But the Senate budget panel shortly after 2 p.m. begin debating a bill to borrow $3.9 billion for court-ordered school construction, mostly in poor cities.
Sen. Ronald Rice, D-Essex, chairman of the 15-member black legislative caucus, said many legislators won't vote for the budget unless the borrowing is approved, but other legislators want to ask voters to approve the borrowing.
Rice told the panel the state cannot afford to wait for voters to consider the borrowing in November. He said doing so would miss the summer construction season and lead to higher building costs.
"This is a bill for children, children who cannot vote in New Jersey," Rice said. "They have great expectations from us."
Republicans said asking voters to approve the borrowing was vital.
"The children of this state deserve a quality education, but that is no excuse for squandering state resources or ignoring the will of the people," said Senate Minority Leader Tom Kean Jr., R-Union.
Gov. Jon S. Corzine has backed requiring voter approval for new borrowing, but said the school construction is different because it's court-ordered. The state Supreme Court in 1998 ordered the state to pay for new schools in the poorest school districts.
Democrats who control the Legislature were unable Thursday to resolve differences over school construction, cutting benefits for new government workers and teachers and advancing a $32.8 cost-cutting budget plan. They returned Friday to try again in hopes of adopting bills Monday, a week before the state's July 1 constitutional budget deadline.
The Assembly budget committee Thursday released the $32.8 billion budget proposal but the Senate never took action.
Lawmakers never acted on the pension bills. Several lawmakers have also linked support for the budget to whether the pension measures also pass.
Sweeney on Thursday night introduced legislation that would reduce the number of paid holidays from 13 to 12 for all state and local government employees.
As New Jersey lawmakers struggled to resolve differences, Corzine cut short a trip to Illinois to try to help end the stalemate. Public worker unions, meanwhile, pressed their opposition to proposed benefit cuts.
Corzine on Friday joined Democratic presidential candidate Barack Obama for an economic round-table discussion in Chicago, but Corzine spokesman Sean Darcy said Corzine was returning to Trenton to try to resolve the impasse.
The $32.8 billion budget plan backed by Corzine and legislative leaders cuts funding for several key services, including hospitals, municipalities, colleges and nursing homes. Corzine Thursday acknowledged the cuts would be painful, but said they are necessary. Republicans said the budget simply passes state costs onto property taxpayers.
Corzine Thursday continued to be noncommittal to the pension reforms some legislators insist are needed to help pay for retirement incentives Corzine wants to offer to 2,000 state workers.
"I think we have to be very careful about unintended consequences," Corzine said.
Public unions oppose the cuts. The New Jersey Education Association, the state's largest teachers union, on Friday protested at the offices of 30 senators.
"We will not tolerate - not now, not ever - any attempt to scapegoat teachers, bus drivers, cafeteria workers, crossing guards and other school employees for sins they have never committed," NJEA President Joyce Powell said.
Carla Katz, president of Communications Workers of America Local 1034, which represents 10,000 state workers, had similar sentiment.
"The union maintains the position that we have for the last few weeks on this issue - that legislating these changes not only violates our contract, but these bills paint with too broad a brush and don't specifically target pension abuse," Katz said.
