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Corzine budget plan puts focus on state aid for towns, cities

TRENTON, N.J. - Mayors may be furious over Gov. Jon S. Corzine's plans to cut and eliminate aid for small towns, but his proposal has at least sparked debate over the convoluted way the state sends money to towns and cities to help quell property taxes.

The Democratic Corzine is proposing a 10.5 percent cut in aid for municipalities, with the 323 towns with less than 10,000 people targeted for the heftiest deductions.

He's still proposing giving New Jersey's 566 municipalities $1.8 billion, or about 5.5 percent of his $33 billion plan that calls for major spending cuts to try to fix state finances plagued by annual deficit, high debt and taxes and sagging revenues.

But as mayors protest proposed cuts, many also wonder how the state even decides to begin with how much money to send to each of its 566 communities.

Ev! en Corzine, a former Goldman Sachs chairman, concedes it's hard to comprehend, saying it's decided by complex laws cobbled together over several decades.

"There doesn't really appear to be any rhyme or reason," acting state Treasurer David Rousseau said.

Rousseau said the administration needs to examine how it rewards aid for towns and cities and maybe devise a new plan, much like it devised a new school funding plan last year.

"We need to look at that," Rousseau said. "I don't have any doubt about that."

Legislators, who plan to continue budget hearings in the week ahead, have their own ideas, and they don't include cutting aid to small towns.

"The governor's budget presumes that small is bad," said Sen. Gerald Cardinale, R-Bergen. "I don't see that."

He said the state should look at which municipalities pay the most per person and penalize high spending towns.

Sen. Joseph Kyrillos, R-Monmouth, sponsored a law creating a commission! that will ask voters to merge towns to try to save money.

The c ommission hasn't met yet, and Kyrillos urged the administration to get it moving before seeking aid cuts that would take effect on July 1.

"I don't think you can force these consolidations in three months, even though I feel strongly about it," Kyrillos said.

Sen. John Adler said the state should look at county and local governments and penalize those increasing work forces.

"Whether it's the small towns or biggest cities or anyone in between," said Adler, D-Camden.

Corzine's plan would cut state funding for property tax rebates, municipalities, state colleges and universities, hospitals and nursing homes. It would also impose new or increased health care co-payments for the poor and elderly, and deny a cost-of-living increase for groups that help the disabled, abused and others.

The state work force would be cut by 3,000 people through early retirements or layoffs and the state agriculture, commerce and personnel departments would be eliminated! .

Legislators are mulling their own spending cuts.

Kyrillos is among those urging Corzine to pursue tougher retirement benefit reforms for government workers.

"The governor could force these outcomes," he said. "It will pass."

Adler suggested keeping the Department of Agriculture and instead eliminating the secretary of state's office.

"It seems like we put things into that secretary of state's office just to give them a reason to exist," Adler said. "While we have a very good secretary of state, the department she oversees isn't necessary."

Assembly Budget Chairman Lou Greenwald, D-Camden, said no easy answers will be found amid a wary public.

"People are resistant to change," he said. "They are afraid of change in many cases even though they would acknowledge that the current system is failing. They'd rather have the devil they know than the devil they don't."




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