Untitled Document

Budget

The FY 2003 spending plan invested in key priorities: homeland security, cancer research, children afflicted with autism, municipalities and education. We kept a promise not to increase sales or property taxes and to protect property tax relief programs. This budget was comprised of the hard work, wisdom, compassion and commitment of many.

The FY 2003 budget forced us to live within our means and called for a 2.1 percent spending increase to provide what the taxpayers needed. It protected rebates for our seniors and working middle-class families, averted cuts in aid for schools and municipalities, and protected communities and families from economic harm.

We had to ask all state departments to do more with less money and restore fiscal responsibility to a state that had all but forgotten what "fiscal responsibility" meant.

With continued Democratic efforts we stopped runaway spending from the previous administration and put the state's affairs in good order. The budget put a premium on fairness and compassion, recognizing that there must be some give and take for the benefit of all New Jersey residents.

This year, we are still faced with the devastating effects of years of fiscal irresponsibility. We will follow the same guidelines as last year, putting the issues of New Jersey residents first. This budget cannot be balanced on their backs.

We have to create a balanced budget, while tackling major issues such as auto insurance, medical malpractice and sprawl. We have to restructure DYFS and the DMV. All of these issues are connected to the budget and must be carefully considered throughout the process.

Currently, projected revenues from the Office of Legislative Services are not promising. We had a loss of one billion dollars of non-recurring and accelerated revenues. Instead of having a positive net revenue change, we will end up with a shortfall of $250 million.

All other revenues are substantially reduced. Updated estimates reflect a $500 million shortfall. We are owed $440 million in federal intergovernmental transfer revenue for state nursing homes and an additional $227 million in federal reimbursements for our nationally recognized prescription drug programs (PAAD). With the Office of Legislative Services' estimate of $250 million dollars less in federal revenue than expected, and we end up with a total revenue loss of $1.417 billion.

Spending pressures will continue. There are certain services that cannot be cut. We must continue the NJ SAVER program, state employee salary steps, educational funding, PAAD and the new Senior Gold. We still have to revamp the Department of Motor Vehicles, supply the Transportation Trust Fund, pay state employee payroll taxes, and many other mandated programs. All totaled, this will amount to approximately $3.160 billion in moneys that we have to allocate.

Spending pressures for the current budget are up 3.1%. This is one of the smallest increases in the entire country, putting to rest rumors of spending being up by $2 billion or up by 9%. In fiscal year 2002, sales and income tax receipts increased while corporate tax receipts declined. Overall, revenue collection declined $393 million from the previous year. Despite a significant decline in revenues in FY 2002, we managed to keep the budget balanced, preserve property tax relief, and continue funding for vital programs and services.

While we expect the corporate business tax to meet the new Administration's target for FY 2003, we have frozen $219 million in spending to offset a $115 million decline in revenue projections. Our preliminary bottom line looks bleak. We are faced with a five billion dollar problem.

We again must tell New Jersey residents that we are in dire straits. We have to make hard, difficult decisions. Unlike the federal government, we cannot operate with a deficit.

As of now, our strategy must be scaling back growth or keeping spending flat. The governor has insisted that there will be no increase in income or sales taxes. We must focus on working to reduce the size of government and to require that state government lives within its means.

But there are still options out there. We can again borrow against the tobacco settlement. We must invent new ways to raise money as we did last year with the tax amnesty. Our tax amnesty program was expected to bring in $150 million in unpaid taxes. It allowed people and businesses to pay past-due taxes without interest or penalty. This program was such a success, that instead of bringing in, the projected, $150 million; it brought in $255 million. These are the kinds of initiatives we must continue to explore. We need new ideas for a new New Jersey.

This year we must apply more funding to municipalities and school districts, which did not receive increased funding in last year's budget. It is too early to declare how we are going to accomplish this, but the needs of our children must be addressed. In this budget, we must provide more school aid in order to provide our children with the proper education they so truly need to prepare them for the future. A small piece of this would be an additional $200 million towards New Jersey's $8.6 billion school construction program.
We have entered yet another year of historic budgetary difficulties in the State of New Jersey. The process will test whether our great State can survive this turmoil for the second year in a row. We as a Legislature, are charged with balancing a depleted budget stemming from many issues. National economic downfall, lack of federal funds and a decade of irrational Republican borrowing and spending without foresight for the implications, have caused all of us to dig deeper into our pockets. The Legislature, as each citizen has done in his or her own household, must now create new ways to maintain the day-to-day operations of the State.

The FY2004 budget will be a stricter version of the FY2003 budget. The Governor and the Legislature have made a commitment to the residents of our State not to balance the budget at their expense. We intend to keep that promise. We will devise the most fair and reasonable solutions. In order to do this, funding for programs that we all have fought for and feel very passionately about will have to be cut. Budgets for the individual departments within the State will have to be cut. In order to create the most just budget and to plug the holes left by the fiscal irresponsibility of our predecessors, sacrifices must be made across the board.

Over the past few months, my colleagues and I have met with State departments, organizations and residents. We have held public committee hearings with testimony from New Jersey residents, businesses and organizations. The purpose of these meetings was to ascertain what we, as a legislature, must do to produce the best possible solutions to these problems and to learn from those who will be directly affected by our decisions.

As we did last year, we must inform the people of New Jersey that the state has run into hard times. We are in the midst of solving the worst fiscal crisis our state has ever endured; one inherited by a new Democrat Majority in the Assembly and a new Democrat Governor. We have confidence in the good judgment of the residents of this state. We know that they will understand and support the state-spending plan. Last year, the hard decisions were forced on us, but we acted responsibly and prudently. We crafted a solution to escape a huge budget deficit. This year we intend to do the same, knowing that there is a light at the end of the tunnel.

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