Corzine revises budget for town aid, parks

Gov. Corzine wants to scale down cuts in aid to small towns, keep all state parks open, and leave agriculture as its own department, New Jersey's treasurer told state senators yesterday.

"I hear the concerns the public has," Corzine said later, but they "need to be put into the framework of what available funds we have."

Treasurer David Rousseau presented the Senate Budget and Appropriations Committee with a revised state budget of $32.84 billion, down slightly from the $32.97 billion budget proposed in February.

He also had some mixed economic news for lawmakers.

On the plus side, the state anticipates collecting $533 million more this fiscal year than had been projected. But the state also projects revenue for next fiscal year, which begins July 1, to come in $159 million below the previous estimate.

Rousseau warned that the extra revenue for this fiscal year likely would not be repeated.

"We must wean ourselves off of the tricks and gimmicks of the past and the repeated reliance on one-time revenues to pay for our current and recurring spending," he said.

He acknowledged that the budget for next fiscal year uses $500 million in surplus from this fiscal year.

The Corzine administration also is counting on $25 million more in lottery revenue, although the specifics about how to accomplish that have not been decided.

The administration plans to use the unanticipated $533 million to pay down the state debt, which would mean $130 million less in debt service next fiscal year. New Jersey has one of the highest debt loads per capita in the nation.

It's unclear how the Legislature will respond to that idea, however.

Sen. Barbara Buono (D., Middlesex), who chairs the Budget and Appropriations Committee, agreed the state should use the windfall to pay down debt.

"It is a financially prudent plan that recognizes that the state must be proactive in reducing our debt, even during lean times," Buono said. "Additionally, it will reduce our debts service this year and into the future, freeing up funds for essential programs like charity care and municipal and school aid."

Senate President Richard J. Codey (D., Essex) said: "In terms of the big picture, its effect will be de minimis on this year's budget. But hopefully we can use it to ease some of the pain by offsetting those proposed cuts that will hurt people the most, such as co-pays for Medicaid, charity care for hospitals, and state park closures."

New Jersey's struggles to get its finances in order are being echoed in other states.

In Pennsylvania, lawmakers are gearing up for negotiations on Gov. Rendell's proposed $28.2 billion budget. As with most of Rendell's previous budgets, the debate is expected to be contentious. So far in Rendell's almost six years in office, no budget has been completed before the July 1 start of the fiscal year.

Likely to be a major point of contention: Rendell's historic increase in basic education funding of $291 million, or 5.9 percent. Another sticking point: his proposals to fund energy conservation projects and health coverage for the uninsured.

Yesterday in Trenton, several committee members questioned the Corzine administration's proposal to offer early-retirement incentives to reduce the state workforce by 3,000.

Previously, it was suggested that 500 to 600 state workers could be laid off while the rest could take early retirements. Yesterday, Rousseau said the number of layoffs would be "minimal" under the revised plan. He also said an estimated 8,500 state employees would have to be laid off to save the $135 million the state hopes to save through early retirements.

Sen. Stephen Sweeney (D., Gloucester) was among several lawmakers who questioned early retirements, saying he was "not very excited about supporting it at this time."

Previous attempts by the state to cut costs through early retirement have resulted in more spending, but the Corzine administration said a cap on hiring to replace those who left would prevent that from happening again.

Rousseau said that if the Legislature wanted to restore funding in certain areas, it would have to propose cuts in others.

Another area of contention was the newly proposed reduction in cuts to towns of fewer than 10,000 residents. Previously, the administration proposed cutting $37 million in state aid to those towns. In the latest proposal, it would give back half the aid for towns with 5,000 to 10,000 residents and one-quarter of the aid for towns with fewer than 5,000 residents. In addition, towns whose aid cuts would lead to an average increase of more than $100 in residential property taxes would receive additional funding.

Sweeney said that if cuts needed to be made, they should be made "across the board" and not just to smaller municipalities.

Rousseau said that park services might be cut, but that Corzine will do his best to keep parks open. It will be up to the Department of Environmental Protection to decide where to trim spending to keep within the budget.

Corzine said he hoped to have a budget by June 16, ahead of the July 1 state constitutional deadline. But it's clear the belt-tightening will be difficult.

Responding to questions about reducing the number of state employees, Corzine said, "You can't just do more with less. You actually have to do less."