Gov. Corzine's $30.9 Billion Budget Proposal
Wednesday, March 22, 2006

Gov. Jon S. Corzine stormed into the State House in January with a financial background that, to many voters, suggested that Mr. Corzine could be New Jersey's swashbuckling fiscal savior — an image that the new governor did little to deflect.

But with his $30.9 billion budget proposal, Mr. Corzine all but acknowledged that — because of years of questionable budget making by his predecessors — he would be spending much of his time trying to bring the state's spending under control.

Increasingly over the past five years, New Jersey's expenses have exceeded the money that the state brings in through tax revenue. And state officials have increasingly sought to bring one in line with the other through borrowing or fiscal sleights of hand.

While Mr. Corzine, a liberal Democrat, might have wanted to promote a progressive agenda, he seemed resigned that he would first have to resolve the state's chronic budget problems — a task that leaders in the Legislature say may take up fully half his four-year term, if not more.

Some of the problems reflected by the governor's budget are nonetheless of Mr. Corzine's creation. His proposal to raise property tax rebates by 10 percent — though less than what he promised as a candidate — added $530 million to his spending proposal.

But there can be little doubt that Mr. Corzine is frustrated that he cannot begin to promote his social and legislative agenda, particularly with fellow Democrats controlling both houses of the Legislature. Instead, he finds himself reaching out to them for help in passing a range of politically risky measures to close the state's $4.5 billion deficit.

"No one, as I said yesterday, likes expenditure cuts in things they care about or they promoted and nobody likes raising taxes — it's not a political platform that is ideal, but it is necessary and it is constitutionally responsible," Mr. Corzine said at a diner in Jersey City on Wednesday morning.

During his budget speech to the Legislature, Mr. Corzine conceded that there was no "magic bullet" to solve the state's budget woes, regardless of his Wall Street pedigree. Treasurer Bradley I. Abelow, who worked with Mr. Corzine at Goldman Sachs, acknowledged as much.

"We're making no claim in this budget for great leaps of discovery," Mr. Abelow said.

The most contentious aspect of the plan — which includes $2 billion in cuts and increases in taxes on cigarettes, alcohol and luxury cars — may be the governor's proposal to raise the state's sales tax to 7 percent from 6 percent.

Since Mr. Corzine delivered his speech, Democrats have been particularly cautious when discussing the budget, referring to it as "a starting point" or a "work in progress."

Already, there is speculation that a compromise may be reached to raise the sales tax by one-half percent instead of one percent.

But whatever decisions are ultimately made, it is clear that the ambitious agenda Mr. Corzine articulated in the campaign has run up against reality.

He had hoped to make housing and higher education more affordable. Instead, he has proposed cutting aid to colleges and universities by $169 million, and property taxes are expected to rise because he has not proposed increasing municipal aid.

"When he got in there, I think he realized, 'There's no easy answer,' and 'I don't have any wiggle room here, because of all the decisions that were made before I got here,' " said Richard J. Codey, the president of the State Senate who got an up-close look at the state's budget dilemma as Mr. Corzine's predecessor.

"I think the governor has presented himself as a thoughtful governor who's willing to take some hits to do the right thing, and I can't applaud him enough for it," Mr. Codey said.

Those hits started to come in the hours after Mr. Corzine delivered his address. Critics seized on the sales tax proposal and argued that his budget is likely to drive up the state's property tax rates, already among the highest in the nation.

"We're cutting the aid to schools and colleges and municipal aid, which results directly in people's property taxes going up," said State Senator Thomas H. Kean Jr., a Republican from Union County who is running for the United States Senate this year. "We cannot afford to shift the burden any more."

Others sneered as they contrasted Mr. Corzine's financial background with the austere measures called for in his proposals.

"The people of New Jersey placed their trust in the governor because he said he would apply the Wall Street wizardry for which he is famous in saving New Jersey from fiscal ruin," said Alex DeCroce, a Republican assemblyman from Morris County. "But, in fact, that fiscal wizardry seems to have fizzled. New Jersey's at the edge of fiscal disaster, and this budget will push it right off the cliff."

Mr. Corzine has countered that New Jersey is headed for a fiscal abyss if nothing is done. Already, he said on Tuesday, the state faces a $1.5 billion deficit in the budget year that begins July 1, 2007 — even if all his proposals are adopted.

"Our problem is, unless we change course, we're going to spend that $1.5 billion," Mr. Corzine said. "And we won't have anything new to show for it."

Source- New York Times



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