TRENTON – Gov. Chris Christie pledged to follow “a completely new course” during his first state budget address on Tuesday afternoon. He promised a new era of fiscal discipline and lower taxes as he introduced his $28.3 billion spending plan.
But New Jersey residents will be forced to sacrifice under Christie’s budget. Property tax rebates would be suspended in 2010, saving nearly $850 million. They would return as quarterly credits on tax bills beginning in May 2011, but only the first credit would be funded in this budget; future quarters would fall under the next fiscal year.
The “senior freeze” program that controls property taxes for senior citizens would not be open to any new enrollment.
School district aid would be cut by $819 million, or 7.4 percent, and municipal aid by $446 million, or 23 percent. Support for higher education would be reduced by $170 million through cuts to colleges and scholarship programs.
A tax credit for the working poor would be reduced to save $45 million. Welfare for “able-bodied” residents would be eliminated, saving $23.4 million. Child care programs would be cut by $20 million. A $310 deductible would be instituted for Medicaid and the Pharmaceutical Assistance to the Aged and Disabled prescription drug program, and co-pays for brand name drugs would rise to $15, from $7. Those changes save $93 million.
Christie chose not to ask for any major tax increases – he vowed to veto any that reach his desk from the legislature. The governor declined to renew an income tax increase on filers earning at least $400,000 per year.
The governor urged legislators to cap annual property increases at 2.5 percent through law in 2010 and via a constitutional amendment in the future. He also called for a 2.5 percent cap on state spending growth.
The governor called for changes in collective bargaining and benefits calculation formulas to help municipalities and school districts remain within these limits.
Christie’s budget would pay none of the state’s $3 billion pension obligation, adding to an already-staggering deficit. “Our pension system must be reformed before we can or should fund a broken, out of control system,” he said.
Democrats, predictably, were opposed to many of the governor’s proposals.
“The General Assembly will significantly cut spending and consider the governor’s initiatives, but we cannot blindly move ahead without examining the impacts on working class New Jerseyans, senior citizens, children and those less fortunate,” said Assembly Speaker Sheila Y. Oliver (D-Essex).
Business leaders were pleased with Christie’s new course.
“These cuts will be difficult—but they’re doable,” said Laurie Ehlbeck, state director of the National Federation of Independent Business/New Jersey. “Small businesses throughout New Jersey have dealt with much worse in weathering this recession. And if our smallest employers can find ways to cut back and find savings to keep their doors open, so can state and local government. At the very least, it’s time for them to finally try.”
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