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Christie: State budget “requires sacrifice” | mycentraljersey.com

17 Mar

Christie: State budget “requires sacrifice”

By MICHAEL SYMONS • GANNETT STATE BUREAU • March 16, 2010

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TRENTON — Gov. Chris Christie unveiled a $28.3 billion state budget plan Tuesday that includes deep cuts in spending on property tax rebates and aid to municipalities, schools and colleges, as well as the layoffs of thousands of state workers.

“This plan requires sacrifice by all New Jerseyans. But it is a shared sacrifice. And while holding the line is difficult today, it is necessary for a better tomorrow,” Christie said.

“The watchwords of this budget are shared sacrifice and fairness. Individuals contribute, businesses sacrifice, local governments tighten their belts, and we end our
addiction to spending,” Christie said. “Everyone comes to the center of the room — we
jump off the cliff together to stave off certain fiscal death for the hope of economic salvation tomorrow.”

After campaigning last year on a pledge to restore recent cuts to the homestead
rebate program, Christie instead is proposing to suspend them for 2010 and replace them with direct quarterly property tax credits starting in May 2011. That saves the state’s proposed budget some $2 billion. Tenant rebates would be permanently eliminated.

The rebate suspension and cuts in aid to local governments are sure to aggravate
local pressures on property taxes. To address that, Christie wants lawmakers to put a
proposed constitutional amendment before voters imposing a 2.5 percent cap on increases in local property tax levies, adjusted for increases in ratables. Local governments that raise taxes less than 2.5 percent could “bank” the increase for use later. Local voters could choose to exceed the cap, but the state couldn’t provide a waiver.

Christie wants lawmakers, who have been advancing pension reforms that affect future hires, to repeal a 9 percent pension increase for current workers that was approved in 2001. The change would affect future service credit; the enhanced pension presumably would continue to apply for service between 2001 and 2010. And he wants school district employees to pay more toward their health care costs.

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School aid reductions would equal as much as 5 percent of a local district’s current
spending — though that means for more than 50 districts where state aid amounts to 5
percent or less of local spending, all state aid will disappear. Municipal aid would be
cut by the equivalent of a $250 impact on the bill of an average residential taxpayer.

Beginning in January, Pharmaceutical Assistance to the Aged and Disabled
beneficiaries would be required to cover an annual deductible of $310. Also, the
co-payment for brand-name drugs rises from $7 now to $15 and the co-payment for generic drugs would drop from $6 now to $5. Senior Gold enrollees will also have to pay the $310 deductible and additional coinsurance.

Other cuts would be widespread. To save $7 million, no funds would be provided for
anti-smoking programs. No new students would be added to the NJ STARS community college scholarship program. There would be no new State Police trooper recruit class. New Jersey Network would become an independent, not-for-profit station by January.

The state would pay none of the $3 billion it is supposed to put into public employees’ pension funds.

The budget projects the elimination of 1,300 positions, including layoffs. Cuts of
non-union employees will be made this year, but cuts of union members will be delayed until January, when a moratorium on job cuts expires that then-Gov. Jon S. Corzine’s administration made in 2009 in exchange for unions agreeing to delay pay increases.

Christie said the remedy for the state’s fiscal problem is difficult but needed
because taxes are too high to raise and the economy suffering as a result.

“You changed doctors in November for this very reason. Now it is time to change
medicine, too,” Christie said. “Off the temporary high that comes from higher taxes
and greater spending. Back to the hard, difficult medicine of fiscal discipline, lower
spending and less — which in your heart you know will lead to the greater long-term
health of our state.”

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Christie reiterated that he won’t sign a tax increase — though the proposed budget
does include smaller, targeted revenue-raisers, and payroll taxes and New Jersey Transit fares are going to rise.

“I was not sent here to approve tax increases. I was sent here to veto them,”
Christie said. “Mark my words today, if a tax increase is sent to my desk, I will veto
it. Simply put, it is time for the tax madness to end.”

Christie is proposing to cut the earned income tax credit available to low-income
taxpayers by $45 million, eliminate business tax credits for film production and
high-tech industries worth $45 million, raise assessments on hospitals and ambulatory
care facilities by $45 million, put a special purpose assessment on insurance companies to raise $20 million and increase business filing fees by 25 percent.

The budget also counts on $80 million in additional revenue by speeding up the time
frames before which unclaimed personal property, such as unused gift cards, default to
the state.

Christie’s budget also counts on $65 million in increased sales-tax revenue by
repealing Bergen County “blue laws” that prevent the malls in Paramus, for instance,
from opening on Sundays.

More than $335 million in one-shot transfers would be made, cumulatively, from 16
funds, including nearly $92 million from Urban Enterprise Zones (which would receive no funding for the year), $65 million from a global-warming fund and $40 million from the Motor Vehicle Commission.

The budget also relies on $1 billion in federal stimulus aid that offsets what
typically would have been a state appropriation, bringing the budget to $29.3 billion.
In the current year, nearly $2.3 billion in stimulus aid supplements state spending.

Christie’s administration says the shortfall in the projected budget for next year
was $10.7 billion out of what would have been $38.4 billion in spending in a “hands off
the wheel” budget that fully funded things that are rarely, if ever, fully funded –
pensions, school aid and property tax rebates, for instance.

Chief of staff Richard Bagger said the gap the largest, per capita, in the United
States. Treasurer Andrew Sidamon-Eristoff went a step further, though officials later
backed off the claim: “We believe that it’s not only the largest gap in terms of
absolute dollars, but also percentage gap, that any state has ever faced, at least in
the modern era.”

“No fiscal crisis we have had in New Jersey’s history compares to this one,”
Christie said.

via mycentraljersey.com

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