Bloomberg News

Christie’s Economist Quits After Faulty Revenue Forecasts

July 18, 2014

Charles Steindel, whose three straight years of optimistic revenue projections influenced six New Jersey credit downgrades, is resigning as Republican Governor Chris Christie’s chief economist.

New Jersey is seeking a replacement with a July 30 deadline for applicants, according to a job posting by the office of Treasurer Andrew Sidamon-Eristoff.

Steindel, 62, of Glen Ridge, told Christie’s administration several months ago that he would leave at the end of August, Christopher Santarelli, a spokesman for the Treasury Department, said today by telephone. Steindel said he had accepted a job as resident scholar at Ramapo College in Mahwah, according to Santarelli.

Steindel, a former Federal Reserve Bank of New York senior vice president who joined the administration in November 2010, didn’t immediately respond to a phone message left on a number listed for his home. An e-mail to his office account bounced back with a message that he is out of the office.

“We are extremely grateful for Dr. Steindel’s service and the expertise he offered on the full range of public finance and economic issues confronting New Jersey and the region,” Michael Drewniak, a spokesman for Christie, said in an e-mail. Steindel’s students, he said, “will be fortunate to have him.”

California Dreaming

Christie, who created the chief economist’s job to help guide the state to recovery after the 18-month recession, has been dogged by revenue shortfalls and rising pension costs. The three major credit-rating companies have all indicated that the state may face a seventh downgrade, a record for a New Jersey governor, if he and lawmakers can’t end recurring deficits.

For the first time since 1977, municipal-bond investors view the state as riskier than California. New Jersey has the second-lowest credit rating among U.S. states from Moody’s Investors Service, which ranks it four steps below top grade. Standard & Poor’s and Fitch Ratings have also cut the state this year. Moody’s last month raised California to the highest since 2001.

Steindel’s revenue projections fell short in four of the past five years, three of them consecutive. The misses amount to a net $3.5 billion, according to data from state reports. That’s almost enough to cover the pension payments on which Christie planned to skimp for two years.

Santarelli has said the missed projections were caused in part by New Jersey’s volatile tax structure, the economic effects of Hurricane Sandy and federal measures that prompted high-income filers to accelerate payments.

“The treasurer is extremely grateful to Dr. Steindel for his service to the state,” Santarelli said in a follow-up e-mail after the telephone conversation.

State Senate President Stephen Sweeney, 55, a Democrat from West Deptford, said by telephone that Steindel’s forecasts “haven’t been right yet.”

“The one thing that has been consistent,” Sweeney said, “is that he’s been wrong.”

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Jeffrey Taylor, Stephen West


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