Star-Ledger: Corzine signs a 'painful' budget

Tuesday, July 01, 2008
BY JOE DONOHUE AND DUNSTAN McNICHOL
Star-Ledger Staff

Acknowledging that "change is hard," Gov. Jon Corzine yesterday signed a $32.9 billion state budget that features dramatic cuts -- and then issued an executive order to curb future spending.

The governor said he takes no delight in enacting a budget that reduces spending $600 million below the budget adopted last year, a level he termed "historic."

"Make no mistake, the spending cuts are painful and bring no pleasure or applause. ... The cuts do, however, make clear that fiscal and tax stability for New Jersey citizens is possible," he said. "Change is hard. It's unpopular. Getting healthy will take time, even years."

Corzine also signed an executive order requiring future budgets to match spending to recurring revenues. In February, Corzine called for lawmakers to enact legislation setting that requirement, saying it would make sure the state only spends within its means, but no such law was passed.

"I would have preferred a statute but it's not a big difference," Corzine said. "While I'm governor, the executive order will be in place and the budget we propose will reflect that."

Corzine pointed out that the executive order will bind future governors unless they decide to rescind it. The order does provide some wiggle room in the event of a public health emergency or to meet "constitutional obligations."

With the gold dome of the Statehouse serving as a backdrop, yesterday's budget signing took place in the summer heat on the lawn behind the building's annex. It came one week after the spending plan gained final passage in the state Legislature. The state's fiscal year begins today.

Unlike in most past budgets, Corzine did not use his line-item-veto power to trim further, though he did delete some budget language for "technical" reasons. The budget enacted yesterday is nearly $100 million smaller than the one he proposed in February.

The new budget cuts some homeowner rebates, along with aid to hospitals, towns and nursing homes. It also features an early retirement plan aimed at trimming the state payroll. Democratic legislative leaders who joined Corzine stressed the spending cuts and the absence of new taxes. "People cannot afford the spending anymore," said Senate President Richard Codey (D-Essex). "They are cutting and you have to cut as well."

The cuts were denounced by Eva Bonime, spokeswoman for a coalition of groups that recommended targeted tax increases instead. "The failure to make needed investments in vital services like higher education, roads and health care will reduce the quality of life for all New Jersey residents," she said.

Republicans said the budget will drive up local property tax burdens by cutting rebates and municipal aid. "This spending plan will result in higher property taxes, delay serious debt reduction and practically guarantee that every driver in this state soon will be paying higher gas taxes, fees or tolls," said Sen. Kevin O'Toole (R-Essex).

One Republican who strongly endorsed the budget was former Rep. Robert Franks (R-12th), Corzine's opponent in the 2000 U.S. Senate race. During the ceremony, he was given a front row seat beside Treasurer David Rousseau.

Franks, who helped pitch Corzine's aborted plan to raise tolls to reduce state debt and fund road projects, said the governor promised him he would enact unprecedented cuts and delivered.

"You show me another state that's done this," Franks said.

Corzine also signed bills to delay the phase-out of a utility tax that costs ratepayers $62 million in the coming year, abolish the Commerce Commission and Department of Personnel and divert $9 million from shore protection funding to keep state parks open.

In addition, he signed a bill creating a $44 million fund to help provide medical services after a hospital has closed or is on the brink of insolvency. Hospitals would compete for a share of the money based on criteria developed by the state.

Originally published here: http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-10/1214886942327450.xml&coll=1