The Democratic governor also emphasized he remains committed to using state aid as a tool to reward cities and towns that share services. Corzine believes many communities can save money and cut property taxes by sharing services such as police.
Speaking to about 100 officials from cities and towns with more than 10,000 residents, Corzine defended his plan to cut state aid for municipalities by 10.5 percent as part of his $33 billion budget proposal. The plan seeks $2.7 billion in spending cuts to try to right state finances plagued by debt and sagging revenues.
"There really is a fiscal crisis," Corzine said. "I wish I could say there wasn't or it didn't exist but it does."
He told the mayors he found it "hard to understand" how his proposed cuts would lead to higher property taxes. New Jersey's property taxes average $6,800 per homeowner - twice the national average, and Corzine's plan also calls for reductions in property tax rebates for more wealthy homeowners.
He urged municipalities to make tough spending choices and said proposed school aid increases makes it "very hard to argue" property taxes must increase.
Local officials weren't convinced.
"I think that it's wishful thinking at best," East Orange Mayor Robert L. Bowser said of Corzine's insistence that property taxes need not increase.
Corzine's Thursday meeting with mayors came a day after his budget's first public hearing, at which many citizens and local officials complained his plan would make New Jersey more unaffordable.
On Thursday, Clark Mayor Sal Bonaccorso said the state aid cut would double municipal property taxes in his Union County community, while Richfield Park Mayor George Fosdick said Corzine's plan to push shared services won't save much. He said shared services in his town save about $22.90 on an $8,000 tax bill.
"Shared services will not produce the kind of savings the taxpayer will expect," Fosdick said.
But Corzine said it could save significant money "if it's done on a grand scale across the state."
Corzine has proposed the largest funding cuts for towns with fewer than 10,000 residents. Under his plan, towns with 5,000 to 10,000 residents would see sharp aid reductions, while towns with less than 5,000 people would see aid eliminated.
Small towns will instead be eligible for grants to share services or merge with other towns.
Corzine on Thursday said phasing-in such cuts would mean finding additional cuts in other areas.
"I'm open to it, but we haven't heard any suggestions," Corzine said.
"We have $33 billion roughly, so if there are other cuts that they propose, should we take it out of charity care? Should we take it out of higher education?" the governor said.
Several legislators have vowed to fight Corzine's proposed cuts in municipal aid.
"It is absolutely hypocritical for the state to offer historic levels of education funding on the one hand, while cutting municipal aid on the other," said Sen. Paul Sarlo, D-Bergen, who is also the Wood-Ridge mayor. "Any benefit that middle-class municipalities would see from the new school funding formula would be erased."
A state budget must be adopted by legislators and Corzine by July 1.
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On the Net:
New Jersey Legislature: http://www.njleg.state.nj.us/
Corzine's budget suggestions page: http://www.nj.gov/governor/citizeninput/
