N.J. hopes lottery can balance budget

May 13, 2008 3:52:39 PM PDT
New Jersey will try to boost state lottery sales to help make up for declining tax revenues and balance next fiscal year's cash-strapped budget, the state treasurer told senators Tuesday. But Treasurer David Rousseau cautioned against freely spending better-than-expected tax collections.

"We cannot and will not forecast that the good times will continue to roll," Rousseau said during a Senate budget hearing.

He said the state will collect $533 million more than estimated for the fiscal year ending June 30, and would collect $159 million less than had been estimated for next fiscal year amid state and national economic woes.

Though the state will get more overall money than expected, Rousseau told legislators who have decried Gov. Jon S. Corzine's proposed spending cuts that the administration is committed to using unexpected surplus to pay down state debt.

The state has $32 billion in debt, making it the fourth-most indebted state.

In the past, lawmakers have used unforeseen surplus on new programs, but Rousseau said, "The practices of the past have led our great state to the brink of financial disaster."

Corzine touted paying down more debt as he looks to fix state finances troubled by high debt and taxes and chronic deficits.

"We are sticking with spending no more than you take in, no new taxes, no gimmicks," Corzine said.

Legislators and Corzine have until July 1 to agree to a budget.

Corzine proposed $2.7 billion in cuts in February. Rousseau Tuesday proposed $70 million more in what is now a $32.8 billion budget proposal.

Corzine's plans for less state funding for property tax rebates, municipalities, hospitals, state colleges and universities and nursing homes still stand.

But Rousseau said Corzine would rework municipal aid cuts to ensure no community faces an average property tax increase of more than $100 from the reduction.

Legislators still weren't pleased, including Corzine's fellow Democrats.

"There's really no rational way in how we're restoring this," said Sen. Paul Sarlo, D-Bergen.

Also still proposed are increased fees for a senior citizen drug program, new Medicaid co-payments and no cost-of-living increase for nonprofits.

The budget proposal also still calls for eliminating the commerce and personnel departments and cutting 3,000 jobs though layoffs and retirement incentives.

"Everyone sees the challenges are agonizing," Corzine said.

"I hear the concerns that the public has, but those concerns have to put in the framework of the available funds we have."

Legislators continued questioning early retirements, worrying they would increase taxpayer-funded retirement benefits.

"I don't see the benefit," said Senate Budget Chairwoman Barbara Buono, D-Middlesex.

And Senate President Richard J. Codey, D-Essex, said he hoped the increased revenue can "ease some of the pain by offsetting those proposed cuts that will hurt people the most," such as Medicaid co-payments and hospital cuts.

Rousseau said he's ordered lottery officials to increase sales by $25 million.

The lottery has $2.4 billion in annual sales. According to The Tax Foundation, that's $769 per household, the nation's ninth highest rate.

Codey has proposed selling lottery tickets at department stores and other popular retailers and making sales available through the Internet and cell phones.

But while he's proposing increased lottery sales, Corzine also acknowledged concerns the lottery is played disproportionately by the poor.

Republicans wondered whether more budget cuts would be needed amid the national economic downturn.

"We have to be very cautious moving forward due to the fact that we are in for a rough ride," said Sen. Leonard Lance, R-Hunterdon.