Governor Corzine with Additional Budget Cuts

I would like to take this time now to share with the public the additional budget cuts Governor Jon Corzine will be making to keep our state budget afloat during these harsh economic times. Also, as a part of Leadership within the New Jersey State General Assembly, the Speaker of the House Joe Roberts, along with Majority Leader Bonnie Watson-Coleman, and I, the Speaker Pro Tempore of the Assembly, it is our duty to manage postings of legislation. Thus when I am informed of information from the top, meaning from the Governor and my Leadership colleagues, I am also sure to relay that information to my district in its entirety. Therefore, in the spirit of fulfilling a duty as Leadership I am writing to inform my district of this newly announced budget information from our Governor. These sorts of information, budgeting and other important issues, are the types in which Leadership monitors, discusses, and shares. With that, here is the press release:

Governor Jon S. Corzine today announced a total of $3.6 billion in budget cuts and other actions to keep the state budget balanced in the wake of further declining revenues resulting from the national and global economic recession.

“We are in unprecedented times, and therefore unprecedented action is necessary to keep the state on sound financial footing,” Governor Corzine said. “With revenues continuing to trend downward, we must take appropriate steps to continue to live within our means.”

State Treasurer David Rousseau reported earlier today that state revenue collections for January fell $526 million – nearly 18 percent below projections. Through January, total revenues are now $1.33 billion under projections for Fiscal Year 2009, which translates to a $2.8 billion shortfall by the end of the fiscal year. In early January, Governor Corzine announced $2.1 billion in cuts and other budget-balancing measures based on revenue collections at the time.

Fiscal Year 2009 spending levels are now expected to come in at $31.6 billion, more than $4 billion less than projections when the budget process began last year.

Now, Governor Corzine said, the combination of a $2.8 billion shortfall and an additional $800 million in needed spending requires a total of $3.6 billion in cuts. Among additional spending needs is a replenishment of the Unemployment Insurance Trust Fund to prevent a statutory tax increase on employers of nearly 25 percent – a trigger that would further threaten the state’s economy.

“We have a legal obligation to balance the budget, and we also have a moral obligation – a duty to taxpayers – to ensure that we are fiscally responsible in the way we reshape state government,” Governor Corzine said.

The budget cuts and other action Governor Corzine announced include:

-A requirement that all state employees take two unpaid furlough days in May and June, saving $35 million;
-Redirecting $160 million in balances from dedicated funds to support programs currently supported by general taxpayer funds. About half of these funds will be used to help avoid the Unemployment Insurance tax increase;
-Requesting the Legislature to enact a Tax Amnesty Program, which is expected to generate $100 million;
-Utilizing $500 million that was previously set aside for debt relief and $200 million available from the Fiscal Year 2008 budget surplus;
-Accessing $450 million from the Rainy Day Fund.

In addition, the state is expected to receive about $850 million from the federal stimulus package, scheduled to be signed into law Tuesday afternoon by President Barack Obama.

“President Obama has acted quickly and decisively in addressing the national economic crisis, and in doing so, has helped ease the economic burden of an entire nation,” Governor Corzine said. “The measures the President has taken are particularly effective in concert with steps we took as a result of our Joint Session of the Legislature on New Jersey’s economy in October.”

Governor Corzine said these cuts, cost reductions and other actions are expected to total $3.6 billion, which will allow the state budget to remain balanced with a $150 million surplus.

“The cuts we have made so far this year are just part of the actions we will need to take to deal with this unprecedented economic crisis,” Governor Corzine said. “We hope the adjustments we make today will allow us to get through the year, but if revenues continue to decline, we will have to find additional actions to maintain our balanced budget obligation.”