TRENTON – Gov. Chris Christie said that New Jersey is in a “state of financial crisis” and outlined cuts to address a $2.2 billion gap in this year’s budget before a joint session of the Legislature this morning.
“Our state’s budget has been left in a shambles and requires immediate action to achieve balance,” Christie told lawmakers. “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.”
New Jersey’s constitution requires a balanced budget, so government spending must be reduced to account for diminished revenue. Christie plans to freeze $1.6 billion in unspent money, including $475 million in public school aid, $62 million for colleges and $12.6 million in aid to hospitals.
The school aid cuts will force districts to use budget surpluses to pay costs for the remainder of the fiscal year, but should not have any immediate effect in classrooms according to the governor.
Christie will also cut 375 programs that he deems inefficient, including the Corzine-era “InvestNJ” program that offered businesses a $3,000 grant for creating new full-time jobs.
“The ‘InvestNJ’ program has a large unspent balance and a failed record in actually creating new jobs,” Christie said. “We can save taxpayers $50 million by terminating this program now. Instead, I believe we should create, without significant public expense, a one stop shop to clear away obstacles and speed the path to job creation – the New Jersey partnership for action.”
Christie also said he would cut the state subsidy for NJ Transit, while acknowledging the move could lead to fare hikes or service cuts. “The system needs to be made more efficient and effective,” he said.
Assembly Transportation Chairman John Wisniewski (D-Middlesex) said that the governor’s plan for NJ Transit “will equate to reduced services or higher fares, and let’s face it – if Gov. Christie raises fares he will be increasing taxes on working families who have no other choice but to use public transit day-in-and-day-out to get to work.”
Other victims of the budgetary axe include the Public Advocate’s Office and the Clean Energy Fund, which offered matching grants to people who make energy-efficient upgrades.
Before addressing the Legislature, Christie signed an Executive Order that says “until such time as the current state of fiscal emergency is terminated, I reserve the right to take such additional actions, invoke such additional emergency powers and issue such emergency orders or directives as may be necessary to meet the potentially devastating problems presented by this emergency, to protect the health, safety and welfare of the people of this state, and to ensure the continued provision of essential state services.”
Reaction from legislators fell sharply along party lines. Democrats criticized the governor for imposing cuts through executive order and for reducing education spending.
“So much for a handshake,” said Sen. President Stephen Sweeney (D-Gloucester). “Governing by executive order and keeping plans secret until the last minute is not bipartisanship. Sure, these cuts will close the budget gap, but they do so in an irresponsible manner.”
“One must even question the legality of the Governor’s executive order. It would appear that he is using the pretext of a fiscal emergency to try and exceed his executive powers to act as a legislative body and rewrite this year’s budget by making school aid cuts; raiding various funds; and authorizing additional spending. This is akin to imposing martial law, a far cry from his pledge of cooperation on Inauguration Day,” said Senate Majority Leader Barbara Buono (D-Middlesex).
“I fear Gov. Christie’s plan to slash education aid will hurt our children and increase the crushing property tax burden facing our taxpayers, said Assembly Speaker Sheila Y. Oliver (D-Essex). “This would especially hit our hard-working middle-class and poor hard amid an ongoing recession.”
Republicans praised Christie’s willingness to make tough choices and balance the budget without increasing state taxes.
“The governor inherited a massive and unprecedented financial problem, but instead of raising taxes as Corzine did when he took office so he could increase state spending, the plan Christie outlined today is a dramatic break with the misguided policies of the past that only perpetuated our problems and made them worse with each passing year,” said Assembly Republican Leader Alex DeCroce (R-Morris & Passaic).
“The governor prescribed tough, but necessary medicine to fix our current budget crisis,” said Assembly Republican Conference Leader Jon Bramnick (R-Union). “Everyone agrees the solutions are painful, but it is time to recognize the old ways of operating the state have failed. Our dire financial condition requires making difficult decisions and today’s actions by the governor show he is ready to move New Jersey forward.”
Marie S. Bilik, the executive director of the New Jersey School Boards Association, has a measured response to the governor’s planned education cuts.
“Understandably, the state has limited options,” she said. “It is important to understand the ramifications of requiring districts to spend down their reserve funds. Even though the governor’s decision may not affect school programs immediately, school districts next year will need to set aside new money to rebuild those reserves. And these are funds that they will not be able to direct to the classroom or use to control property taxes in 2010-2011.”
New Jersey Education Association President Barbara Keshishian was less understanding.
“NJEA’s goal is to protect the best public education system in America, and we will never abandon that goal. It is the responsibility of the governor and the legislature to ensure that today’s public schools – and those of tomorrow – have the resources they need to educate the next generation of children at the highest levels,” she said. “Cutting their budgets is not the path to that goal. It is the path to educational ruin.”
Environmentalists also blasted the governor’s planned budget cuts, which also included funding for parks and the Department of Environmental Protection.
“This is an anti-environmental snow job by the Christie Administration,” said Jeff Tittel, NJ Sierra Club Director. “This is bad for the economy and bad for the environment. It will lead to the loss of green jobs and more pollution.”
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