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GSCS was in the Assembly gallery to hear Governor Corzine's-the mood was sober and the message somberly received.
3-22-07 Articles re Governor Corzine’s Budget Message
Uneasy lawmakers applaud only 3 times
Wednesday, March 22, 2006
BY JEFF WHELAN AND JOE DONOHUE
Star-Ledger Staff
Conceding that he has "no magic bullet," Gov. Jon Corzine yesterday delivered a grim budget address that proposed a painful mix of tax increases and spending cuts that he said are necessary to avoid a bleak future for the state.
The former Wall Street CEO used a rapid-fire, businesslike approach to lay out the facts and figures behind the state's chronic multibillion-dollar budget problems and his plans to address them -- including raising the sales tax from 6 percent to 7 percent and increasing other taxes on hospitals, alcohol, tap water, luxury cars and cigarettes.
He also called for $2 billion in spending freezes and cuts, including elimination of 1,000 state jobs and 75 programs.
Corzine didn't take time to stop for applause, and hardly received any. In a remarkable departure from recent history, his 31-minute address was interrupted by clap ping only three times, including once while he joked about flubbing a line. That moment relieved a little of the tension -- but not much -- among anxious Democratic lawmakers uneasy about political fallout from his plans.
"To those who thought my financial background would mean I had some magic bullet in my holster to balance the budget, I am sorry to disappoint you," Corzine said before a packed Assembly chamber at the Statehouse. "My answer is as simple as old-fashioned arithmetic. We can't keep spending more then we take in."
Hospital officials railed against a $430 million tax increase and aid freeze, saying the moves would wreak havoc on their finances. Town and school officials said plans to virtually freeze their state aid would result in property tax increases. Academic leaders predicted cuts in higher education funding would result in steep tuition hikes. The biggest spending cut -- $193 million -- was in so- called "Christmas tree" items, money for local projects coveted by lawmakers.
Corzine's fellow Democrats who control the Legislature immediately expressed reluctance to raise taxes. Republicans criticized the governor for talking about austerity while proposing the largest state budget in history: $30.9 billion.
"It is unfair for the governor to expect our state's taxpayers to ac cept these massive tax hikes when the size of the state budget is increasing by nearly $3 billion," said Assemblywoman Alison Littell McHose (R-Sussex), a Budget Committee member.
Corzine estimated his proposed sales tax increases would raise $1.4 billion and cost the average family with an income of $84,000 about $260 per year. In addition to increasing the rate, he wants to expand the tax to new items such as golf and health club memberships, shipping services and music and video downloads.
He had been considering an in come tax increase, but said those rates were already at a "high level" and that raising them further could negatively affect the state's economy.
Assembly Speaker Joseph Roberts (D-Camden) said lawmakers would look for steeper spending cuts before agreeing to any tax increases. Senate President Richard Codey (D-Essex) said that if revenues improve over the next few months, the Legislature likely would scrap the sales tax increase.
"I think everything is on the table in terms of negotiations and compromise," said Codey, who, like Roberts, credited Corzine with delivering an "honest" speech that made tough choices.
Assemblyman Kevin O'Toole (R-Essex), a member of the Budget Committee, predicted the Democratic Legislature would never let the sales tax increase stand: "If you ask me, it's political suicide."
Corzine sought to address his critics head-on. He said the spend ing increase "is not the result of new initiatives on services or aid ... it reflects already legislated, mandated, negotiated and inflated costs." He said he was using $500 million in one-shot gimmicks, down from an average of $2.8 billion over the past four years as his party has controlled the Statehouse.
The governor said he was willing to compromise, but challenged critics to identify their own spend ing cuts, and ruled out more tax increases or one-shots. Even if the Legislature adopted all his propos als before approving the final budget in June, he said, the state would face another $1.5 billion budget gap next year because of growing expenses.
"New Jersey's state finances need to get back onto a sound long-term footing, consistent with the values of our people, and I am determined to deliver that end through our final budget," he said, adding that the days of "stuffing bills into our desk drawers, covering up the crisis are over."
Corzine's spending blueprint sacrificed some of his own priorities and campaign promises. After promising to more than double property tax rebates for most homeowners, he instead proposed a modest 10 percent increase.
As a candidate, he also pledged to fully fund the state's obligation to its pension system, but instead proposed funding 70 percent. That means putting $1.5 billion in cash into the fund, up from $1.1 billion last year. He called it a "good-faith effort to put us on a path toward restored integrity in our state retirement system."
Codey, however, said that figure may be too high, and administration officials privately acknowledged they would consider negotiating it down. Other lawmakers signaled that the alcohol and water taxes -- which would only raise a combined $24 million but potenti ally invite public opposition -- were likely targets for elimination.
Corzine's proposed investments were modest: $50 million for programs in areas such as children's health, domestic violence and anti- gang initiatives, and $80 million in one-time capital investments in homeland security and parks.
The governor certainly couldn't be accused of playing to the crowd, or the cameras. He walked in wearing a blue pinstriped business suit, carrying his speech in a black binder. He wrote it himself and acknowledged it lacked "elaborate ar guments or fancy rhetoric." He chose to read from the text rather than a TelePrompTer, often glancing downward instead of making eye contact with his audience.
"This is a governor who is very heavy on substance and very light on flash," said Roberts.
The three bursts of applause Corzine received contrasted with 51 for Gov. James E. McGreevey two years ago, when he proposed substantial spending increases fueled by a growing economy and borrowing.
"This guy really is an outsider. This guy is different. He's not with the
Former Democratic Gov. Jim Florio said, "What he's talking about is an intellectually honest approach to government. For the first time in 12 years, we're getting back on track with fiscal integrity and responsibility. You expect people to be applauding these messages?"
Florio lost his re-election bid in 1993 after raising sales and income taxes and triggering a populist re volt.
Staff writers Josh Margolin and Susan K. Livio contributed to this report.
THE BUDGET & YOU
Local leaders expecting property taxes to soar
Wednesday, March 22, 2006
BY TOM HESTER AND JOHN MOONEY
Star-Ledger Staff
Gov. Jon Corzine's property tax rebate increase is very modest -- about $35 a household. At the same time, the governor's proposed $30.9 billion budget doesn't give towns and schools very much more in state aid.
Put it all together and it looks like Corzine's first year will be a rough one for property taxpayers.
"This will lead to a 7 percent to 8 percent property tax increase," said Senate Minority Leader Leonard Lance (R- Hunterdon). "This will be a terrible burden on the people of
In his speech, Corzine acknowledged the modest levels of rebates and state aid, and vowed to make property tax reform "my No. 1 priority once the state budget has been brought into balance."
Corzine's budget would cut aid to municipalities by $25.5 million from what was spent in the current budget. And while the poorest schools are in line for $100 million more and added dollars for preschool, overall education aid will not rise. State aid has remained the same for the past five years while local costs have skyrocketed.
"Any reduction at all in municipal funding is going to have a dramatic impact on local property taxes," said William G. Dressel, director of the New Jersey State League of Municipalities. "Even level funding is in essence a cut."
"The bad news now is we have to convince our local communities (taxpayers) that the absence of new state money means they will have to step up once again," said Edwina Lee, director of the New Jersey School Boards Association.
CUTS COMING EVERYWHERE
Corzine's budget would cut $11 million to 14 municipalities that use a program encouraging them to share services. It cuts $13 million in extraordinary aid, which went to 140 municipalities last year.
Corzine also wants towns without police departments to pay $24 million to cover the cost of State Police protection. This affects 98 towns, including 40 in Hunterdon, Warren and
Corzine acknowledged he wanted to provide more for property tax rebates, but could not because of the huge budget deficit.
Non-senior property owners will see a hike of $30 to $45 in rebates while senior citizens get a $125 increase. The average property tax bill rose $350 last year, according to a Star-Ledger analysis.
Denville Mayor Gene Feyl said even if lawmakers restore some aid, towns face big increases in pension and health insurance costs for their employees. In Denville, the cost could go as high as $373,000, Feyl said. In
"The property tax is an insidious thing," Feyl said.
State Community Affairs Commissioner Susan Bass Levin, Corzine's contact to local government, said the hope for permanent property tax relief may come from a special legislative session and a constitutional convention on the issue.
"Governor Corzine has made it clear there needs to be a long-term solution to property tax relief," Levin said. "We are not going to solve the problems created in the state over the last 30 years in one budget."
Lee said reform will be tough.
"If he (Corzine) thinks that closing the budget gap was difficult, property tax reform and how that will happen will be a very heavy lift," she said.
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Copyright © 2006 Asbury Park Press. All rights reserved. |
Lawmakers, lobbyists, others weigh in on proposed budget
Posted by the Asbury Park Press on 03/22/06
GANNETT STATE BUREAU
"The governor's budget proposal contains many cuts and fiscal management changes that
— Assemblyman Michael J. Panter Jr., D-Monmouth
"The governor proposed that the state make a "down payment on reform,' and I think that has to be a major priority in these budget negotiations. We need to spend the funds on the reform infrastructure, such as staffing for our state's watchdog agencies, to make real top-to-bottom reforms, and craft a government that is a lean entity that puts the people of
— Sen. Ellen Karcher, D-Monmouth
"It took Gov. Corzine less than 90 days in office to break his central campaign promise. He has abandoned already overburdened taxpayers by failing to provide significant property tax relief."
— Assemblywoman Jennifer Beck, R-Monmouth
"There are never any easy answers when developing a budget proposal. However, it is shameful that homeowners will receive a meager rebate check while, once again, having their property tax bill dramatically increased."
— Assemblywoman Amy Handlin, R-Monmouth
"The governor was brutally honest in outlining the state's fiscal realities and the painful choices associated with presenting a balanced budget without gimmicks."
— Assembly Speaker J. Joseph Roberts Jr., D-Camden
"I want to commend Gov. Corzine for his hard work. He dove head first into this fiscal crisis, which is no easy task. He's worked hard to bring this message to the public and he's leveled with the people. In the end, regardless of how painful some of our decisions may be, I think the public will appreciate this honesty."
— Senate President Richard J. Codey, D-Essex
"It was a sobering message."
— Sen. Joseph F. Vitale, D-Middlesex
"Legislators should be locked in the Statehouse and prevented from leaving until they pass meaningful reform or a citizens' convention bill for property tax reform."
— AARP New Jersey chapter statement
"Most beer drinkers are hardworking men and women who want to enjoy a beer after a hard day's work or with friends at the local bar on weekends. We believe it is unfair to single out one segment of society and expect them to pay for government services that benefit everyone."
— Jerry Mullane, lobbyist for Anheuser-Busch Cos., opposed to proposed increase in alcohol tax
"The situation could have been far worse for our public schools, but the reality is that flat state aid will make 2006-07 another year of property tax increases and service cuts."
— Edwina Lee, executive director, New Jersey School Boards Association
"We appreciate the problems that are being faced by the administration and by the Legislature as they struggle to responsibly close a massive, inherited deficit. We only hope that they, likewise, recognize how "level funding' contributes to the problems being faced by local budget makers and the property taxpayers, whom they have sworn to serve."
— William Dressel Jr., executive director, New Jersey State League of Municipalities
"After seeing the governor "solve' our bankrupt Transportation Trust Fund with more borrowing, I did not expect anything less. This budget is just another reason for people and businesses to leave
— Assemblyman Joseph Pennacchio, R-Morris
