually see taxes go down this year.” He thanked Democrats for working with him on “tax relief we can all be proud of.”

Among the tax breaks he pointed to:

• The sales tax: “In 2017, our sales tax will be cut for the first time in decades. The even better news — it will be cut again on Jan. 1, 2018. 520 million dollars in relief for every New Jerseyan who pays the sales tax.”
• The EITC: “In 2017, the working poor in New Jersey will get even more assistance to raise their families. When we entered office the Earned Income Tax Credit was 25%. In 2015, we increased the credit to 30% and last week we increased it again to 35%.
• Retirement income: Seniors will get tax breaks, as the state excludes more retirement income from taxes. “In four years, seniors will be able to make $100,000 in retirement income and pay no state income taxes,” he said, promising an incentive for seniors to stay in New Jersey.
• The “death tax: “ People will now be able to choose New Jersey rather than one of the other 49 states in their later years because we will stop soaking them in their senior years. New Jersey’s estate tax has risen from a $675,000 exclusion to a $2 million exclusion on Jan. 1. On Jan. 1, 2018, New Jersey will no longer have any estate tax at all.”
• Support for Veterans: “In 2017, our veterans will be honored for their service in our military by our tax code. New Jersey veterans who are honorably discharged from service will get their own personal exemption from state income taxes.

REALITY — True, but you might still pay a lot more. You’ll notice Christie didn’t mention one major tax — New Jersey’s gas tax, which increased overnight by 23 cents per gallon, taking it from one of the lowest to one of the highest in the United States — and which could go up over time.

In fact, it’s a deal for that gas tax increase — to fund the state’s broke Transportation Trust Fund, responsible for the state’s roads and other transit infrastructure — that secured most of the other cuts. Christie long swore he wouldn’t sign off on any such deal unless it amounted to “tax fairness” for New Jerseyans.

The tax hikes amount to $1.2 billion a year, and the tax cuts eventually approach $1.4 billion a year — so in raw numbers, New Jersey’s getting taxed less.

But that doesn’t mean you’ll feel the tax cuts, especially if you’re not in one of the groups — such as veterans and retirees — benefiting significantly. The sales tax is being reduced by just one-eighth of a percentage point this month, then another quarter percent in 2018.

The estate tax, or “death tax” as Christie called it, is paid on approximately 3,500 estates annually, around 5 percent of the approximately 70,000 deaths in the state each year — so while it’s a huge revenue stream for the state, 95 percent of New Jerseyans won’t see any benefit.

But a driver who puts about 15,000 miles on his or her car per year can expect to pay about another $140 in gas taxes.

Oh, and on the Earned Income Tax Credit — it’s true that Christie’s overseen expansions to the EITC, now up to 35 percent from the 25 percent when he entered office. But he also slashed it from 25 percent to 20 percent in 2010, and it stayed at that level for five years. Only toward the end of Christie’s administration did it start creeping back up, benefiting more of the working poor.

CLAIM — New Jersey’s economy continues to grow

“The State of the State is good,” Christie said, “having boldly dealt with so many of the long-term problems we inherited in 2010, having an economy which continues to grow and now ready to use 2017 to confront problems that still need solving.”

He cited several stats:

• Job growth: New Jersey’s private sector has created 278,000 jobs in seven years, with seven consecutive years of job growth. “All the jobs lost in the great recession have been recovered.”
  • Home sales: Existing home sales rose 15 percent last year
• Unemployment: “Look at what has happened to the state unemployment rate — at 9.8% when we entered office, to 5 percent today, nearly cut in half,” Christie said. There were “445,000 New Jerseyans out of work when we came to Trenton, 50 percent fewer unemployed today.”

REALITY: We’re still lagging behind

New Jersey’s economy has improved, but it’s been slow-going compared to the rest of the nation.

U.S. household income grew by 5.2 percent in 2015, for instance, but remained stagnant in New Jersey, according to Census data cited by the New York Times. New Jersey’s household income was actually flat for several years – after big dips around 2008-2011 attributed to the Great Recession.

And the national unemployment rate is still slightly better than New Jersey’s, at 4.7 percent in December, though it’s not a huge difference.

Christie himself acknowledged it’s not all good news in his speech: “While the pundits and prognosticators always see the glass half empty, for New Jersey families who were out of work in 2010, the glass is fuller; much, much fuller as we enter 2017 and we should be proud of the work we have done to make it so.”

CLAIM: Christie has done more than any other governor on addiction

Most of Christie's State of the State address on Tuesday was about the scourge of addiction.

“This administration has done more than any in New Jersey history on the issue of addiction," he said. "We are proud of what we have done, but it has not been enough."

REALITY: While this is a topic Christie has repeatedly turned to during his last year in office, even Christie admits that more work needs to be done.

But Christie might be right to tout his own record on addiction. Just ask former Gov. Jim McGreevey, a Democrat who now works with prisoner re-entry programs. McGreevey recently said that Christie’s work on addiction will be one of Christie’s greatest legacies.

“Gov. Christie … has done more through legislation, more through his leadership to address the tragedy and the pain and the suffering of addiction than any governor in the history of this state,” McGreevey said last month.

“I think the governor will be remembered, particularly by those whose lives he has transformed, for his successes and for his diligence and for the services that he has provided."

The Christie administration made the heroin-overdose antidote Narcan available in every county and provided training to cops and EMTs on who to administer it. Last year in the state, Narcan was used 10,000 times.

The state also doubled recovery coach program last year to 11 counties, where counselors in emergency hospitals help recovering addicts.

And under Christie, the state made Drug Court mandatory for nonviolent drug offenders, putting a focus on rehabilitation rather than punishment.

Remains a growing problem. Last year in Ocean County alone, nearly 200 people have died from overdose deaths.

Christie's work on addiction has its detractors, however. A 2015 editorial by The Star-Ledger pointed out that spending on treatment decreased during Christie's term.

And in a recent column for PolitickerNJ, drug-reform advocate Jay Lassiter writes that growing Narcan-usage in New Jersey "is NOT a sign of our progress, it’s proof of our failure."

CLAIM: He's delivered on promise for smaller government

Christie likes to tout his fiscal-conservative bonafides. In his address, Christie said "we have kept our promise to reverse the outlandish growth of government which was created in the decade before our arrival."

REALITY: Government growth has not reversed.

In his address, Christie noted that Trenton eliminated 10,000 jobs in addition to the 21,000 lost by county and local government in the last seven years.

Data from the U.S. Bureau of Labor Statistics bears this out. According to federal statistics,New Jersey had 613,300 government jobs employed by local, state and federal government in October, down from 652,600 for the same month in 2009.

Christie’s 2017 budget of $34.8 billion was a billion more than the budget from the previous year, but Christie noted last year that discretionary spending – meaning expenses other than pensions, health benefits and debt service — was $2 billion less than in 2008, when Gov. Jon Corzine was in office. The total budget in 2008 was $33.3 billion.

CLAIM: Christie has been most generous to pension system

Christie said his administration "has been, far and away, the most generous to the pension system in the last 23 years."

REALITY: While the amount of dollars the administration has contributed to the pension has been the highest, experts say the state should be contributing a greater percentage.

The state this year will contribute $1.9 billion to the pension fund, which Christie noted will be the largest in history. While Christie has been office, the state has contributed $6.3 billion, twice as much as governors Whitman, DiFrancesco, McGreevey, Codey and Corzine combined, Christie said.

But the state's unfunded liability for the pensions is $79 billion.

The conservative American Legislative Exchange Council, or ALEC, last year said that based on its calculations, New Jersey has the nation’s fourth-worst funding ratio for its pensions, 27 percent; the sixth-highest unfunded liability at $235 billion; and the fifth-highest liability per capita, $26,288.

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