Corzine to freeze state spending

January 5, 2008 1:30:22 PM PST
New Jersey Gov. Jon S. Corzine will vow Tuesday not to let spending increase in the next budget as he unveils his plan to tackle state fiscal woes by increasing highway tolls, a person close to the governor told The Associated Press. Corzine's dramatic promise to freeze state spending at this fiscal year's $33.47 billion level will come with the state facing a projected $3 billion budget deficit and amid his plans to increase state aid for schools by $533 million.

But the person, who has knowledge of Corzine's intentions but requested anonymity to not upstage the governor's Tuesday speech to the Legislature, said Corzine wants to emphasize his goal of revamping long-troubled state finances.

The official close to Corzine described the plan to freeze state spending "as the initial step to resetting the clock on the state's finances."

If the Democratic governor keeps the state budget at this fiscal year's $33.47 billion level, it will mark only the second time since 1992 that state spending hasn't increased from one year to the next.

Under his financial restructuring set to be detailed Tuesday in his State of the State address, the Democratic governor, a former Goldman Sachs chairman, wants to eventually pay down at least $16 billion in debt and find money to improve aging roads and bridges.

He hasn't said how much tolls may increase on the Garden State Parkway and New Jersey Turnpike, but the state transportation commissioner has said a 45 percent increase is needed just to widen the turnpike and fix bridges on it and the parkway.

State spending has increased from $27.9 billion to $33.47 billion since Corzine took office in January 2006, though Corzine has said most of that increase has come from obligated health care and public worker retirement benefit costs.

The projected $3 billion budget deficit is for the fiscal year that starts July 1.

The increased public school aid is part of Corzine's proposed new school funding formula set for final Monday votes by the Legislature.

Corzine had already signaled his intent to control spending.

In October, Corzine asked his Cabinet to find ways to cut $3 billion from the state budget, though a Treasury spokesman recently said no decision has been made on what to cut. Corzine is scheduled to introduce his budget to the Legislature on Feb. 26.

New Jersey's debt has doubled since 2000 and makes the state the nation's fourth-most indebted state. Most of that debt was rung up before Corzine became governor through borrowing to, among other things, provide pensions for public workers and balance the state budget.

Debt consumes about 10 percent of the current state budget, a figure Corzine predicts will rise in years ahead and prevent the state from investing in vital unmet needs such as the $13.6 billion in needed bridge repairs.

Tackling state spending may ease concern about increased tolls.

Speaking earlier this week, Philip Kirschner, president of the New Jersey Business and Industry Association, said businesses on Tuesday will look for specifics and signs Corzine is controlling state spending before raising tolls.

"All people, whether they're business people or not, would feel better if they were confident the state had done everything it could to rein in spending that is not essential," he said. "It (toll increases) would go down a whole lot easier."

The Garden State Parkway has had one toll increase and the New Jersey Turnpike four in the last 50 years.

In 1989, parkway tolls increased to 35 cents per toll booth.

The last turnpike toll increase was in 2003, a 17 percent hike.

The average cash-paying automobile driver pays $1.92 per turnpike trip.

The Garden State Parkway is the nation's busiest toll road and the New Jersey Turnpike the nation's fifth busiest, according to the International Bridge, Tunnel and Turnpike Association.