Published Online: December 23, 2009

Corzine Trims N.J. Budget as Christie Plans More Cuts

New Jersey Gov. Jon Corzine has whacked more than $800 million from the current state budget less than a month before leaving office, he said Tuesday as his successor announced preparations for steep reductions for the fiscal year ahead.

The $839 million in Corzine's additional cuts include $100 million from eliminating the state's contribution to the employee pension fund, $5 million from cancer research, $2.3 million from charter school aid and $607,000 from a hiring freeze at motor vehicle agencies. The revised budget does allow $20 million in delayed municipal tax relief payments that will be released to cities and towns and an income tax surcharge on the wealthy to end Dec. 31.

The cuts are needed to keep the current budget balanced as tax collections continue to fall short of projections.

The revised $28.6 billion budget is smaller than the allocation in the 2006 fiscal year, the year before Corzine's first budget.

Christie, meanwhile, said Tuesday that he has asked his transition team to prepare to cut state spending as much as 25 percent next year.

Assembly Budget Chairman Lou Greenwald said he awaits Christie's plan and pointed out that the Democratic Legislature was the first in state history to cut the budget two years in a row.

"We endorse cost-cutting and look forward to seeing the governor-elect's plan," said Greenwald, D-Voorhees, "especially his promised proposals to cut property taxes and incomes taxes for all New Jersey residents."

Assemblyman Joe Malone, the ranking Republican on the Assembly Budget Committee, took issue with a provision in the revised budget that would require school districts to use some of their surplus balances in place of state aid, if the Legislature signs off.

Corzine said that since the money — $260 million in all — is surplus funding, it will have no effect on school operations or local property taxes, but Malone, R-Bordentown, viewed the use of the money differently.

"While I recognize that we can leave no stone unturned in this process, including aid to schools, I have concerns that the governor's actions to take aid from only those districts operating with a surplus is tantamount to punishing those who have planned and budgeted efficiently," said Malone.The state is constitutionally required to keep a balanced budget but faces a projected deficit of $9 billion for the fiscal year that begins July 1.

Christie said he told his team to draw up several plans for the 2011 budget, which he will introduce March 16.

"I want to be prepared," he said. "In March of this coming year, if projections remain where they are, we won't have the money to meet payroll. This is the scope of the problem I'm being left with."

The state Office of Management and Budget asked Cabinet members and agency directors in a Dec. 18 memo to prepare plans for cutting 15 percent, 20 percent and 25 percent from their 2011 budgets.

The memo sets a Jan. 6 deadline and says the request is being made by the governor-elect's transition team. A copy of the memo was first obtained by The Star-Ledger of Newark.

Christie said he wants recommendations on state programs that can be trimmed or eliminated, not across-the-board cuts.

But Christie again made it clear that he opposes to a bill sponsored by Democratic Sen. Sandra Cunningham to allow cities and towns to defer half their pension payment next year. Corzine allowed the deferral in the current fiscal year to help keep budget-strapped municipalities from having to raise taxes to meet their bills.

"It's an irresponsible financial maneuver," Christie said Tuesday.

Cunningham, of Jersey City, is a member of Christie's transition team.

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