NEWS RELEASE

Governor Jon S. Corzine
February 26, 2008

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GOVERNOR CORZINE INTRODUCES BUDGET WITH REDUCED SPENDING
Calls budget a “turning point” but cautions continued burden of $32 billion in state debt

TRENTON - Governor Jon S. Corzine today took the first step in righting the state’s financial ship by introducing a $32.9 billion budget that cuts spending by $500 million compared to the current year budget of $33.4 billion. The budget contains no new or increased taxes and protects the core responsibilities of government including education, public safety and care for our most vulnerable. In order to achieve the overall budget reduction of $500 million the budget proposes spending reductions totaling approximately $2.7 billion to offset rising healthcare, energy and contractual costs. The budget does not address the state’s $32 billion debt.

“I have heard firsthand the public’s frustration generated by too many years of overspending, borrowing and false rhetoric.” Governor Corzine said. “In this budget, government takes the spending hits, not our hard-pressed taxpayers or the most vulnerable.”

This year’s budget continues the administration’s progress in cutting the size of the state workforce, which has already been reduced by nearly 2,000 employees since the Governor took office in January 2006. The new budget eliminates an additional 3,000 jobs through a combination of an early retirement program, attrition and layoffs. To ensure that savings from these job reductions are permanent, funding for the positions will be eliminated. In addition to reducing and limiting the size of the state workforce, the budget also reduces spending in every department of the Executive Branch and eliminates the Departments of Commerce, Agriculture and Personnel. These movements towards a smaller state government garner approximately $350 million in savings. Additional savings have been achieved elimination of all non contracted inflation adjusted spending, rendering savings of $800 million.

“This budget is a turning point in our work to right our state’s finances, but it does not address New Jersey’s crushing debt load of $32 billion,” Governor Corzine said. “Our debt payments will continue to consume an ever increasing percentage of the state budget crowding out priorities such as education, municipal aid and property tax relief.”

While austere, the FY2009 budget still dedicates more than 50 percent of all spending, $16.7 billion, to property tax relief. The budget preserves homestead rebates averaging $1,000 for 1.6 million homeowners. In all, 90 percent of homeowners will continue to receive rebates while 1.2 million homeowners, or 70 percent, will receive the same rebate amount they received last year.

The budget will also include a $190 million reduction in the level of aid to municipalities. A portion of which will be targeted towards municipalities with populations of less than 10,000. This group of towns will be given priority standing in the awarding of grants from a state fund that encourages consolidation of shared services. Reductions to grant and aid funding have been apportions across the board, from support of hospitals and higher education institutions to health care programs and funding for the arts. All in total, reductions in grant and aid funds garner approximately $1.35 billion in savings.

The Governor’s budget proposal asks for the second-largest cut in year-to-year spending of any budget in state history and is only the fourth budget since 1951 with a year-to-year spending reduction. Furthermore, this budget does not take into account any financial benefits that would be gained from a monetization proposal. Additionally, the FY10 budget is already facing a $1.7 billion structural deficit.

The Governor’s budget message and a summary of the budget are available online at: www.nj.gov/governor

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Photos from Governor Corzine's public events are available in the Governor's Newsroom section on the State of New Jersey web page, http://www.nj.gov/governor/news/