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UPDATED
Declaring the deficit facing the upcoming 2010-11 New Jersey state budget is worst than he expected, Gov.-elect Chris Christie said Monday he has written outgoing Gov. Jon Corzine to ask him to freeze spending until he takes office on Jan. 19.
Christie and the co-chairman of a transition budget and taxes task force, Robert E. Grady and Richard Bagger, met with reporters in Trenton after a three-hour closed-door meeting on the issue.
“People voted for me because they wanted spending to be less,’’ Christie said. “They wanted government to be smaller.’’
Christie did not specify how he would confront what is expected to be a deficit of over $8 billion but he is standing by his pledge not to raise taxes. He said the task force would present recommendations for spending cuts in the coming weeks.Rob Corrales, a Corzine spokesman, said the governor in the past two months cut the current 2009-2010 budget by $400 million to help keep it balanced.
“He will take all necessary actions to ensure that they budget he turns over to the governor-elect is balanced,’’ Corrales said. “And he will review the details of the letter and take appropriate action with this fiscal principle in mind.’’
Grady, a former aide to Gov. Thomas Kean and President George H.W. Bush, said if departmental budgets continue to grow at their current rate, the deficit will grow beyond $8 billion even if an economic recovery for New Jersey kicks in and tax revenue increases.
“That’s a big number when you consider a budget of $28.5 billion,’’ Grady said.
Grady and Bagger said they intend to meet with Moody’s Investors Service, which earlier this year painted a grim picture New Jersey’s economic outlook, an action that could lead toward lowering the state government’s bond rating, making it harder to borrow money.
State Office of Legislative Services’ officials warned Corzine and legislators in the spring that the next budget would face an $8 billion deficit. Christie must approve his first balance budget by July 1.
Assemblyman Joseph Cryan (D-Union), who is also the state Democratic chairman, was unimpressed with Christie's concern over the deficit.
"Gov.-elect Christie gave few specifics in his campaign, and we're still getting the same political speak,'' Cryan said. "Considering the lingering impact of the global recession, it shouldn't be news to anyone that the state budget is in tough shape, as it is in states throughout the nation. Gov.-elect Christie needs to begin offering real solutions."
Here is the letter Christie had hand-delivered to Corzine's office.Dear Governor Corzine:
I am writing to follow-up on our conversation last week, and to thank you for your kind and gracious offer to take all possible steps to ensure a smooth and orderly transition. During that discussion, you indicated that you would be taking additional steps to address weak revenue collections that threaten to deplete this year's planned budget surplus and aggravate next year's multi-billion dollar structural budget deficit.
As you know, I am deeply concerned about the state of New Jersey's economy and the effects that the deepening fiscal crisis for both fiscal years 2010 and year 2011 could have on New Jersey taxpayers.
In order to prevent the crisis from worsening and budget hole we are in from deepening during this critical transition period, I respectfully request that you take the following actions:
1) Place all discretionary grant and state aid accounts, including, but not limited to, Special Municipal Aid and Extraordinary Aid, in reserve.
2) Freeze all new paid appointments and re-appointments to boards and commissions.
3) Line item veto any legislation with a fiscal impact on the State budget.
4) Veto all discretionary spending items in authority minutes.
5) Freeze all professional service, public relations, and consulting contracts.
6) Freeze all pending regulations that would incur additional spending.
7) Freeze all nonessential hires, promotions and raises.
8) Freeze all non-contractual personnel actions, including title changes and transfers.
9) Freeze all transfers of funds and directory letter appropriations.
10) Freeze all new leases, long term purchasing contracts and other long term obligations including certificates of participation.
11) Freeze the retention of all new outside professionals, manager selections, and new contracts for managing alternative investments with respect to New Jersey's pension funds.
12) Advise and provide advance notice to transition staff and major financial transactions.
13) Strictly enforce, and refrain from relaxing, any existing spending constraints and financial controls.
14) Hold 50% of all operating accounts in reserve to ensure that agencies are not spending more than half of their operating budgets prior to the commencement of the second half of the year.
As we have advised your staff, I have named two experienced New Jersey natives and budget experts, Bob Grady and Rich Bagger, as Co-Chairmen of the Transition Task Force on Budget and Taxes.
I have asked them to assemble a team to make recommendations to address the budget crisis and put New Jersey on a more sustainable fiscal footing. I ask that your staff continue to cooperate with them in providing information and assistance.
I appreciate your cooperation on these vitally important matters.
With best wishes,
Yours sincerely,
Chris Christie
Governor-Elect
Cc: David Rousseau, Treasurer
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM
