N.J. could vote next week on a budget

The New Jersey Legislature could vote as early as next week on a budget that would eliminate property-tax rebates for all but senior citizens and the disabled, increase taxes on cigarettes, wine, and liquor, and raise income taxes for the state's wealthiest residents.

Budget committees in both houses are scheduled to hold hearings Monday on a proposed budget for the fiscal year that begins July 1.

Lawmakers were optimistic that both houses could vote on the budget as early as Thursday, which would be early for Trenton. According to the state constitution, state budgets must be signed into law by the governor before 12:01 a.m. July 1.

The Legislature's budget proposal was expected to hew closely to the $28.6 billion spending plan Gov. Corzine has pitched, adding no taxes or fees.

Both houses introduced budget bills Thursday, but staffers were still working out details and tinkering with language late yesterday.

Previous legislatures have offered spending plans that differed considerably from those presented by governors. But this year, with revenue at historic lows, lawmakers had little room to maneuver.

Corzine has already trimmed his budget proposal from the $29.8 billion he envisioned in March.

Last year, Corzine signed into law a $32.9 billion budget, which was eventually sliced down to about $30 billion as revenues came in well below expectations.

The governor's next spending plan counts on roughly $2.3 billion in federal stimulus aid, money that is not included in the $28.6 billion because it is considered off-budget. Administration officials argue that previous budgets also did not include such funding in their totals.

The Corzine budget also counts on $325 million in savings from a proposed revision to a contract with state workers. The governor has said he would prefer furloughs over layoffs, which he says are difficult to implement, save little money, and disrupt state services.

Union members have yet to vote on the proposal, which involves taking nine furlough days in the next fiscal year and postponing a scheduled raise for 18 months. Members of the Communications Workers of America, the largest state employee union, would in return be protected from layoffs until 2011 and would be guaranteed no more furloughs until the end of their contract on June 30, 2011. They could also take up to seven paid leave days for the furloughs in future fiscal years.

Corzine's proposal would increase income taxes on those earning more than $400,000 and eliminate property-tax deductions for those earning more than $150,000.

Cutting property-tax rebates would save the state about $976 million. And $1.4 billion in savings would come from skipping pension payments or refinancing debt.

Among the changes the Legislature was expected to request were the elimination of copayments for Medicaid prescriptions and AIDS medicine, at a cost of $6 million to the state. Medicaid copayments have been requested time and again by governors, only to be cut by the Legislature.

Other possible changes from the governor's proposal included a new formula for distributing Medicaid funding to hospitals and tuition caps for public colleges.

Corzine, a Democrat seeking reelection in November, would like a smooth budget negotiation. But Democrats hold a slim margin in the Senate, 23-17, which means only a small number could halt the entire budget process. Members of the Assembly also face reelection challenges in the fall.

Sen. Jeff Van Drew (D., Cape May) has said he would not vote for the budget unless funding for beach replenishment is restored.

He is not counting on smooth sailing for the budget.

"My gut is, it's not going to be pretty, but that it will pass," Van Drew said.