Corzine calls for 'choices we might not otherwise make' in budget address
By DEREK HARPER Statehouse Bureau, 609-292-4935

Published: Wednesday, March 11, 2009
http://www.pressofatlanticcity.com/185/story/425145.html

Gov. Jon S. Corzine proposed a $29.8 billion budget Tuesday that would slash state spending by 9.4 percent but cushion the blow to the state's most vulnerable residents, the governor said.
"Even as we cut the government in unprecedented and historic amounts," Corzine said in his budget address to both houses of the state Legislature, "we are doing so in the right way - the way that sustains our abiding commitment to those core values ... nurturing our children, honoring our seniors and protecting the most vulnerable."

The budget document estimates that without cuts or adjustments, the $32.9 billion budget approved in June would grow to $35.7 billion next year. But at the same time, the state expects to collect just $28.6 billion.

To make up the difference, the election-year budget proposes $3.6 billion in cuts or other spending reductions or deferrals, relies on about $1.1 billion in new taxes or fees, and uses $2.2 billion in federal stimulus spending and about $199 million in surplus funds.

Corzine's budget increases spending for grade-school education and children's health programs, while keeping the state's property-tax rebate programs largely intact for senior residents.

At the same time, it cuts about 850 programs, calls for a one-year, 0.75 percent tax increase on state residents earning more than $500,000 and halves the income eligibility for property-tax rebates for non-senior citizens.
It increases the nation's highest $2.575-per-pack cigarette tax by an additional 12.5 cents per pack, and raises taxes on liquor and wine by 25 percent.

The budget calls for a new tax on all lottery winnings in excess of $10,000 and extends a 4 percent corporate business tax surcharge set to expire this year.

"The unprecedented circumstances of our national economic crisis require choices we might not otherwise make," Corzine said in his address. "Our responsibility requires us to have the courage to meet these challenges, deliberately, honestly, with compassion and good judgment. And that is precisely what we have done in crafting this budget."

State legislators in southern New Jersey said the austere budget was dictated by the times.

"It's a real budget, and it's not a pretty one," said Senate Majority Leader Stephen Sweeney D-Salem, Gloucester, Cumberland. "We're doing what the public wants. We're spending less money.

"There is no sunshine in this room today," Sweeney added. "None at all."

Sen. Jim Whelan, D-Atlantic, said he expected worse.

"You can't plug a $7 billion gap - which is what we're looking at - without everyone feeling some pain," Whelan said. "You can do it with smoke and mirrors; that's the way we used to do it. We can't do it that way anymore."

While Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said there was a lot of good in the spending plan, "Currently as it's constructed, I can't support the budget," he said, citing new proposed taxes as well as cuts to tourism and beach replenishment programs.

At the same time, Assemblymen Daniel Van Pelt and Brian Rumpf, both R-Ocean, Burlington, Atlantic, called for reducing the size of government. Van Pelt advocated layoffs.

"The state of New Jersey does not have a revenue problem," he said, adding later that it has "a spending problem."

Others said Corzine missed the mark.

"We're not targeting where we should," said Assemblyman John Amodeo, R-Atlantic. "We should eliminate health care benefits to part-time legislators."

The largest single reduction to the state's base budget is an $895.3 million cut to state pension funding, which apparently includes a $564.7 million reduction to state teacher pension fund contributions.

Also likely to be controversial is a proposal to cut some property-tax programs to save the state an additional $517.1 million.

The budget eliminates property taxes as a state income tax deduction, which the nonpartisan Office of Legislative Services said would yield between $500 million and $580 million in savings. An analysis of 2006 returns found eliminating the deduction would affect about 1.6 million filers, costing them an average of $300 each.

Lawmakers were uneasy with this.

"I don't know that we're sold on eliminating that deduction," said Assemblyman John J. Burzichelli, D-Salem, Gloucester, Cumberland. "It may not survive."

Sen. Christopher Connors, R-Ocean, Burlington, Atlantic, said the proposal was startling. "You can't eliminate the property deduction from taxes. That'd be devastating."

Assemblyman Vince Polistina, R-Atlantic, echoed Connors.

"It sounds to me like he plans to finance this on the backs of middle-class New Jersey," Polistina said. "So that means it is going to punish every single person in this state that owns property."

The budget also keeps property-tax rebates for seniors citizens earning less than $150,000, while halving that eligibility for everyone else for one year to $75,000.

Budget documents estimated the average senior property-tax rebate check would be $1,200 next year. Checks to non-senior households earning less than $50,000 would average $900, while those earning between $50,000 and $75,000 would average $700.

This is down from this year, when checks averaged $1,115 for homeowners earning as much as $100,000, $665 for those with incomes between and $100,000 and $150,000 and were eliminated for those earning more than $150,000.

Corzine blamed the ongoing economic downturn and called for restoring the rebates when state finances stabilize. The problem, he said, were too many layers of government that must be cut or combined.

"But in the meantime, however, rebates remain the primary tool by which the state can ease the property-tax burden on individual citizens."

Renters' rebates, which averaged $80 last year, remain intact.

While the budget reduced the limits on property-tax rebates, budget documents said that more than two-thirds of people getting them last year would continue to receive them.

Furloughs and salary freezes for state and college employees would save an additional $418.5 million.

Published reports prior to the address said the state could furlough workers one day per month for the next year, or if unions do not agree, lay off several thousands workers. Corzine's address briefly mentioned furloughs but not layoffs, which might suggest the issue had been settled.

Not so, said Bob Master, spokesman for the Communication Workers of America, the state's largest public employee union.

Master said while there had been some "informal exchanges of ideas which were not terribly productive" no negotiations are currently scheduled. As for layoffs, he said, "I don't believe this is a settled question but I think you need to speak to someone on their side."

Corzine spokesman Robert Corrales declined comment, saying state Treasurer David Rousseau would address the question at a news conference today.

Of local interest, state beach replenishment spending will decrease from $25 million to $18.75 million, while tourism funding is budgeted to decrease from $10 million to $7.5 million.

In his speech, Corzine cast it as prioritizing.

"We didn't want to cut funding for tourism advertising and beach replenishment, but we chose to maintain safe neighborhoods, safe highways and homeland security," he said.

Van Drew said the cuts reduce funding below a "poison pill" threshold and would prevent the state from collecting taxes that fund the programs. As such, they would require legislative changes for enactment.

Assemblyman Matt Milam, D-Cape May, Cumberland, Atlantic, said he wondered why the governor targeted this.

"You don't cut a revenue stream," Milam said. "When I'm sitting in my living room and see a commercial about Delaware and Maryland beaches, I want people in Maryland to see commercials about our shore."

E-mail Derek Harper: DHarper@pressofac.com