Corzine predicts budget challenges

April 3, 2008 1:51:02 PM PDT
Gov. Jon S. Corzine warned Thursday that he may need to sharpen his budget ax and that it could prove challenging to meet the state's July 1 budget deadline. State government closed for a week in 2006 when the state constitutional deadline to pass a budget was missed amid a dispute over increasing the sales tax. This year, Corzine proposed $2.7 billion in cuts that have alarmed lawmakers, including slashing funding for New Jersey towns and cities, with small towns targeted for steepest cuts.

"My own hope is we accelerate this process and stay away from that July 1 deadline," the Democratic governor said.

Making things worse are current economic conditions. Corzine on Thursday estimated economic problems may force him to seek more cuts as he tries to fix troubled state finances.

"We have to be thinking about the reality of $250 million to as much as $500 million additional falloff in revenue," Corzine said.

Corzine has proposed cuts in state funding for property tax rebates and state aid for municipalities, hospitals, college and universities and nursing homes. He wants to abolish three state departments, cut 3,000 state jobs and implement new and higher health care fees for the poor and elderly.

Corzine said legislators can propose other cuts, but he won't approve increasing spending beyond the $33 billion he's proposed.

"It's going to be a very challenging effort given the challenging environment," Corzine said.

The governor's caution come as legislators continue lamenting proposed state aid cuts for towns and cities and plans to abolish the agriculture department.

The municipal cuts are a leading issue, with mayors, lawmakers and residents alleging they would lead to property tax increases and Corzine insisting towns should look to consolidate and share services to try to save money.

Assembly Budget Chairman Lou Greenwald expressed dismay the administration is nowhere near finalizing a new plan to decide state aid for towns and cities. He noted a law passed last year required new municipal efficiency standards by last month to help quell property taxes.

But Joseph Doria, the state Community Affairs commissioner, said they won't be ready until next year because they're very complicated.

Assemblywoman Marcia Karrow, R-Hunterdon, argued small towns are often most efficient.

"We've cut out all this local aid without any way to know if it is fair, and I certainly don't believe it is," Karrow said.

On Wednesday, Assembly Speaker Joseph Roberts Jr. came out against Corzine's plan, saying state aid should be based on efficiency, not population, and Greenwald wasn't pleased it could take months to get those efficiency standards.

He deemed the proposed municipal cuts "the number one issue in the state."

"I see us wasting another year," said Greenwald, D-Camden.

"All we've wasted so far is time. Time is money. The money we have wasted has gone into a continual black hole of bureaucracy and waste."

Corzine wants to merge agriculture services into other departments, but farmers and legislators claim the move would cripple the industry.

"I don't think this is as well-thought out as it should have been," Assemblyman John Burzichelli, D-Gloucester, told acting Treasurer David Rousseau at a Thursday hearing.

Not everyone was convinced the move would hurt.

"Is there a Jersey tomato that won't make the ground?" asked Assemblyman Joseph Cryan, D-Union.

Responded Rousseau, "Not that I'm aware of."