Governor Pitches Budget Relief Idea to Municipalities

ATLANTIC CITY – Recognizing that local governments are suffering a substantial financial burden as a result of the current economic recession, Gov. Jon S. Corzine on Thursday, Nov. 20 announced a plan to help ease their near-term budget crunch – and keep property taxes in check – by allowing counties and municipalities to temporarily defer 50 percent of next April’s payment into the employee pension system.
“By taking this unusual, but necessary step, my intent is to help our municipalities get through this recessionary period and, at the same time, dramatically reduce the pressure on property taxes,” Corzine stated in a release.
The governor announced the plan at the annual New Jersey League of Municipalities conference.
The deferral proposal – which requires action by the state Legislature – would only be temporary, and would require 100 percent funding by 2012. Corzine said this move must come in conjunction with across-the-board budget cuts across all levels of government, common-sense fiscal management, and relief to taxpayers.
“As much as I prefer another course, I proposed this deferral simply as a practical bridge over today’s economic circumstances while reflecting the state’s reduced fiscal capacity for direct aid,” the governor stated. “Given the unprecedented nature of the deferral, this action must translate into property tax relief, not business-as-usual tax increases.”
Corzine reiterated that the state budget situation may require an additional $1.2 billion in cuts and that an additional $1.7 billion in cuts may be required in the upcoming budget year – pushing total state spending down near the $30 billion mark.
In recent budgets, he said, New Jersey has seen substantial savings by trimming the state workforce by 4,000 employees, elimination of departments, and requiring cost sharing for employee benefits – but more is needed. But by taking these steps early, Corzine said, New Jersey is actually in better shape than many neighboring states.
Noting that a package of bills connected to his economic stimulus and recovery program are quickly moving through the legislature, Corzine said he remains committed to providing relief to Garden State residents and promoting business and job growth.
Portions of the stimulus program include food, housing and heating relief; a job creation incentive program for businesses; corporate tax reforms; and the acceleration of $4 billion in public works projects to create new jobs.
“In these unprecedented times, there is much we can work on together – some addressed, others still to be considered,” the governor stated. “There is no excuse for us not to explore every idea, pursue every opportunity and work every day to help New Jerseyans get through these painful times.”