Share this Twitter Myspace Digg Del.icio.us Reddit Slashdot Furl Yahoo Technorati Newsvine Facebook Export PDF Print E-mail Tags sidamon eristoff budget deficit billion greenwald fiscal administration state cuts treasurer committee school told effect action legislature christie aid 2010

Sidamon-Eristoff says he's now confronting $11 billion 2010-11 deficit

BY TOM HESTER SR.

NEWJERSEYNEWSROOM.COM

Amid a polite but tense exchange of words, the state treasurer told the Assembly Budget Committee Monday that the Christie administration has settled on the cuts and freezes it wants to take to close a $2.2 billion deficit in the 2009-10 budget and has moved on to confront a potential $11 billion deficit in the 2010-11 budget.

Treasurer Andrew Sidamon-Eristoff told the committee that the state Office of Management and Budget had been working to find solutions to the $2.2 billion deficit before the Christie administration took office to help develop the 375 cuts any spending freezes the governor approved earlier in the month.

"They worked for months to identify solutions, overfunding situations, account balances, they scoured the budgets of every agency in state government,'' Sidamon-Eristoff said. "That is how these decisions were keyed up. There was no time to involve zero-based budgeting. We had to act quickly to close the gap. We reviewed many hundreds of options.and at the end of the day we had to select most of them because we are facing a very severe budget gap. That action has been taken, now we are focused on fiscal 11. We have roughly three weeks to develop a plan for fiscal 11. Fiscal 10 is over.''

Sidamon-Eristoff was responding to comments made by Assemblyman Louis Greenwald (D-Camden), the committee chairman, and other Democrats on the panel that the administration did not consider the "ripple effect'' of the cuts and that they could lead to property tax hikes, more unemployment, less medical care for the poor, and hurt local business.

Greenwald complained the administration made no effort to seek the input of legislators before making the decisions on the eliminating the deficit, telling Sidamon-Eristoff, "You could have picked up a phone.

"It may be over from a fiscal standpoint but it is not over from a real life standpoint,‘' Greenwald said. "These changes did not include us and we are closer to the ground. The impact on some of these programs is real and severe.''

"These were the only cuts available,'' Sidamon-Eristoff replied.

The administration has proposed cuts or spending freezes to 375 state programs and accounts to balance the 2009-10 budget before it expires on June 30. It also has until March 16 to develop a proposed 2010-11 budget that would overcome a potential deficit of as much as $11 billion that would go into effect on July 1.

Later, Sidamon-Eristoff did tell the legislators the administration intends to work with them on settling the 2010-11 budget.

In an effort to eliminate the $2.2 billion 200910 deficit, Gov. Chris Christie and Sidamon-Eristoff have cut, among other things, $475 million in aid to over $500 school district, $32.7 million to NJ Transit - an action that is expected to spark a fare increase - $12.6 million in charity care aid to hospitals,

When committee members asked Sidamon-Eristoff if some of the proposed cut would be restored if the state takes in more tax revenue than expected in the last four months of the fiscal year, the treasurer replied, "I don't have any reason to expect we will get a revenue windfall during the rest of year. We are now focused entirely on fiscal 11.''

Grenwald said officials with the Hunterdon Central Regional School District told him that losing school aid will force them to use a surplus they had set aside for six building improvements programs, including $1 million for a new heating system. He said the Cherry Hill and Collingswood school districts have complained they will have to layoff staff.

"Were you aware of the ripple effect as we go down the line?'' Greenwald said to Sidamon-Eristoff. The Assemblyman said the school aid cuts would lead to unemployment, property tax hikes and loss of business to contractors.

Sidamon-Eristoff told Greenwald action by the Legislature may be needed to approve the transfer of fund balances as part of solving the $2.2 billion budget deficit.

Greenwald said he believes legislative action may be needed on transferring, cutting or freezing at least $1.1 billion.

"The Legislature may be required in order to move fund balances,'' Sidamon-Eristoff said, "but, and I say this with the highest respect, the Legislature was not needed to freeze those expenditures and that is what happened.''

Greenwald said he would approach Christie's chief counsel for an opinion on what the Legislature role is in confronting the deficit.

Assemblyman Joe Malone (R-Burlington), the ranking Republican on the committee, told Sidamon-Eristoff, "Treasurer, I don't envy you one bit. The task you have ahead of you is probably the most daunting any treasurer has had to face in the state of New Jersey. We look forward to working with you in a way that is rational and reasonable and a bipartisan way. The task you have ahead of you is going to effect every way of life in New Jersey. We all knew this day was coming, it is not like a bolt of lightening out of the blue.''