As reported by, the Christie administration has advised Wall Street that the State’s share of unemployment and Medicaid costs are expected to rise above expectations against a backdrop of lagging revenue collections, according to an amended report filed Monday. The State also warned Wall Street that the combination of rising costs and slumping revenue may force the administration to make difficult mid-year changes, which could mean cuts, in the $31.7 billion spending plan. 

This is a much more somber tone than Governor Chris Christie has struck in public when talking about the State’s budget and economic outlook. Although revenues have grown modestly during the first three months of the fiscal year that began in July, they are $175 million, or 4%, less than Christie projected. The biggest shortfalls were in sales tax collections, which fell nearly 7 percent short of Christie’s projections, the State disclosed. Income tax collections, the most important revenue source, are doing better than expected.

Christie’s revenue estimates for the fiscal year have come under intense scrutiny since he used robust projected growth as evidence of a “Jersey Comeback” in January. The expected 7.4 percent growth rate is among the highest in the nation, but now collections must grow closer to 10 percent to make up for the slower-than-expected revenue thus far. Since January, the unemployment rate has swelled and the State has repeatedly failed to reach its revenue targets.

Christie has also said that revenues are growing enough to pay for a Democratic-sponsored plan to provide an income tax credit equal to 10 percent of residents’ property tax bills. But Democrats believe enacting the cut in this economic climate is reckless and have blocked the Governor’s attempt. “This is just another reason to be concerned about the dire fiscal situation in Chris Christie’s New Jersey,” said Assemblyman Vincent Prieto, chair of the Assembly Budget Committee. “As the people of New Jersey want and support, Assembly Democrats will continue to be fiscally responsible, and hopefully Governor Christie finally decide to join us in that effort and will put aside this ridiculous notion that everything is just fine.”

The State also advised Wall Street that there may be problems on the spending side. Federal subsidies for unemployment payments and other related benefits are expected to expire in December, forcing more costs to the State. In addition, the Medicaid waiver that was recently approved by the federal government took longer than expected and will not capture the expected savings, the State advised. “The above situations may impact the projected ending balance for fiscal year 2013. As a result, other budgetary actions may become necessary during the course of fiscal year 2013,” the State warned.

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Photo of Donald C. Barbati Donald C. Barbati

Donald C. Barbati is a shareholder of Crivelli, Barbati & DeRose, L.L.C. His primary practice revolves around the representation of numerous public employee labor unions in various capacities to include contract negotiation, unfair labor practice litigation, contract grievance arbitration, and other diverse issues…

Donald C. Barbati is a shareholder of Crivelli, Barbati & DeRose, L.L.C. His primary practice revolves around the representation of numerous public employee labor unions in various capacities to include contract negotiation, unfair labor practice litigation, contract grievance arbitration, and other diverse issues litigated before the courts and administrative tribunals throughout the State of New Jersey. In addition, Mr. Barbati also routinely represents individuals in various types of public pension appeals, real estate transactions, and general litigation matters. He is a frequent contributor to the New Jersey Public Safety Officers Law Blog, a free legal publication designed to keep New Jersey public safety officers up-to-date and informed about legal issues pertinent to their profession. During his years of practice, Mr. Barbati has established a reputation for achieving favorable results for his clients in a cost-efficient manner.

Mr. Barbati has also handled numerous novel legal issues while representing New Jersey Public Safety Officers. Most notably, he served as lead counsel for the Appellants in the published case In re Rodriguez, 423 N.J. Super. 440 (App. Div. 2011). In that case, Mr. Barbati successfully argued on behalf of the Appellants, thereby overturning the Attorney General’s denial of counsel to two prison guards in a civil rights suit arising from an inmate assault. In the process, the Court clarified the standard to be utilized by the Attorney General in assessing whether a public employee is entitled to legal representation and mandated that reliance must be placed on up-to-date information.

Prior to becoming a practicing attorney, Mr. Barbati served as a judicial law clerk to the Honorable Linda R. Feinberg, Assignment Judge of the Superior Court of New Jersey, Mercer Vicinage. During his clerkship Mr. Barbati handled numerous complex and novel substantive and procedural issues arising from complaints in lieu of prerogative writs, orders to show cause, and motion practice. These include appeals from decisions by planning and zoning boards and local government bodies, bidding challenges under the Local Public Contract Law, Open Public Records Act requests, the taking of private property under the eminent domain statute, and election law disputes. In addition, Mr. Barbati, as a certified mediator, mediated many small claims disputes in the Special Civil Part.

Mr. Barbati received a Bachelor of Arts degree in history, magna cum laude, from Rider University in Lawrenceville, New Jersey. Upon graduating, Mr. Barbati attended Widener University School of Law in Wilmington, Delaware. In 2007, he received his juris doctorate, magna cum laude, graduating in the top five percent of his class. During law school, Mr. Barbati interned for the Honorable Joseph E. Irenas, Senior United States District Court Judge for the District of New Jersey in Camden, New Jersey, assisting on various constitutional, employment, and Third Circuit Court of Appeals litigation, including numerous civil rights, social security, and immigration cases.