State's Spending 'Addiction' Must End, Governor Says

 

Atlantic City Press

Beth DeFalco

March 17, 2010

 

With New Jerseyans shouldering the highest tax burden in the nation, Gov. Chris Christie told lawmakers it was time the state stop its "addiction to spending" and start finding ways to cut back.

 

In his first budget address to lawmakers on Tuesday, the Republican suggested doing that by cutting aid to schools and tax rebates to homeowners, laying off state workers and skipping pension payments.

 

Christie, who ousted Democratic Gov. Jon Corzine in November by running on a platform of smaller government, outlined his $29.3 billion budget proposal before a joint session of the state legislature, telling lawmakers that if they continue to increase taxes, people will leave the state.

 

"Previous administrations and legislatures have raised taxes 115 times in the last eight years alone," he said.  "Raising taxes again on the people of New Jersey, the highest taxed citizens in the country, would be insane."

 

Christie's 2011 budget is only slightly smaller than the current one, but given inflation, the growing costs of benefits and the loss of $1.3 billion in stimulus money, he had to make about $3 billion in cuts.

 

To balance the budget, which he is constitutionally required to do, Christie must also close a $10.7 billion deficit.

 

He will do that by slashing education money by more than $1 billion -- $820 million for K-12 schools and $175 million for higher education.  That comes on top of the $475 million cut in school aid Christie made last month to rebalance the current year's budget.

 

"You are talking about cuts that will be devastating to public education," said Steve Baker, a spokesman for the New Jersey Education Association, the statewide teachers' union.

 

Schools will lose up to 5 percent of their budgets.  Poor urban schools will be hit the hardest because their budgets rely on a higher percentage of state aid, with some getting more than 90 percent of their budgets from the state.

 

David Sciarra, executive director of the Education Law Center, which represents students in the state's poorest cities, said any cut to school aid would require approval from the state Supreme court.

 

"The governor cannot unilaterally disregard the court decision," he said.

 

School districts will learn today how much aid they're getting and nearly all can expect a cut, though reductions will vary based on factors such as enrollment changes and the number of severely disabled special-education students.

 

State Education Commissioner Bret Schundler said a set of reforms proposed by the governor -- capping property tax increases at 2.5 percent and making school employees contribute to the costs of their health plans -- could help schools when the economy is strong.

 

The state also plans to move ahead with its program of building new schools in the poorest districts.  Suburban schools could see their debt service assistance for construction reduced.

 

Pensions, rebates, towns

 

Christie will skip $3 billion in pension payments, saying the system must be reformed before more money is poured into it.  The system is already underfunded by $46 billion.

 

Under the proposal, no one will get a property tax rebate check this year to combat New Jersey's property taxes, the highest in the nation at an average $7,300 per household.  When rebates return in the spring of 2011, senior citizens, the disabled and low-income wage earners will get a tax credit rather than a rebate check, and they will get less than they received last year.

 

The program also "freezes" a rebate program that allowed low-income senior and disabled citizens to lock in property tax rates when they enroll in the program.  Those already in the program will continue to keep those rates but no one else is allowed to join.

 

The budget also proposes a $445 million cut in aid to municipalities.

 

Christie is calling for a 2.5 percent spending cap -- no exceptions -- for schools, towns and state government.  That constitutional amendment would have to be approved by voters and wouldn't likely take effect until 2012.  If approved, spending above the cap would require voter approval.

 

Towns are currently restricted by a 4 percent cap created under Corzine, but that cap doesn't include increases for such things as health care.  They also can appeal to the state's Local Finance Board for increases beyond the cap under other circumstances and many have done so.

 

Christie will save almost $9 million through the layoffs of approximately 1,300 state workers, starting in January.  He didn't specify how many of those were union jobs.

 

Hitting close to home

 

Christie's budget proposes that the Vineland Development Center's west campus close not later than June 2011.  The west campus houses 110 developmentally disabled residents and employs 292 staff members.  Closing the west campus would save about $160,000 in this year's budget, according to the budget in brief, and more in future budgets.

 

The 110 residents of the west campus occupy four of six available dormitories.  Administration offices are also located in the dormitories where residents live.  Of the approximately 12 buildings on the site, only seven are in use.

 

Jermaine Bethel, 20, of Millville, a housekeeper at the developmental center, said supervisors told employees this afternoon that the campus would close.

 

Some employees would move to the east campus and others, without seniority, would be laid off, said Bethel.  As an employer with 10 months of experience, he said he's expecting to be one of those laid off.

 

Pam Ronin, spokesperson for the Department of Human Services, said the decision to close the campus is still a proposal.  The idea that the west campus would be combined with the east is unlikely as the relocation of west campus residents isn't as simple as moving them across town, he said.

 

"Each person would be worked with individually," Ronin said.  "We never more people en masse."

 

Kimberly Hayman has worked at the west campus as a resident nurse for the past 20 years.  She thinks she'll keep her job even when the place closes, but she's worried about the residents.

 

"If they close this campus we don't think they could get the care they deserve and need," said Hayman, 39, of Millville.

 

Less clear is the future of the state's 32 Urban Enterprise Zones, including ones in Bridgeton, Vineland and Millville, wildwood and Pleasantville.

 

The governor is proposing that money that would normally have been returned to those enterprise zones from sales tax now go into the general fund.

 

In towns like Millville and Vineland, officials have credited the UEZ with the creation of thousands of jobs and hundreds of millions of dollars.

 

Roger Tees, Pleasantville UEZ's executive director, said the state's UEZs need to show the governor what they've accomplished.

 

"The investment that the state is making by retaining the program will far exceed any economic benefit of removing the money and putting it somewhere else."

 

Robert Romano, mayor of Vineland, said that he had met twice with Christie in recent days, and each time had asked first about the proposed cuts to UEZ.

 

Vineland is one of several towns that use UEZ funds not only for urban redevelopment but also for law and public safety.

 

Romano said the town funded 21 police officers through the fund.

 

"It's more than $2 million for the Police Department, and another $800,000 for the Fire Department," he said, after listening to Christie's budget address from the gallery of the Statehouse.

 

Blaming the unions

 

Christie spent a good portion of his speech attacking the unions that campaigned against him, saying they used their "political muscle" to enrich their members while private workers were left holding the bag.

 

The result is two classes of citizens, he said:  "Those who enjoy rich public benefits and those who pay for them."

 

The cuts hit the poor particularly hard.

 

His budget reduces the state tax credit for lower-income workers, known as the Earned Income Tax Credit, a move Assembly Speaker Sheila Oliver called "a tax increase for the working poor."

 

The maximum state credit for a single parent with two children would drop about $250 from $1,259 to $1,007.  The eligibility would remain the same and depends on family size.  A single parent with two children earning less than $40,363 would qualify.

 

Cash welfare assistance for adults without children will also disappear and state health insurance for low-income families will be reduced to exclude any more adults from participating in the NJ Family Care program.

 

The program offers free or subsidized health insurance coverage to low-income families.

 

Democrats have criticized Christie for not reinstating an income tax surcharge on the wealthy, which ended December 31.  They estimate that would generate about $800 million in revenue and affect only 1 percent of taxpayers.

 

Republicans suggested that the state stop funding the state's public television station, New Jersey Network, one of the few stations that carried the governor's budget address live.

 

Associated Press writer Geoff Mulvihill in Philadelphia and Press staff writers Juliet Fletcher and Edward Van Embden contributed to this report.