07/03/2008
This week, Gov. Jon S. Corzine signed a $32.9 billion state budget for fiscal year 2009. The adopted budget decreases state spending by $600 million below the FY 2008 enacted state budget of $33.5 billion. The budget, passed along party lines was passed one week before the constitutional deadline. Unlike most past budgets, Corzine did not use his line-item-veto power to trim the budget further.
The budget calls for no new or increased business taxes, but does provide for the extension of the Transitional Energy Facilities Assessment surcharge, also known as the Utility Tax, through 2013. This tax was to begin phasing out in 2009, at a savings of $62 million to all electric ratepayers. The state will use this added revenue to fund hospital and Medicaid nursing home assistance.
After much debate, legislators also passed separate legislation that will modestly reduce benefits for newly hired state employees and provide early retirement incentives to permanently eliminate 2,000 state jobs. The reform also includes the elimination of one state holiday, raises the retirement age from 60 to 62, and allows state employees to waive health benefits if they are eligible for outside coverage.
Additionally, a constitutional amendment to require voter approval of all State debt was approved for the November ballot. The ballot will include a public question asking voters if any future state debt must be approved by the voters before it is issued. If approved, this amendment will ensure greater accountability for all future debt by empowering citizens to have the final say for such initiatives as school construction and open space preservation.
Other budget highlights include:
- The operating budgets of executive departments have been decreased by $193 million
- The Departments of Commerce and Personnel will be eliminated with the key functions being transferred to other appropriate agencies
- The budget reduces the current level of charity care by $76 million
- Municipal aid is reduced $170 million
- $9 million will be diverted from the shore protection fund to keep state parks open
- $194 million is allocated for the Business Employment Incentive Program (BEIP)
- $500,000 is appropriated for the New Jersey Small Business Development Centers, a 50 percent restoration of the proposed $1 million reduction
- $8 million is appropriated for the expansion of the NJ Family Care program
Republican leadership expressed concerns that the budget fails to reflect the priorities of New Jersey's residents and will ultimately contribute to making the state more unaffordable. Specifically, they state that the budget does not address the state's transportation needs and fear that the governor may again try to raise the gas tax or increase tolls to pay for transportation projects.
