Budget 2009: Back on Center Stage
Posted June 20, 2008

All New Jersey political eyes were on Trenton yesterday as the State Senate and Assembly Budget Committees considered the proposed $32.9 billion fiscal year 2009 state budget. On Wednesday, the Courier Post had predicted a potential “quick OK” to the budget which, as the news article notes, “increases spending by a net of nearly $35 million above what Corzine proposed in February, but that is more than offset by $135 million in savings on debt payments realized by putting aside $650 million in this year’s budget – from unexpected tax collections this spring – to pay off bonds.”

Despite the Courier-Post’s optimism, however, its cheery prediction did not materialize.  Instead, while the Assembly Budget Committee gave the budget a ‘thumbs up’ for a vote by the full Assembly on Monday, the Senate Budget Committee fell short of doing the same. Instead, Senators unable to come to an agreement, determined to come in today for an unscheduled budget session to attempt to hammer out their differences.

According to the Courier-Post, in all, the proposed $32.9 billion budget is approximately $600 million less than last year’s budget and approximately $100 million less than the budget initially proposed by Governor Corzine in February. And while some, like Assembly Budget Committee Chairman Lou Greenwald (D-Camden) believe that the budget is good overall – Greenwald stated, “More money goes back to the property taxpayer in this budget than any other in the history of the state.” – others, are less optimistic.

For example, Assemblyman Joseph Cryan (D-Union), stated, “I really have a problem with this budget. I really do. We’ve got a lot of work to do before Monday.” And Assemblyman Joe Malone (R-Burlington), said, “The budget will simply shift costs from the state to the local level, which will hurt property taxpayers.”

Indeed, taxpayers at all levels are hurt to some degree in the proposed budget. For example, households with incomes above $150,000 will no longer receive a property tax rebate, and the consumer-paid public utility tax – which was set to expire – has been extended. Even with concerns however, the Assembly committee approved the proposal.

On the Senate side, Newsday.com reports that, according to Senate Budget Chairwoman Barbara Buono (D-Middlesex), differences of opinion centered around “legislation that would implement the budget, cut benefits for newly hired government workers and teachers and approve borrowing up to $3.5 billion for school construction.” But although the Senate Budget Committee wasn’t able to clear the budget for a vote by the full assembly, it did manage to approve three bills, which, respectively, would “extend a utility tax that was supposed to phase out [as mentioned above], divert $9 million from shore protection to keep state parks open and tap $684 million from this year’s surplus to retire state debt.” The Assembly has already agreed to the $9 million for state parks.

The Senate Budget Committee is scheduled to reconvene this afternoon to attempt to come to an agreement on the budget and the additional funding measures under consideration. The deadline for passing a balanced state budget is July 1.

As the two legislative chambers work to resolve differences and pass a budget, no doubt fiscal winners and losers will continue to emerge. Be sure to check back for next week’s Musings where we will break down the latest news and information regarding New Jersey’s 2009 spending plan and what it means for you.

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