Christie: N.J. budget picture worsening

TRENTON - Gov.-elect Christopher J. Christie got his first up-close look yesterday at the biggest challenge of his new job, and the picture was even uglier than widely expected.

The budget deficits for this fiscal year and the next one are getting bigger, Christie said after meeting with top officials in Gov. Corzine's Treasury Department.

Christie and his budget advisers said revenues in the current fiscal year have continued to slip, and the shortfall next year will likely be larger than the $8 billion projected by nonpartisan analysts. They would not provide specific figures.

"The policies of the past eight years have created a fiscal mess that is almost mind-boggling," Christie said.

In a crowded news conference at his transition office, located a few blocks from the Statehouse, Christie said voters had chosen him to make the difficult choices needed to balance the budget, cut taxes, and repair state finances for the long term.

Making his first extended comments on the budget since his election, he called New Jersey's finances the "most serious" problem the state faced and pledged to attack them "like a one-term governor."

"We are going to make decisions that put this state on the long-term path to fiscal health, no matter what the ramifications of that are," Christie said.

He said he expected to have the state back to "fiscal health" by the end of his first term, though he said that would involve much pain.

He gave no specifics when it came to what spending he might cut or how the growing shortfall might affect his pledge to slash taxes.

"I don't know how it's going to affect it, but I will tell you this: We are not going to balance this budget by increasing taxes," Christie said.

He said he would await advice from his transition team on how to cut spending and when and by how much to reduce taxes. Former State Sen. Richard Bagger and Robert Grady, a onetime aide to Gov. Thomas H. Kean and President George H.W. Bush, will lead Christie's transition effort on budget and taxes.

Christie was widely criticized during the campaign for refusing to detail his tax-cut plans, but he said yesterday it was more responsible not to make specific promises because "I had a sense that things were getting worse."

The chairman of the state's Democratic Party, Assemblyman Joseph Cryan (D., Union), said it was time for the governor-elect to put concrete plans on the table.

"We're still getting the same political-speak," Cryan said in a statement. "Considering the lingering impact of the global recession, it shouldn't be news to anyone that the state budget is in tough shape. . . . Gov.-elect Christie needs to begin offering real solutions."

Corzine already has called for the Legislature to hold the line on spending during the final months of his term. Last month, as revenue figures showed a shortfall of 3.1 percent, or $190 million, for the first quarter of the fiscal year, the governor cut $206 million in spending. He has called on his cabinet to find an additional $200 million in savings.

"Gov. Corzine is committed to maintaining fiscal responsibility," Corzine spokesman Robert Corrales said in a statement. "He will take all necessary actions to ensure that the budget he turns over to the governor-elect is balanced."

Christie's transition team sent Corzine a letter asking him, among other things, to freeze discretionary spending, hiring, and professional service contracts, and to veto new appropriations. Christie staffers will review the suggested cuts and offer their own ideas, Bagger said.

There may be few popular ways to reduce spending, however. Bagger said the cost of running government has shrunk, as a share of the budget, over time. It now makes up about 21 percent of the state's $29 billion spending pace.

Nearly 75 percent of the budget is made up of grant programs or town and school aid that pays for items that otherwise might be cut - or funded through property taxes. Christie has said he will not cut aid to schools, which accounts for about 28 percent of the budget.

Through boom times and recessions since at least 2002, when Gov. Jim McGreevey took office after eight years of Republican control, New Jersey's governors have opened each fiscal year with a multibillion-dollar deficit. Christie said McGreevey used "obscene" fiscal policy that made matters worse.

The problem has put upward pressure on taxes and limited spending on top priorities. The Pew Center on the States last week ranked New Jersey among the 10 states most at risk for financial calamity.

When he found out just how much of a problem he would inherit, Christie said, he gave a rueful chuckle.

"I mean, what are you going to do? This is the job," he said. "You're not going to hear this governor whine and moan and complain about how hard this job is."

He added, "I know the job of being governor of New Jersey isn't easy."