Skip to content
Link copied to clipboard

Christie balances budget with cuts

He sliced aid for education and health care. Critics say what he has done will mean a property tax increase.

TRENTON - Gov. Christie, in the first major budget decisions of his term, asserted broad executive powers yesterday to cut aid to public schools, health-care programs, public transportation, and a wide array of other areas, saying the steps were the beginning of his promised fiscal reform.

Christie acknowledged many cuts would hit valued programs, but said New Jersey "is in a state of fiscal crisis," with a $2.2 billion budget deficit, and its residents are "the most overtaxed citizens in America."

"Today, we come to terms with the fact that we cannot spend money on everything we want. Today, the days of Alice in Wonderland budgeting in Trenton end," Christie said in a speech to the Legislature.

Christie used an executive order to freeze around $1.5 billion of spending and erase surpluses in other accounts, asserting the power to unilaterally alter the budget. But Democrats who control the Legislature were angered by his methods, tone and targets for cuts. They said they were left out of the process.

"This is a property-tax increase that is being proposed; it is not the bold and brave changing and cutting of government that was promised to the taxpayers of the state of New Jersey," said Senate President Stephen Sweeney (D., Gloucester). "It's not an emergency. . . . It's called governing, and you need to govern and make decisions with the Legislature."

Christie's cuts, 375 line items in all, struck a broad range of areas. Most controversially, public schools will lose $475 million in aid - a reduction that will affect nearly every district, rich or poor.

Colleges will see a $62 million cut. Hospitals will absorb a $25 million aid reduction, half from the state and half from federal matching funds. Subsidies for NJ Transit were cut by $32.7 million, with budget documents indicating that a fare increase was likely. On health care, 11,700 legal immigrants who are not yet citizens will be taken off the state's FamilyCare health care program, saving $2.5 million per month. A $58 million jobs creation program, which gave tax credits for new hires, was scrapped and labeled as ineffective.

Christie will skip $100 million of pension payments, increasing the long-term deficit in the state's retirement funds. Administration aides noted that Christie had limited options, with the fiscal year more than half over.

Several hundred million dollars of savings, including $300 million of school aid cuts, came from proposals first raised by Gov. Jon S. Corzine in an attempt to leave Christie with a balanced spending plan, though some had not been enacted. Christie also relied on some added federal aid and $175 million of increased revenues. An additional $450 million was made up by taking back money from state programs with excess funds.

Christie delivered his plans in a 25-minute speech to a Legislature missing several members a day after a snowstorm blanketed the state.

The address included typical Christie bravado - "I am not happy, but I am not afraid to make these decisions either" - and barbs. Christie assailed the budget left by Corzine and lashed out at the pension and health benefits for public employees.

He urged lawmakers to go farther with their recently proposed benefit reforms and compared public employee unions' objections to those of young children.

"The special interests have already begun to scream their favorite word, which, coincidentally, is my 9-year-old son Patrick's favorite word when we are making him do something he knows is right but does not want to do - 'unfair,' " Christie said.

Republicans heartily applauded throughout the speech.

"These decisions will make the state more affordable today, and it sets the right course for long-term reform," said Senate Minority Leader Thomas H. Kean Jr. (R., Union).

Christie and the GOP noted that the next budget, beginning July 1, faces an even larger deficit.

Democrats, who control the Legislature, objected on several fronts. They said they had been left largely in the dark on the proposed cuts, receiving details shortly before the morning speech. They also questioned the legality of using an executive order to single-handedly cut state programs, noting that past governors have closed budget gaps without such methods.

Christie's order said "a state of fiscal emergency exists" in New Jersey, though he did not use emergency powers.

Instead, administration officials said he was using the governor's statutory authority to block spending. The officials, who briefed reporters but refused to be identified by name, said they needed to use an executive order to act quickly.

The biggest dispute was over school aid, which directly impacts school programs and the property taxes that largely pay for education.

The majority of cuts come from districts with surpluses larger than the 2 percent allowed by law. The administration is also cutting aid equal to 25 percent of districts' reserves for maintenance, capital projects or emergencies, or excess funds that emerged after they approved their budgets.

By taking from district reserves, Christie said, no program cuts would be needed this year.

"Not one dime out of the classroom," he said.

But Democrats said taking away surpluses and emergency funds punishes districts that planned ahead. Schools that need a new roof or boiler in the near future will now have to dip into taxpayers' pockets, Sweeney said.

In all, 564 districts out of 581 will be affected. Some will lose all of their remaining aid payments.

Camden will lose $8.1 million of state support. Pennsauken will take a $7.65 million cut.

Collingswood Schools Superintendent Scott Oswald said districts that "did the right thing" by saving were being punished.

Glassboro Superintendent Mark Silverstein said in an e-mail that districts hold reserves for emergencies, such as the overtime to remove snow this week. Without them, "the only place to make cuts is from bare bones education programming."

Labor leaders, meanwhile, noted Christie is reducing many programs while refusing to renew a Corzine income tax hike on filers earning $400,000 or more.

"Where is the statesmanship and the sense of shared sacrifice?" asked Bob Master, regional political director for the Communication Workers of America. "Lots of rhetoric, not a lot of fairness."

Christie's Budget Address

"New Jersey is in a state of financial crisis. Our state's budget has been left in a shambles and requires immediate action to achieve balance."

"Our conscience and common sense require us to fix the problem in a way that does not raise taxes on the most overtaxed citizens in America. Our love for our children requires that we do not shove today's problems under the rug only to be discovered again tomorrow. Our sense of decency must require that we stop using tricks that will make next year's budget problem even worse." - Gov. Christie

"So much for a handshake."

- Senate President Stephen Sweeney (D., Gloucester), sarcastically referring to Christie's handshake with the two top legislative leaders at his inaugural address last month.

"I don't envy him. I didn't run for governor, but this will be devastating to us."

- Collingswood Superintendent Scott Oswald, who also said he felt Christie's order unfairly penalized districts that "did the right thing" and saved money.

EndText