Tags: US | NJ | Budget

New Jersey Gov Says State Faces $1.2B Budget Gap

Thursday, 21 Jan 2010 09:03 AM

Gov. Chris Christie began his tenure Wednesday saying he has inherited a $1.2 billion budget gap.

Christie, who rode a wave of voter discontent over soaring property taxes and other fiscal woes to unseat the incumbent Democrat, said he learned of the additional shortfall in the current state budget two hours after being sworn in Tuesday. He sarcastically referred to the deficit as a "parting gift" from former Gov. Jon Corzine.

Corzine's office disputed the new administration's numbers, saying Christie starts his term with a healthy surplus.

"If there is a lasting legacy of the Corzine transition, that's the headline of it — 'Time to take care of his pals — no time to tack care of the taxpayers of New Jersey,'" Christie said in reference to some eleventh-hour decisions by Corzine that involved additional spending.

The outgoing administration last week approved a $121 million appropriation to five distressed cities, made possible after a joint legislative budget committee agreed to transfer $44 million from the general fund to an account that dispenses extraordinary municipal aid. Mayors of the municipalities said tax increases and layoffs of police and firefighters would occur without the aid.

Christie said the money — $67 million for Camden, $27 million for Paterson, $14 million for Jersey City, $11.3 million for Union City, and $2.25 million for Bridgeton — was wired to the cities before he took office, so he was powerless to stop it.

Corzine identified more than $800 million in cuts to correct a budget shortfall in December, which occurred because tax collections are off in the poor economy.

Christie criticized the former administration Wednesday for failing to pass accompanying legislation that would allow the state to save $260 million in school aid by having school districts use their own surplus funds instead.

Richard Bagger, Christie's chief of staff, said the more dire budget picture is due to a combination of declining tax collections, increased spending and less surplus. For example, he said the new administration had identified $660 million in supplemental spending, $310 million more than identified by Corzine.

Corzine spokesman Josh Zeitz said the administration revised its supplemental spending projection to $581 million, from $350 million, on Jan. 11. He said Christie was left with a surplus of $496 million.

Christie said he planned to meet with his new Council of Economic Advisers on Thursday to figure out how to close the gap in the budget that extends through June 30. He did not rule out layoffs or furloughs.

Christie, who said recently that the cash-strapped state soon could have trouble making payroll, said the budget crisis is now a billion dollars worse.

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