Christie signs New Jersey budget

TRENTON - Gov. Christie signed his first state budget into law Tuesday, declaring the spending plan would close an unprecedented $11 billion budget gap while protecting the state's most vulnerable citizens.

Even before signing the budget bill, the governor had turned his attention to the next item on his agenda, a constitutional amendment to cap property-tax increases at 2.5 percent annually. Christie has ordered a special session of the Legislature to discuss his proposal beginning on Thursday.

The $29.4 billion budget was largely identical to the one the freshman Republican governor presented in March, which cut spending across state government without increasing any major taxes. The administration said the budget adopted by the Legislature left "99.88 percent" of the governor's budget proposal intact.

Christie signed the budget bill into law Tuesday afternoon, just hours after the Legislature approved it in a marathon session and two days before the constitutional deadline.

"This budget deals responsibly with the fiscal nightmare we inherited and makes the tough and necessary choices to restore fiscal sanity to our state and begin fundamental reform," Christie said.

The governor closed the budget gap for the fiscal year that begins Thursday by skipping $3 billion in payments into the pension funds for government employees, suspending property-tax rebates for 2010 to save $850 million, and cutting aid to schools by $819 million and aid to towns by $446 million, among other steps.

Under the plan, the state will shutter the state Public Advocate's Office, reduce aid to the working poor under the state Earned Income Tax Credit by $45 million, and restrict enrollment to some low-income parents, including legal immigrants, in the state's FamilyCare health-insurance program for children and low-income parents. Child-care programs, affordable housing, after-school programs, and school breakfast and lunch programs were some of the other programs and services hit in the budget.

A program to freeze property-tax rates for senior citizens will accept no new applicants, to save about $28 million, and assessments on hospitals and ambulatory care facilities will be allowed to increase by up to $45 million.

While lawmakers of both parties spoke of the difficult choices they were forced to make because of the economy, Christie's fellow Republicans hailed the budget as a step in the right direction while Democrats argued that by cutting aid to schools and towns, it would lead to significant property-tax increases.

Assembly Republican Budget Officer Joseph Malone (R., Burlington) praised Christie's leadership "to get the finances and the economy of the State of New Jersey turned around."

"There are going to have to be tough choices for a long time to come, and they're going to be difficult, but we're all adults who are elected to office to make tough choices," Malone said. "Realizing there isn't an inexhaustible amount of cash, we need to be very conscious of the public and their ability to pay."

Democratic lawmakers, as promised, gave Republicans enough votes to pass the budget only if every Republican signed on. On Monday, two Republicans members of the Assembly said they took issue with the budget proposal, threatening the passage of the legislation.

Assemblyman Michael Patrick Carroll (R., Morris) said he and Assemblywoman Alison Littel McHose (R., Sussex) disagreed with Christie's distribution of state aid to schools. Christie cut approximately 5 percent of each school district's budget, which in some cases meant all of their state aid. Carroll said he and McHose felt the governor should have given a bigger proportion of state aid to suburban school districts.

Carroll said he ultimately decided to vote for the budget because he was persuaded that to not vote for it would mean giving more concessions to Democrats to win an extra vote.

Assembly Budget Chairman Lou Greenwald (D., Camden) predicted Christie's budget would lead to tax increases totaling more than $1 billion.

"Property taxes will skyrocket. Health care will be taxed and slashed. Education will be cut. Public safety will be slashed. Auto- and health-insurance costs will rise. Job-creating business incentives will be decimated," Greenwald said.

"This is a tax-laden Christie budget that hits working families and businesses hard. Its negative impact will reverberate throughout this state and make life unaffordable for millions of New Jersey residents."

For years, Republicans have accused Democrats of adopting budgets that papered over financial difficulties with one-time gimmicks and hidden tax increases and fees. This time, with a Republican in the governor's office and Republican lawmakers sponsoring the budget bill, it was the Democrats' turn to level similar accusations.

Democratic lawmakers were incredulous when Republicans said the state had found $5 million in overfunded payroll accounts that could be used to prevent business filing fees from being increased, for example.

And Senate Budget and Appropriations Chairman Paul Sarlo (D., Bergen) was skeptical of the administration's claims that improved tax audits and compliance measures would make up for revenue the state had expected to take in by allowing shopping in Bergen County on Sundays. The administration decided that blue laws will remain in place, costing the state an estimated $65 million.

Typically, legislators break for the summer after adopting a budget, but Christie has ordered them to continue working on his property-tax proposals.

Both houses of the Legislature have approved a counterproposal by Senate President Stephen Sweeney (D., Gloucester) to cap property-tax increases at 2.9 percent annually, with exceptions for things like health insurance, pensions, and cuts in state aid. Both Sweeney and Christie's proposals would allow towns to "bank" unspent money below the cap for future years as an incentive to spend below the cap.

To get a constitutional amendment on the ballot this November, Christie would have to persuade lawmakers to approve legislation in the next week. Both Sweeney and Assembly Majority Leader Joseph Cryan (D., Union) have said that will not happen.

Malone said Christie may consider conditionally vetoing Sweeney's bill, by eliminating many of the exceptions he would allow to the cap. The bill would then return to the Legislature for approval.

The governor has the authority to call for a special session of the Legislature but cannot force it to take action on any particular legislation.

Assembly Speaker Sheila Oliver (D., Essex) said that while the Assembly would listen to what the governor had to say, she hoped Christie would sign Sweeney's proposal into law.

"We will not hurriedly slap together a plan that fails to bring real relief to New Jersey and cripples our ability to educate children and provide for public safety," Oliver said. "We will do this right, without the showboating and sound bites others apparently prefer."