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>New Jersey fiscal crisis : a shortfall of about $8 billion

Christie’s budget group says NJ finances worse than believed; making requests of Corzine

Associated Press

11/17/09 10:05 AM EST TRENTON, N.J. — New Jersey’s governor-elect said Monday he’ll be taking office of a state with an even worse financial crisis than previously believed, and he wants the current governor to tighten the state’s purse strings in the meantime.

The budget and finance task force leaders on Chris Christie’s transition team met for three hours Monday with the top budget officials in the current administration of Gov. Jon Corzine to learn details of the state’s budget situation.

The state Office of Legislative Services has estimated that if department budgets continue to grow at their current rate, there could be a shortfall of about $8 billion in the state budget that takes effect July 1.

Task force co-chairman Robert Grady, a former aide to President George H.W. Bush and Gov. Tom Kean, said he now believes the gap will be larger than that — even accounting for a start of an economic recovery that results in rising sales and income tax revenue. Grady did not have an estimate of how much he thought the shortfall would grow.

“That’s a big number when you consider a budget of $28.5 billion,” Grady said.

Christie said he was ready to deal with the problem, nevertheless.

“People voted for me because they wanted spending to be less,” Christie said in a briefing at his transition office down the street from the State House. “They wanted government to be smaller.”

Almost immediately after the meeting, the budget group announced that Christie, a Republican, would send a letter to Corzine, the Democrat he defeated the Nov. 3 election, requesting he nix various spending increases until Christie takes office in January.

The governor should not approve hiring or paid appointments, they said.

Corzine’s office says he is keeping a close watch on the budget. Since the election, he’s asked government officials to find cuts of $400 million to help balance the current year’s budget.

“He will take all necessary actions to ensure that the budget he turns over to the governor-elect is balanced,” said Corzine spokesman Robert Corrales. “And he will review the details of the letter and take appropriate action with this fiscal principle in mind.”

Throughout the campaign, Christie said the state budget was in bad shape and that he would fix it for the future by cutting spending and taxes.

But he wouldn’t lay out many specific cuts or timelines, other than to say that most of the tax cuts he wants to make would not come next year.

On Monday, he said his budget task force would roll out recommendations for cuts in coming weeks.

Leaders of the task force also said they would meet with Moody’s Investors Service, which earlier this year lowered the state’s outlook — a step that could lead toward lowering the state’s bond rating, which would make it harder to borrow money.

Christie reiterated that he would not raise taxes to balance the budget.

“I absolutely believe that we can have New Jersey back to fiscal health by the end of our first term,” Christie said. “There’s going to need to be a lot of hard things that are going to need to be done to do that.”

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