No deal yet on N.J. budget

June 19, 2008 5:27:17 PM PDT
Democratic lawmakers were unable to resolve differences Thursday on legislation to adopt the state budget, revise public worker benefits and borrow money for school construction. After several hours of private meetings, Senate Budget Chairwoman Barbara Buono said legislators will return Friday to try again to advance legislation as the July 1 budget deadline nears.

Buono said they were trying to resolve differences in legislation that would implement the budget, cut benefits for newly hired government workers and teachers and approve borrowing up to $3.5 billion for school construction.

An Assembly committee Thursday advanced the $32.8 billion budget plan amid criticism the cost-cutting proposal would cut property tax rebates and hospital aid, but the Senate committee never followed suit.

And legislators never got around to considering plans to cut taxpayer-paid benefits for new state and local government workers and teachers and plans to borrow without voter approval up to $3.5 billion for school construction, largely in cities.

Before the Assembly panel voted, Matthew Shapiro, the New Jersey Tenants Association president, protested the plan would cut rebates for renters from as much as $350 to $80. Rebates help residents with the nation's highest property taxes.

"We consider it to be immoral," Shapiro said.

Assembly Budget Chairman Lou Greenwald, D-Camden, cited state fiscal woes.

"The taxpayers of New Jersey want government to live within its means, even if it results in some pain," Greenwald said.

But Assemblyman Joseph Cryan, D-Union, said cuts would hit Union County hospitals hard.

"I really have a problem with this budget," Cryan said. "I really do. We've got a lot of work to do before Monday."

The state last missed the budget deadline in 2006, prompting a government shutdown.

Democrats control the Legislature.

Republicans decried the spending plan.

"The budget will simply shift costs from the state to the local level, which will hurt property taxpayers," said Assemblyman Joe Malone, R-Burlington.

Businesses avoided a tax increase when Democratic Gov. Jon S.

Corzine Thursday transferred $260 million in surplus money to the state unemployment benefits fund. Legislators and governors took $4.7 billion from the fund since 1993 for other uses, depleting it so low an automatic tax boost loomed.

"Allowing financial sins of the past to trigger a tax hike on businesses facing a recession would be counterproductive," Corzine said.

The budget would also cut funding for nursing homes and colleges, extend a utility tax, offer retirement incentives to state workers, deny a funding increase to nonprofits that care for the disabled and poor and abolish the state commerce and personnel departments.

Assembly and Senate committees advanced the utility tax extension despite business complaints.

"New Jersey ratepayers cannot afford an extension," said Sara Bluhm of the New Jersey Business & Industry Association.

But Buono noted the extension would raise $62 million to provide some funding for hospitals, nursing homes and Medicaid.

"We have a lot of difficult choices," said Buono, D-Middlesex.

"This is one of them, but I think it is the right choice to make."

The budget would take $9 million from a shore protection fund to keep state parks open, a move criticized by Republicans.

"Under no circumstances should shore protection be pitted against the continued upkeep of state parks," said Sen. Leonard Lance, R-Hunterdon.

But Democrats said the fund has more money than needed and it was reasonable to shift money to similar public uses.

The budget also would include $8 million to begin providing health insurance to more low-income parents and require every state child have health insurance.

Several key legislators back reducing benefits for newly hired government workers and teachers to help pay for Corzine's plan to save $91 million by getting 2,000 state workers to retire. The retirements would save salary but increase retirement costs paid by taxpayers.

The bills to reduce benefits for new hires are opposed by public worker unions. Corzine hasn't committed to the benefit cuts, saying Thursday he worried they would hurt people like cafeteria workers and school crossing guards.

The construction money would restart a state Supreme Court-ordered building program that has already cost $8.6 billion but been stalled by mismanagement.

But some lawmakers object to borrowing without first asking voters.

Corzine said the state cannot ignore the court order, cited shoddy conditions in city schools and argued school construction would stimulate the economy.

"I'm pretty fired up about the fact that we need to move forward on this," Corzine said.

New Jersey has $32 billion in debt, making it the nation's fourth-most indebted state.