Jon Corzine on Tuesday will become the first New Jersey governor in a decade to propose a state budget that cuts total spending, when he presents a plan that has no new taxes or fees, shrinks the state payroll by as many as 5,000 jobs and eliminates three departments, according to three individuals familiar with the budget.
Having pledged to keep total state expenses below the current $33.5 billion, the governor also will propose slashing state aid to towns and cities by about $100 million, and "charity care" funding for hospitals by as much as $200 million, according to the individuals, who requested anonymity because Corzine's plan had not been made public yet.
And while administration officials have said aid to school districts defined by New Jersey's school funding formula will increase by $530 million, overall school funding will be about the same as last year because of other reductions, not yet disclosed.
Having pledged to keep total state expenses below the current $33.5 billion, the governor also will propose slashing state aid to towns and cities by about $100 million, and "charity care" funding for hospitals by as much as $200 million, according to the individuals, who requested anonymity because Corzine's plan had not been made public yet.
And while administration officials have said aid to school districts defined by New Jersey's school funding formula will increase by $530 million, overall school funding will be about the same as last year because of other reductions, not yet disclosed.
In addition, the spending plan will eliminate rebates to about 152,000 homeowners. Administration and legislative officials said last week homestead rebates would be limited to families making no more than $150,000 instead of the current $250,000 limit. The nonpartisan Office of Legislative Services estimates that move will save more than $100 million.
Rebate amounts are expected to remain about the same. They averaged $1,051 for homeowners and $303 for renters last year.
Not since Gov. Christie Whitman proposed a slightly downsized budget in her re-election year in 1997 has a governor sought less spending than the year before. Last year, Corzine recommended a $2.4billion increase, and the budget he signed in June padded that by $200 million.
Like most of his speeches, the governor's third budget address has been written by Corzine himself, though aides helped fine-tune it. In keeping with the gravity of the occasion, the speech to be delivered in the Assembly chambers will be short and direct.
In his State of the State address last month, the Democratic governor, who faces re-election next year, vowed to freeze spending as part of a broad strategy to put state finances on sounder footing. He also called for new long-term controls on future spending and borrowing.
Corzine's complex plan to halve the state's debt and create a pot of cash for decades' worth of road projects has included a sharp increase in road tolls. But Corzine conceded last week the toll plan needs major retooling to have any chance to pass the Legislature.
The proposed budget does not include the estimated $600 million in savings the governor's tolls-for-debt plan would bring, the sources said.
The proposed budget would produce big savings by laying off about 1,000 state workers and offering incentives for 3,000 to 4,000 already eligible for retirement to leave this year. The total job cuts would come on top of the 1,850 net positions eliminated by Corzine since he took office two years ago. The full-time payroll now stands at 68,430.
The source confirmed the departments of Personnel, Agriculture and Commerce all face the ax, though the administration has not yet decided where their essential functions would be transferred.
Municipal officials are expecting to be one of the biggest casualties of the budget, which now funnels nearly $2 billion to the state's 566 municipalities. In addition to plans to reduce that amount by about $100 million, Corzine will propose cutting a $75 million inflationary adjustment that municipal representatives say they deserve under state law.
William Dressel, executive director of the New Jersey State League of Municipalities, said the combined cut would be "unprecedented" in scope and lead to either higher property taxes or layoffs of police, firefighters and other municipal personnel.
"It will have a catastrophic impact," he said. "It's a perfect budget storm, and the people who are going to take it on the chin are going to be the property taxpayers."
Such a reduction in state aid could force big cuts on the local level because Corzine last year signed a law seeking to prevent towns from raising property taxes by more than 4 percent.
Senate President Richard Codey (D-Essex) said that while cuts are inevitable, lawmakers will try to ease the pain where possible. The Democratic-controlled Legislature must adopt a final budget by July 1.
"If anyone thinks all of the cuts are going to be restored, they are wrong," Codey said. "That doesn't mean the ones that affect people the most we won't try every way possible to restore them, especially the ones that hit the middle class and the poor the most."
Rebate amounts are expected to remain about the same. They averaged $1,051 for homeowners and $303 for renters last year.
Not since Gov. Christie Whitman proposed a slightly downsized budget in her re-election year in 1997 has a governor sought less spending than the year before. Last year, Corzine recommended a $2.4billion increase, and the budget he signed in June padded that by $200 million.
Like most of his speeches, the governor's third budget address has been written by Corzine himself, though aides helped fine-tune it. In keeping with the gravity of the occasion, the speech to be delivered in the Assembly chambers will be short and direct.
In his State of the State address last month, the Democratic governor, who faces re-election next year, vowed to freeze spending as part of a broad strategy to put state finances on sounder footing. He also called for new long-term controls on future spending and borrowing.
Corzine's complex plan to halve the state's debt and create a pot of cash for decades' worth of road projects has included a sharp increase in road tolls. But Corzine conceded last week the toll plan needs major retooling to have any chance to pass the Legislature.
The proposed budget does not include the estimated $600 million in savings the governor's tolls-for-debt plan would bring, the sources said.
The proposed budget would produce big savings by laying off about 1,000 state workers and offering incentives for 3,000 to 4,000 already eligible for retirement to leave this year. The total job cuts would come on top of the 1,850 net positions eliminated by Corzine since he took office two years ago. The full-time payroll now stands at 68,430.
The source confirmed the departments of Personnel, Agriculture and Commerce all face the ax, though the administration has not yet decided where their essential functions would be transferred.
Municipal officials are expecting to be one of the biggest casualties of the budget, which now funnels nearly $2 billion to the state's 566 municipalities. In addition to plans to reduce that amount by about $100 million, Corzine will propose cutting a $75 million inflationary adjustment that municipal representatives say they deserve under state law.
William Dressel, executive director of the New Jersey State League of Municipalities, said the combined cut would be "unprecedented" in scope and lead to either higher property taxes or layoffs of police, firefighters and other municipal personnel.
"It will have a catastrophic impact," he said. "It's a perfect budget storm, and the people who are going to take it on the chin are going to be the property taxpayers."
Such a reduction in state aid could force big cuts on the local level because Corzine last year signed a law seeking to prevent towns from raising property taxes by more than 4 percent.
Senate President Richard Codey (D-Essex) said that while cuts are inevitable, lawmakers will try to ease the pain where possible. The Democratic-controlled Legislature must adopt a final budget by July 1.
"If anyone thinks all of the cuts are going to be restored, they are wrong," Codey said. "That doesn't mean the ones that affect people the most we won't try every way possible to restore them, especially the ones that hit the middle class and the poor the most."
Hospital officials and their legislative defenders were equally nervous about a reduction of "charity care" aid in the range of $200 million. This year, 51 hospitals and hospital systems received $716 million.
Sen. Joseph Vitale (D-Middlesex), chairman of the Health, Human Services and Senior Citizens Committee, said he expects any major reduction would be "fundamentally harmful" and could trigger more hospital closures. Muhlenberg Regional Medical Center in Plainfield last week became the fifth hospital in recent months to announce plans to close.
Vitale said that within a month he intends to introduce legislation that would revamp and try to stabilize state hospital funding as part of a plan to provide universal health insurance. "We will be working overtime to try to address this issue now," he said.
To keep the budget below the present $33.5 billion level, the governor would have to offset the school funding increase, rising pension and health care costs, salaries, debt payments and other costs where growth is locked in. That would mean slashing more than $2 billion in expenses elsewhere.
Lilo Stainton, the governor's spokeswoman, said Corzine will outline a plan "that reduces spending by billions. The budget will be austere -- it will reduce the size of state government, but also seek to protect property taxpayers and society's most vulnerable as much as possible."
Lilo Stainton, the governor's spokeswoman, said Corzine will outline a plan "that reduces spending by billions. The budget will be austere -- it will reduce the size of state government, but also seek to protect property taxpayers and society's most vulnerable as much as possible."
Joseph Doria, commissioner of the Department of Community Affairs, said his department already is feeling pinched by the loss of 140 positions since Corzine took office two years ago. For example, the former Assembly speaker said, while there is a new law requiring the DCA to inspect single- and two-family homes for lead contamination, a hiring freeze prevents the department from employing the 25 to 30 inspectors needed to enforce it.
Doria said while the public may be clamoring for budget cuts, they should prepare for fewer public services. "People want the services they believe the state should be doing, but they don't believe it costs money," he said.
Jeffrey Tittell, a lobbyist for the New Jersey Sierra Club chapter, said the Department of Environmental Protection "will collapse" if the governor continues to pare its payroll, which he said has shrunk by nearly 1,000 positions during the past decade.
While some are gearing up to fight the budget-slashing, Senate Minority Leader Tom Kean (R-Union) said Republican legislators are ready to help Democrats scale back the budget.
"We will support real cuts in government spending and we look forward on a bipartisan basis to find those cuts that are real and sustainable," he said.
"We will support real cuts in government spending and we look forward on a bipartisan basis to find those cuts that are real and sustainable," he said.
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