Corzine Proposes $2.1 Billion in Cuts

Bergen Record
January 2, 2009
By John Reitmeyer

Governor Corzine now faces a recession-fueled budget hole of $2.1 billion and plans to cut more spending, use surplus funds and hope for help from Washington.

The governor laid out the latest news on the state's fiscal outlook in the context of the faltering economy today. He said the total fallout for New Jersey from the ongoing recession is now pegged at $2.1 billion, up from the last estimate of $1.2 billion. All state revenue sources except for the lottery are down at least 5 percent, he said.

"The pace of fall off in revenues is picking up steam each month," he said.

To dig out of the hole, the state will cut $812 million in spending this fiscal year, with employee salary raises and pension contributions among the items in the crosshairs.

Some aid programs for schools and municipalities will also be curtailed as part of the broader spending cut.
Other programs, such as cancer grants and a new voting system, will also be casualties of the economy, he said.
Corzine, a former Wall Street executive, said he and staff went "literally, line-by-line" in the budget to find places to cut.  More details about cuts will be made public Monday, he said.

The governor has also proposed using $500 million that was supposed to go toward reducing the state's debt to patch the budget hole. And his plan calls for $205 million to come out of the state's surplus fund. Another $208 million in surplus was pulled out of the previous fiscal year already, he said.

Corzine is also counting on collecting $300 million from a federal stimulus plan that Corzine and other governors are hoping the administration of President-elect Barack Obama will provide the states early this year.

If that money doesn't come from Washington, Corzine will use $325 million in surplus funds.

Corzine's plan is already drawing responses from legislative leaders in Trenton.

Assembly Budget Committee Chairman Lou Greenwald, D-Camden, called for "everyone to rally together and share the pain."
"It's about riding out this storm," he said. "No one is going to shoulder all of it, but we need everybody to pitch in."
Republicans, meanwhile, remained critical of the governor's handling of the recession, saying he's not making enough cuts to programs that have proven wasteful.

Senate Minority Leader Tom Kean Jr., R-Union, and Assembly Republican Leader Alex DeCroce, R-Morris, issued a joint statement that criticized Corzine for not embracing their ideas.

"Republicans have offered constructive spending reductions to make New Jersey affordable and government more accountable, but he continues to ignore them," the two Republicans said.