Budget committees in both houses of the New Jersey Legislature yesterday approved a $28.6 billion state spending plan, moving it toward final votes that could come Thursday.

In the first hearings on the formal budget bill, which has changed little from the plan unveiled by Gov. Corzine in March, advocates for businesses, health insurers, and others analyzed the fine print and made last-minute appeals for policy and spending changes.

But in a year when Corzine and the members of the Assembly face re-election, politics permeated the day.

Democrats, who hold the majority in both houses, reiterated their argument that New Jersey is in the midst of a global recession not of the state's making. That has forced difficult choices, they said.

"Our revenues reflect the harsh reality of an economy in turmoil at a time of increasing pressure to counter the effects that this recession is having on our residents," said Sen. Barbara Buono (D., Middlesex), chair of the Budget Committee.

Republicans called the spending proposal irresponsible, characterizing it as "kicking the can down the road" - pushing costs into the future in order to survive this year.

"We cannot continue to go the way we are going," said Joseph Malone of Burlington County, the ranking Republican on the Assembly Budget Committee. "There has to be a significant effort by legislators and whoever is the new governor to sit down and come up with a plan that doesn't continue the deferral and doing the things we know are going to affect the future of this state."

Assembly Budget Committee Chairman Louis Greenwald (D., Camden) said the Republicans' comments show they are "a party without ideas."

The Republican leaders in the Senate and Assembly said no members of their caucus would vote for the plan in full house votes Thursday, leaving Democrats with little room to maneuver.

Democrats hold a 23-17 majority in the Senate, which means only three defections could stall the budget. Sen. Jeff Van Drew (D., Cumberland) has said he plans to vote against the budget unless funding is restored for Shore protection.

Sen. Joseph Vitale (D., Middlesex) voted against the budget in committee yesterday, hoping to restore funding to an expansion of health care approved last year under his leadership. The expansion has been frozen in the new budget to cut costs.

"Morally, it's as objectionable as it can get," Vitale said. He was the only Democrat in either house to vote against the budget bill, which otherwise passed on party lines.

Advocates at the Assembly hearing praised lawmakers in both houses for some of the changes they made to the governor's budget proposal and urged them to reconsider other items before a final vote. Changes appear unlikely at this point, with Democrats hoping to pass the bill within days.

Several advocates thanked legislators for restoring funding to eliminate proposed co-payments for Medicaid prescriptions, and for AIDS and HIV medicine.

Lowell Arye, executive director of the Alliance for the Betterment of Citizens with Disabilities, said the Medicaid co-payments would have affected about 418,000 New Jerseyans and the AIDS/HIV medicine co-payments 7,500 individuals.

Arye also thanked lawmakers for restoring some of the funding for medical day-care facilities that provide services to the elderly and development disabilities. The facilities are currently reimbursed $83 or $95 per day per patient, depending on the type of facility. Both kinds of reimbursements will be reduced to $78.50 per day instead of the originally proposed $70.

"To have a cut that is less than originally proposed, we are happy with," Arye said after the hearing. "We're trying. This is a hard time."

Another winner was the judiciary, which will be able to hold onto $10 million of unused money from the current budget, instead of $3 million, essentially giving it an added $7 million for the new fiscal year.

Among the other changes was a shift in a proposed tax increase on insurers. The proposed budget now would raise taxes on group health insurance plans to 2.25 percent, up from 1 percent, according to the New Jersey Association of Health Plans. Gone is a proposed tax on HMOs and a smaller levy that would have hit a broader range of insurance options.

The tax hike is expected to raise $75 million, according to the association. Wardell Sanders, the group's president, said the impact would largely be felt by small businesses, because larger ones fund their own benefits.

"It's hitting, unfairly, those marketplaces that are most vulnerable," Sanders said.

Another change would cap tuition increases at state colleges at 3 percent and impose travel restrictions as conditions of their receiving federal stimulus aid.

Towns that receive special municipal aid would now be subject to audits by the state comptroller.

A planned $8.8 million project to replace fire alarms and fire suppression systems at the Albert C. Wagner Youth Correctional Facility in Bordentown has been dropped.

Gene Lyman, chief operating officer of the Camden County Health Services Center, a psychiatric facility and long-term care facility serving South Jersey, told lawmakers that Camden County taxpayers have absorbed more than $15 million in funding cuts and delayed reimbursements over the last two years.

He urged lawmakers to consider that it would cost the state more to care for those patients if the county center were forced to close.

Republicans returned to the lines of criticism they have leveled since the budget was introduced and that are sure to be repeated on the campaign trail, assailing Democrats for tax increases in the plan and for eliminating property tax rebates for more than one million homeowners.

The plan "sets a new record for callous disregard of the hopes and the dreams of middle-class New Jerseyans," said Senate Minority Leader Thomas Kean Jr. (R., Union). He later added, "This budget will make New Jersey more unaffordable by raising taxes and cutting rebates."

The budget calls for a one-year suspension of property tax rebates for all but senior citizens and the disabled, and would increase taxes on wine and liquor. It also would raise income taxes for residents earning more than $400,000 annually and cut property tax deductions for those earning more than $150,000.

The budget bill passed in the Assembly Budget Committee, 8-4, and in the Senate Budget Committee, 8-7.

The state constitution calls for the governor to sign a budget into law by July 1, the start of the next fiscal year.

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com