ATLANTIC CITY – Gov. Jon Corzine announced a plan to help municipalities facing a short-term budget crunch at last week’s New Jersey League of Municipalities conference. Counties and municipalities would be able to defer half of next April’s payment into the employee pension system.
Corzine said the deferral would only be temporary, and full funding would be required by 2012.
“By taking this unusual, but necessary step, my intent is to help our municipalities get through this recessionary period and, at the same time, dramatically reduce the pressure on property taxes,” the governor said.
If the legislature approves the governor’s plan, it would offer $540 million in short-term relief to local government. “It represents the best available option in difficult times,” said Assembly Speaker Joseph J. Roberts Jr.(D-Camden.)
Not everybody is convinced.
“The state is in this position now because of the very poor fiscal policies of the last eight years,” said Senate Majority Leader Thomas Kean Jr. (R-Union), referring to Democratic control in Trenton. “Pushing some of these payments back might get immediate savings, but in the end these governments will have to deal with increased costs.”
“This plan does not save taxpayers any money,” said Sen. Kevin O’Toole, (R-Essex.) “Property taxpayers will shoulder an even greater tax burden in the three years following the gubernatorial election as municipalities raise taxes to pay for this year’s pension obligation,”
Corzine is up for re-election in 2009, along with the entire state Assembly.
The chronically under-funded state pension system has lost nearly $24 billion since June due to the stock market collapse, including a $9 billion loss last month.
The governor signed a $33 billion state budget this summer, but the faltering economy is lowering the projected tax revenue collections. The administration is now trying to find ways to bring the budget down to near $30 billion. Spending cuts, including cuts to the property tax rebate program, and layoffs of state workers are among the solutions being considered.
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