Christie May Propose Cutting N.J. Budget to $25 Bln (Update3)
March 10, 2010, 2:54 PM EST(Adds school aid to first paragraph.)
By Terrence Dopp
March 10 (Bloomberg) -- New Jersey Governor Chris Christie may propose reducing state spending by a record 14 percent, including cuts to property-tax rebates and school aid, according to two people with knowledge of budget talks.
Christie’s budget may be $25 billion to $27 billion and contain a total of $10 billion in spending reductions that also would lower funding for the state’s 566 towns and cities as he seeks to close an $11 billion deficit, the people said. The governor, 47, told lawmakers last week in a conference call that the state anticipates $27 billion in revenue for the fiscal year starting July 1, one of the people said.
Christie’s spokesman, Michael Drewniak, declined to comment. The Republican governor is scheduled to present the first budget of his term to lawmakers on March 16. He took office in January.
“The things I’m going to propose next week are going to anger people,” Christie said yesterday at a town hall meeting in Haddon Heights. “But I will tell you that it’s going to be fair. We will cut everyone. I’m just trying to fix the problems we have. I would love to play Santa Claus, but I can’t.”
The reduction, if approved by the Democratic-controlled Legislature, would mark the third consecutive year-over-year decrease in New Jersey’s outlays. Former Governor Jon Corzine, a Democrat who lost to Christie in November amid voter backlash at the state’s deteriorating fiscal condition, cut the budget by a then-record $3.9 billion, or 12 percent, to arrive at the $29 billion spending plan approved in June.
Property Tax Rebates, Schools
Mid-year spending cuts reduced the size of the current budget to about $28 billion, said Andy Pratt, a spokesman for Christie’s treasurer, Andrew Eristoff.
Christie’s plan for next fiscal year may eliminate or scale back the state’s $1.1 billion property-tax rebate program, which gave more than 1 million New Jersey homeowners checks averaging $1,000 last year. The state’s highest-in-the-nation real estate levies averaged $7,281 last year, up from $7,045 in 2008, according to data released Feb. 26.
The new governor has also warned New Jersey’s almost 600 school districts to plan for a 15 percent cut in state aid and told municipalities they also face a reduction in funding. The governor also will seek a reduction of charity care reimbursements to hospitals, one of the people familiar said. New Jersey’s constitution requires a budget that balances spending with projected revenue.
“New Jersey has never seen a challenge like it’s seeing this year. It’s stunning,” said Senator Kevin O’Toole, a Republican from Wayne on the budget committee. “Forget the one about a camel through the eye of a needle. We’re dealing with a Mack truck.”
--Editors: Mark Tannenbaum, Stacie Servetah
To contact the reporter on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
