Corzine's budget proposal trims 3,500 state jobs

Gov. Corzine, unveiling his next state budget, today proposed cutting thousands of jobs from the state payroll and eliminating the agriculture and personnel departments, as well as the state commerce commission.

The overall budget comes in $500 million below the current year's budget of $33.5 billion. It calls for reducing spending by $1.7 billion and deferring growth in areas such as municipal aid by an additional $1.5 billion.

The governor said it represented the second largest spending cut in state history.

"Frankly, New Jersey has a government its people cannot afford," he said.

Corzine proposes reducing the state workforce by more than 3,500 workers through a combination of early retirements, layoffs and attrition. The property tax rebate would be trimmed, as would be municipal aid.

Next, the Legislature will offer its suggestions for the budget and negotiate changes.

According to the state constitution, the Legislature must adopt a budget by July 1, the first day of the next fiscal year.

Acting State Treasurer David Rousseau said Monday that every department of the executive branch would see a reduction in funding, which he said had not happened in New Jersey in decades.

There would be no new or increased taxes and the budget would cut charity care to hospitals, which helps to cover hospitals' costs to care for those who cannot afford their services.

Rousseau said the governor did his best to protect education, property-tax rebates, public safety, and the state's most vulnerable citizens. Medicaid and higher education, for example, would not be cut to the same degree as other areas.

Overall, about three quarters of the budget would be redirected outside state government in the form of aid, Rousseau said, the same proportion as in the current budget. The state would also need to dip into its estimated $1 billion surplus to balance the books.

Rousseau said the governor would propose using far fewer budget gimmicks than have been used in the past. "Christmas tree ornaments," or discretionary spending requested by specific lawmakers, often to benefit their districts, would be minimal.

The details of any early retirement program, such as who would get the offer, have yet to be worked out. The administration would try to avoid layoffs if possible because they are more disruptive than early retirements and save less money, Rousseau said.

The state workforce consists of about 68,000 employees, or about 1,800 fewer than when Corzine took office, officials said.

"Having [3,000] to 3,500 fewer employees on top of the 1,800 we've already lost will have a real impact on the services departments can provide," Rousseau said.

Since taking office in 2006, Corzine, a former Goldman Sachs executive, has warned that New Jersey needs to right its fiscal ship. The state faces an annual structural deficit of about $2.5 billion, meaning that spending exceeds revenue growth by that amount.

New Jersey has $32 billion in bonded debt, giving its residents one of the highest levels of debt per capita nationwide. The state estimates it has about $25 billion in unfunded pension liabilities and faces $58 billion in future health-care costs for state retirees.

In pitching his fiscal restructuring plan, which aims to essentially pay down half of the state's bonded debt and fund transportation improvements for decades to come, Corzine has hosted 13 town hall meetings across the state, so far. He plans to visit each county to explain and sell his plan.

At those meetings, residents have repeatedly urged the governor to cut state spending rather than increase tolls or raise taxes.

It appears that his budget proposal attempts to answer that call, though some are already lining up to criticize the proposal.

The Assembly's Republican leader, Alex DeCroce of Morris County, said the Assembly Republicans would not support any plan to lower or eliminate property-tax relief for middle-class families.

"We are prepared to show how cuts can be made in waste and nonessential state programs that have not been targeted by the governor so the taxpayers do not have to suffer any more pain," DeCroce said.

Assemblywoman Dawn Marie Addiego (R., Burlington) echoed those sentiments.

"If Gov. Corzine needs another $100 million in spending cuts so that he can maintain tax relief for New Jersey homeowners, we will be more than happy to help him find those spending cuts," she said.

Others warned that cuts to municipal aid would be painful.

"For every dollar cut, there's going to be an increase in taxes or a reduction in services," said William G. Dressel Jr., executive director of the New Jersey State League of Municipalities. "With the stringent cap that we have both on appropriations and on the tax levy, the only way that most governing bodies are going to make the revenues and expenditures match is laying off personnel."

The Legislature is required by the state constitution to adopt a budget by July 1.

Senate President Richard J. Codey said legislators have their work cut out for them.

"He's done the right thing by moving forward, having the guts," Codey said of the governor. "In some way or shape or fashion, we're going to come to a compromise. That's as simple as that."