N.J.'s budget, economy await Legislature's return

It may be a new year, but many old issues will be on the table when Gov. Corzine and the Legislature resume their work in Trenton.

At the top of the list, as it was for much of 2008, will be the handling of the state's economy and budget.

Joining that on the agenda will be affordable housing, new ethics rules, and, possibly, a deferral of towns' pension contributions.

Looming over all will be the reckoning in November, when Corzine will be up for reelection and all 80 Assembly seats will be up for grabs.

In recent weeks, Corzine, Senate President Richard J. Codey (D., Essex), and Assembly Speaker Joseph J. Roberts Jr. (D., Camden) have been unusually unified, with each calling the economy his top priority.

Corzine and lawmakers have said they will continue to seek ways to ease New Jerseyans' pain from the national financial turmoil, but that will be a challenge. The state budget has been battered by the economic slump, and Corzine delivered new and frightening numbers Friday.

A $1.2 billion shortfall in the current budget, which runs until June 30, has grown to $2.1 billion, he said. To deal with that, he will propose cutting $812 million in expenses. He plans to raid the rainy-day fund, freeze the salaries of government workers, and make use of $300 million in new federal aid.

His state-of-the-state speech Jan. 13 will almost certainly include budget-cutting details. On Friday, he described the nation's economic problems as the worst since the 1930s.

An even tougher task awaits just weeks later when he has to propose a new budget, this one to start July 1. The revenue declines that widened the present budget gap will greatly increase the challenge of crafting the new budget.

Corzine said that he would have more information on his plans tomorrow, and that some of his ideas would require legislative approval.

Senators plan to start on the budget earlier than usual, said Jason Butkowski, a spokesman for the Senate Democrats.

Codey and Roberts have pledged to take up at least some of the ethics measures that Corzine proposed in September. Corzine acknowledged in December that there was "less than wholehearted support" for his package, which would limit the awarding of government contracts to campaign contributors and tighten rules for political donations.

On affordable housing, Democrats and Republicans have called for changing the methods that determine how much low-income housing towns must provide and for dropping a development fee intended to pay for such construction. Lawmakers backing the changes have tied them to economic recovery.

Corzine has said he still believes in his plan to let towns defer pension contributions for local government employees. The plan stalled in the Legislature in December, but Corzine said it would help keep property taxes in check.

"I don't make any apologies for the fact that we're dealing with an unprecedented economic situation," he said in late December.