STAR LEDGER - Corzine to unveil new cuts when he offers 2010 budget

Tuesday, February 03, 2009

BY CLAIRE HEININGER

Star-Ledger Staff

Gov. Jon Corzine said yesterday that more midyear cuts to the state's current budget are unlikely, but he is preparing a new slate of cutbacks for the budget he will deliver next month.

The Senate Budget and Appropriations Committee yesterday approved some of the emergency measures Corzine proposed to close a $2.1 billion gap in the $32.9 billion 2009 budget -- actions the governor said should be enough to keep New Jersey's finances in balance through June 30.

Revised estimates followed the dramatic dropoffs in state revenues caused by the national economic crisis, Corzine said, noting collections are down 7 percent in most tax categories. Revenues are now closely matching those revised estimates, the governor said.

"We cut our expectations pretty significantly," Corzine said. "I actually think we're running relatively close to the new tracking on revenues that we've seen, but this is a very unusual time...so we're constantly reviewing."

He declined to name specific areas that could be targeted if something "unpredictable" causes revenues to plunge further.

"We have contingency plans that we've looked at but we're not thinking we'll have to do that at this point," Corzine said. "So we'll come with a series of cuts that will be focused on the 2010 budget. That's where we're giving most of our efforts right now."

Corzine is scheduled to present his 2010 budget on March 10. Originally, he was to unveil it late February but pushed the date back because of the pending federal stimulus package and all of the scrambling to rework the 2009 budget.

Those emergency mid-year measures included $812 million in spending cuts -- including a $15 million cut in municipal aid and a $75 million reduction in public school aid -- an 18-month wage freeze for state workers, $300 million from the proposed federal stimulus package for Medicaid, the diversion of $500 million from $650 million intended to pay down state debt, and other steps.

State worker unions oppose reopening their contracts for the wage freeze. Republican senators, meanwhile, said they are concerned about a component in the cut to school aid that would delay pension payments to non-teaching employees.

"We owe it to taxpayers and retirees to seriously discuss alternatives to shortchanging the pensions" said Sen. Kevin O'Toole (R-Essex).