newjerseynewsroom.com

BY TOM HESTER

NEWJERSEYNEWSROOM.COM

Gov. Jon Corzine Friday announced 850 additional budget cuts designed to reduce the present 2008-09 state budget by $150 million. The action means the governor has cut the budget by over $2 billion since it was approved July 1.

"These are tough but necessary choices," Corzine said. "The cuts we are making are unprecedented but we are experiencing a national economic crisis the likes of which we haven't seen in generations. We are living up to our fiscal responsibility as we face even more difficult choices in the next two months."

The cuts affect every state department.

The latest round of cuts come with seven weeks before the end of the fiscal year on June 30 and are in response to the steep decline in tax revenues collected by the state caused by the national economic downturn.

The administration proposes to close the additional $1.2 billion shortfall by taking $450 million from the $700 million state surplus fund. The action will reduce the surplus to $250 million.

The solutions announced Thursday include $150 million in spending cuts for departments and agencies. The balance of the $1.2 billion is offset by reducing the state's pension contribution by $150 million and moving costs originally scored for payment in the current fiscal year to the impending 2009-10 budget. Those expenses include a school aid payment and grants for the Business Employment Incentive Program.

With the revenue collections falling short of projections, we aggressively returned to line by line scrutiny of the budget to reduce or close out accounts to help New Jersey regain fiscal balance," Treasurer David Rousseau said.

Over the last two days, Corzine closed a cumulative current year shortfall of $4.4 billion. Approximately one-half of this shortfall was closed by budget cuts, while federal funding, including additional Medicaid aid, comprised approximately $700 million of the solution.

Sen. Anthony Bucco (R-Morris), the ranking Republican on the Senate Budget Committee, was among his party's legislators who criticized Corzine's budget maneuvers.

"Governor Corzine keeps sticking his fingers in the dike as new leaks in the state's revenue stream develop daily," Bucco said. "It's clear now that he's running out of fingers. Faced with a $1.2 billion budget problem, Governor Corzine has done what he has always done. He has pushed billions of dollars of debt and pension expenses off to another day - a day when he hopes against all reason and evidence that the state's economy will improve so dramatically, that the effects of his grossly irresponsible budget management will be erased by growing revenue."