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Asbury Park Press ‘$28B proposed budget signals "new normal" for N.J.’
Star Ledger ‘N.J. lawmakers are expected to vote on Gov. Christie's budget, property tax cap plans’
The Record ‘N.J. pays the price for past budgets’
Asbury Park Press ‘$28B proposed budget signals "new normal" for N.J.’
TRENTON — A $28.3 billion state budget likely will pass the state Legislature Monday, and when it does, it will usher in a new reality for governments, schools and taxpayers in New Jersey.
Although some conservative Republicans say the budget does not cut spending enough, the final version, largely untouched since Gov. Chris Christie proposed it in March, will result in layoffs and early retirements for government workers, property tax hikes and service cuts.
And this is just the beginning, as other major issues, such as the underfunded pension system, remain pending.
"There's no painless mechanism of change, and significant change is needed," said James W.Hughes, who leads a public policy school at Rutgers University. "The structural deficit has grown so large, drastic action is needed, and the trade-off is that we will get short-term pain in terms of people losing their jobs and cutbacks in a whole range of programs."
In many ways, Hughes added, the state will never be the same: "This is the new normal."
With a budget deal struck, the only hurdle that may remain is to persuade one or two conservative Republican lawmakers to vote for the budget or find one more Democratic vote.
Democratic legislative leaders, who control both the state Senate and Assembly, had agreed to let the GOP take the lead on the budget while supplying just enough votes to get it passed and avoid a government shutdown.
Despite last-minute agreements to add money for welfare programs and to provide prescription drugs and health insurance to low-income seniors, many cutbacks stay in place.
School aid, without the help of federal stimulus funds, is down by nearly $1 billion. Aid to local municipalities is off $332 million. Aid to higher education was slashed by $173 million, which will likely send tuitions higher. Transit fares are already up.
Some 5,000 more state and local employees have so far filed for retirement this year than had filed in all of 2009. That includes 2,911 teachers and school staff.
A survey by the New Jersey School Boards Association showed that 93 percent of all school districts had planned layoffs this year, but final job loss numbers have not been compiled, a spokesman said.
The State Policeman's Benevolent Association says about 700 municipal police officers will be laid off this year, and that's in addition to 1,800 who are retiring. There are only 223 police academy graduates statewide to replace them, the PBA said.
At an Assembly Budget Committee meeting this week, Democratic Chairman Louis D. Greenwald, D-Camden, ticked off all the aid cuts and the elimination of tax credits. He said that despite Christie's rhetoric, the budget does increase taxes for residents.
"This is real life stuff, real life jobs," Greenwald said. "You want to call it a loss of benefit. You want to call it a fee. Call it what you want, it's a tax increase."
But Assemblyman Joseph R. Malone III, R-Burlington, Republican budget officer, said that with falling revenues, Christie's hands were tied. He said there will be significant political fallout, but Republicans did what was right.
"People may lose their careers for what they've had to do, but in the long run, history will be very kind," Malone said. "I was at the supermarket last night, and an elderly woman came up to me and said, "I want to thank you, and thank the governor, for having the courage for trying to straighten this mess out.' "
"If we, at this moment in time, don't have the courage, then shame on us," Malone added.
Still, after months of wrangling, significant issues remain to be decided:
The budget skips a $3 billion pension payment, which means the state pensions system, already underfunded by $46 billion, will fall further in the red. Christie and his administration have promised to propose bold pension reforms, setting up a potentially large battle later this year.
Christie continues to push his property-tax cap plan, which must be approved within weeks so that it may appear on the November ballot. If he gets that, he will have to convince voters that slowing property tax increases at 2.5 percent a year will work.
Education Commissioner Bret Schundler had sought major education reform that would change local schools and save money. But after Christie vetoed a compromise with the state's powerful teachers union over a federal grant application, the education proposals have remained under wraps.
David Rosen, budget officer for the nonpartisan Office of Legislative Services, noted that as things stand, many of the same budget issues will reappear next year.
"It's not clear which of the governor's budget solutions will address the structural deficit going forward," Rosen said.
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Jason Method: 609-292-5158; jmethod@app.com
Star Ledger ‘N.J. lawmakers are expected to vote on Gov. Christie's budget, property tax cap plans’
Published: Monday, June 28, 2010, 5:00 AM Updated: Monday, June 28, 2010, 5:53 AM
Matt Friedman/Statehouse Bureau
TRENTON — New Jersey’s heated state budget season culminates today in what leaders predict will be marathon sessions to vote on Republican Gov. Chris Christie’s tough-as-nails spending plan, a Democratic alternative to his property tax cap proposal and dozens of other bills.
Assembly Speaker Sheila Oliver (D-Essex) said she anticipates the Assembly will be debating well past midnight.
"The day has come. The day of reckoning," Oliver said. "I think that you will find a significant number of Democratic legislators who are going to want to engage in debate."
Republicans have been engaging in their own debate as Christie tries to cobble votes to get his budget passed in both houses of the Legislature, where the majority Democrats have promised just enough votes necessary, provided the governor gets every Republican to support it.
The deadline for a budget is Thursday.
"You never know how things unfold. (Today) will be an interesting day," Senate President Stephen Sweeney (D-Gloucester) said. "Right now, the Republicans are probably relieved that (today) is only the 28th, so if they can’t get their votes they have a couple days to spare."
Democrats deride the budget as unfair because of its cuts to programs for seniors, the poor and disabled, while most Republicans praise it as tough but necessary to close a $10.7 billion deficit. It slashes $848 million in property tax rebates for seniors and the disabled, $820 million in school aid and almost $450 million in munciipal aid.
"We’re at an unprecedented point in New Jersey state budget history," said Christie spokesman Michael Drewniak. "No one’s ever had to accomplish this. We wish it hadn’t been inherited in such full ferocity. What everybody needs to recognize is we should never let ourselves get back into such a position again. And that’s what the importance of disciplined reform means."
Republicans still need to work to rein in stray members. Assemblyman Michael Patrick Carroll (R-Morris) said he opposes it because it cuts proportionally more school aid from suburban districts than urban ones. On Friday, Christie Chief of Staff Richard Bagger, Chief Counsel Jeff Chiesa and Assembly Minority Leader Alex DeCroce (R-Morris) met with Carroll at a Morristown deli to persuade him to vote for it.
Carroll said he’s still unlikely to vote for the budget, though he said he might if Democrats blame Christie for an impasse.
"Are my feet set in stone? Pretty much. I don’t think this is good budget, but the Democrats could certainly talk me into it, (by blasting Christie)," he said.
Carroll added, however, that his no vote on several related bills that lift tax caps and increase fees would not change.
Democratic alternative to Christie’s proposed 2.5 percent constitutional cap but with exceptions for pension, health care and utility costs. "We’ll have the battle of the caps, I’m sure," Oliver said.
Other bills up for a vote today would delay implementation of the state’s medical marijuana law until early 2011, provide funding for women’s health clinics, decrease fees for copying public documents, give freeholder directors veto power over county authorities and authorize the state to give out $100 million in tax credits for offshore wind energy facilities.
And unlike most years, when Budget Day means the end of lawmaking for the summer, legislative leaders say there will be more action in Trenton during the hot months.
While they haven’t set schedules yet, Sweeney and Oliver said legislative committees will start meeting again either later this week or next week. Both houses plan hearings on Christie’s 2.5 percent property tax cap and his 33-bill "tool kit" package to reform civil service and collective bargaining.
Another big initiative to abolish the Council on Affordable Housing, which has passed the Senate, will not advance in the Assembly this summer, Oliver said. "It will not get a vote in committee this summer but we hope to get it to a point where we can vote on it in the fall," she said.
The Record ‘N.J. pays the price for past budgets’
Monday, June 28, 2010 BY JOHN REITMEYER STATE HOUSE BUREAU
A series of tax increases, fee hikes, bonding, one-shot gimmicks and, more recently, a boost of federal stimulus aid has helped add well over $10 billion to the state budget over the last decade — far above the increase in the rate of inflation since 2000.
The surge in spending by governors who served before Christie, a Republican who preaches smaller government, helped pay for bigger property tax rebates, more education aid for public school districts, enhanced benefits for public workers and the Legislature's pet pork projects.
Now, Christie's budget, which goes before the Legislature for final approval today, will cut property tax rebates altogether for 2010, reduce state aid for schools and towns, and also take funding away from many other programs, all in an effort to return the state to fiscal health.
But even with Christie's cuts, and a more modest effort by former Gov. Jon Corzine, the $29.4 billion budget set to go into effect Thursday is still nearly 40 percent larger than the $21.5 billion budget enacted a decade ago by then-Gov. Christie Whitman.
By comparison, the rate of inflation over the same period was less than 30 percent, according to the federal Bureau of Labor Statistics. State spending in 2010 would be about $27 billion, if the budget was directly linked to inflation.
Here's a look at where the last five governors increased state spending going back to 2000.
Corzine
Corzine's largest budget topped out at $33.5 billion in 2007, a high-water mark for pre-recession New Jersey. He spent more than $2 billion on a property tax rebate program that paid out checks averaging $1,000.
Corzine also put more than $1 billion toward the state's annual obligation to the pension system for public workers, something other governors had shirked — and something Christie is avoiding this year as well.
The 2007 budget came on the heels of the shutdown of state government in 2006 over a penny increase in the state sales tax that Corzine, a Democrat, ultimately pushed through.
The former Wall Street executive also boosted school aid to near $9 billion last year with some of the $2.2 billion in federal stimulus funding. But Corzine ended the tradition of funding legislative pork projects, known as Christmas tree items in Trenton, by the time he left office at the beginning of 2010.
Codey
Corzine was preceded for one year by Senate President-turned-Gov. Richard J. Codey. His $28 billion spending plan for the 2005 budget year was billed as an end to the gimmicks and overspending practices favored by his predecessors. Codey, a Democrat who is still a state senator, even threatened to cut property tax rebates, but was able to preserve them with a late surge in income tax collections.
And he creatively kept the total spending amount for the budget year down by counting $400 million in spending on the prior year's budget.
McGreevey
Former Democratic Gov. James E. McGreevey pushed spending up to $28 billion in his last budget in 2004. He expanded property tax rebates, boosted state aid for schools and towns — items Christie cut this year — and heavily funded pork projects.
McGreevey inflated spending so high it easily outpaced incoming revenues despite a series of tax and fee increases he implemented, including higher charges on cigarettes, home sales and new car registrations.
To sustain budget spending, McGreevey borrowed against money the state was awarded after suing major tobacco companies through a financial maneuver that has since been banned by the state Supreme Court.
And his exuberant funding of the lawmakers' pet pork projects drew a federal investigation, led by Christie when he was the state's U.S. attorney.
DiFrancesco
Donald DiFrancesco is another Senate president who took a turn as acting governor, after Whitman stepped down to lead the federal Environmental Protection Agency in 2001. The Republican upped spending to $23 billion in a budget that helped double the tax rebate checks of the day to $500. He also boosted the surplus to $1 billion, more than three times more than Christie is carrying in his budget.
But DiFrancesco also guided through a 9 percent increase in pension benefits for public employees. That election-year increase has been blamed as one of the reasons the state pension system is underfunded by $46 billion. Christie has proposed a series of benefits reforms on top of changes that were made earlier this year to help address the pension shortfall.
Whitman
The former GOP governor started the decade with a budget that funded property tax rebate checks averaging $240. She also maintained a surplus of more than $850 million before leaving for Washington.
But Whitman also left the state with a more than 40 percent increase in debt during her tenure, which began in 1994. And she spearheaded a controversial pension bond issue that helped balance spending, but was blamed for pushing costs on to future governors. Whitman cut income taxes by 30 percent, a move that some believe was unrealistic and put the state on a path of fiscal imbalance.
E-mail: reitmeyer@northjersey.com
