Asbury Park Press - Budget agreed to in principle; details to come....GANNETT STATE BUREAU "Legislative leaders and Gov. Jon S. Corzine reached an agreement in principle Monday on a new state budget that the governor said will reduce spending by about $600 million."

ASBURY PARK PRESS - June 17, 2008 Budget agreed to in principle; details to come By MICHAEL SYMONS GANNETT STATE BUREAU Legislative leaders and Gov. Jon S. Corzine reached an agreement in principle Monday on a new state budget that the governor said will reduce spending by about $600 million. More details on the roughly $32.8 billion plan are expected today. A public hearing is planned for Wednesday, followed by Senate and Assembly committee votes Thursday and final passage in the Legislature next Monday. Officials said the budget will spend $100 million less than called for in the February plan proposed by Corzine, which would amount to a budget of $32.869 million. Corzine said the plan represents the largest spending cut in state history. "We have passed a turning point, really, for the state. We've gone from a continuous increasing in spending, tax increases, borrowing and one-shots ... to what I believe is quite a responsible matching of revenues and expenses," Corzine said. "You can say this very simply: We're spending less, and we're not increasing taxes," Corzine said. One tax paid by ratepayers on their utility bills won't be reduced as scheduled, however. The cost of that is $62 million in the coming year. It marks the fourth time since 2002 that the phase-out of the 1997 tax is being delayed. Corzine rejected a suggestion that move is akin to a tax increase. He took note of the state's financial position and the national recession. "Extending doesn't sound like an increase," Corzine said. "Would we like to have allowed it to expire? Of course. But given the overall choices we have, allowing it to be extended, I think, is not a new tax increase. I think it is a responsible choice in a difficult environment." Property tax rebates will be paid as Corzine proposed them in February. Nobody would receive an increase to match property tax hikes. Households with incomes of $100,000 or less get the same check as last year. Those between $100,000 and $150,000 get two-thirds of what they got last year. Homes with incomes over $150,000 are ineligible, down from $250,000 last year. Charity care aid to hospitals for emergency-room care for the uninsured would be partially restored but remain reduced. Without providing specifics, Corzine said the budget also makes a major step forward in providing access to health care. Spending will be reduced in every state department. The Department of Personnel and Commerce Commission are being eliminated, as Corzine proposed, though the Department of Agriculture will remain, albeit with a significant spending decrease. "While it is filled with a lot of really heartbreaking choices, it's got a lot of constructive elements in it," Corzine said of the budget. Assembly Speaker Joseph Roberts Jr., D-Camden, said 75 percent of the cuts that originally were planned for towns with populations under 10,000 have been restored. Bigger municipalities will also see some aid restored. Plans to begin requiring rural towns and cities such as Camden to pay some toward their State Police trooper patrols have been trimmed back, said New Jersey State League of Municipalities William Dressel Jr. The state plans to begin charging in January and will collect $10 million, rather than $20.5 million, in the coming fiscal year. Senate President Richard Codey, D-Essex, said the early-retirement incentives — expected to be offered to workers 58 and older with 25 years of service — intend to reduce the state work force by "a couple thousand." No money is being put aside by the Corzine administration to pay for the long-term costs to the pension fund of the sweeteners being offered to get employees to retire early. Corzine's February budget had set aside $300 million for that purpose. "My own view is we're paying for this with the reduction of salaries and the cost of doing business," Corzine said. "It takes, I guess we've gotten down to in the neighborhood of two years, maybe even inside of that, to pay it back. Other people would argue that the so-called pension reform that's working its way through ... would take care of the long-term funding liability." Corzine hasn't said whether he supports the pension reforms pending in the Legislature. Codey said language is still being worked on regarding the bill that impacts future part-time public workers' eligibility for traditional pensions. Plans to close as many as nine state parks or eliminate camping and swimming opportunities have been postponed. The state plans to shift $9 million from the surplus in beach replenishment project fund to pay for parks operation. Sen. Joseph Kyrillos Jr., R-Monmouth, criticized the plan. "Redirecting these monies will increase and severity of flooding, raising insurance rates for middle-class families and small business owners along the shore," he warned. The state will spend $650 million in the current budget year from the unexpected tax collections received this year on a debt reduction account, enabling it to save $130 million a year for five years off its $2.8 billion annual debt service payment. It will also spend $34 million from the surplus on capital expenses. That $684 million will ultimately be considered spending in the fiscal 2008 budget but was not included in the calculations by the Corzine administration when it claimed credit for cutting spending by $600 million. The Ledger - Gov, Dems shake on a $32.8B budget June 17, 2008 Gov. Jon Corzine and legislative leaders Monday agreed on a $32.8 billion state budget that the governor said will include "unprecedented" spending cuts and a new way to help New Jersey pay down its debt. The deal, which came four months after Corzine called on lawmakers to reject "the patterns of overspending and tortured borrowing that burden our taxpayers," resulted in a spending plan that is actually $100 million less than the governor proposed in February. It was produced amid weeks of protests from teachers, farmers, mayors, nursing home operators and other groups seeking to stave off the cuts. "I think it's the largest absolute cut in spending in the history of the state," Corzine said, noting the proposed budget is more than $600 million smaller than the one adopted a year ago. "We're spending less and not increasing taxes and we've done that while increasing expenditures on education substantially." The cuts include $170 million from state aid to municipalities, and more than $90 million from subsidies for hospitals. Homeowners who are under 65 and earn more than $100,000 will see their property tax rebates reduced or eliminated. Two state departments will go out of business. Further details are to be released today. While Corzine acknowledged the budget required "heart-breaking" choices, he said it also improves the budget process and begins to pay down a debt that is the fourth-highest among states in the nation. He and legislative leaders said there will be no money for lawmakers' pet projects, commonly called "Christmas tree" items. They totaled more than $100 million last year. Corzine also persuaded lawmakers to set aside $684 million for a new debt reduction fund that will lower annual debt payments beginning with the upcoming budget year that kicks off July 1. That money will actually come from extra revenues from the current budget year, and will be counted as spending from this budget. The accounting move allows Corzine to keep his claim of big spending cuts in the next budget. The governor stressed that cutting debt is the kind of spending that helps the state in the long run. "That has to be used for debt reduction," Corzine added, making it clear that the pool of money cannot be used to plug any new budget holes if the weak economy further depresses revenues. Senate President Richard Codey (D-Essex) and Assembly Speaker Joseph Roberts (D-Camden) spent about 45 minutes in the governor's office yesterday before announcing the deal. Lawmakers and the governor agreed to abolish two state departments -- Commerce and Personnel -- but dropped plans to dismantle the Department of Agriculture. Using early retirement incentives, the administration will pare the payroll by at least "a couple thousand" positions, Codey said. Negotiations over the past few weeks restored $9 million to keep state parks open; $20 million of the $190 million that Corzine proposed to cut from state aid for municipalities, and $50 million of the $143 million in hospital funding cuts called for in his original plan. Total municipal aid will top $1.6 billion and hospital subsidies will exceed $950 million. "We still believe it's woefully short," said William Dressel, executive director of the New Jersey State League of Municipalities. He said the municipal aid cuts will trigger a wave of "layoffs and service reductions." "Though the details are scarce, New Jerseyans should be dismayed by the short-sighted budget cuts apparently included in today's budget deal," said Eva Bonime, spokeswoman for the Better Choices Budget Campaign, a coalition of community, housing, environmental, labor and student groups that oppose Corzine's cuts. Senate Budget and Appropriations Committee chairwoman Barbara Buono (D-Middlesex) emphasized it is only budget agreement "in concept" because the plan also relies on other bills, including measures to cut down on pensions for part-time public employees and teachers. "There are a lot of moving pieces," she said. "It's my hope they will all move in concert." Senate Majority Leader Stephen Sweeney (D-Gloucester), sponsor of one of the pension reform bills, said that despite a lobbying blitz by unions representing teachers and public employees, only minor, technical changes are planned for the reform bills. "We're doing some clean-up language," he said. "But the concept of the bills hasn't changed." A public hearing will be held on the spending plan at 9:30 a.m. Wednesday in the Statehouse Annex. It is on track for final passage by Monday. The state constitution requires that a budget be in place by July 1. Staff writers Dunstan McNichol and Susan K. Livio contributed to this report.