Not a Corzine fan, but this is interestingSubmitted by JohnGalt300 on Thu, 04/24/2008 - 01:14
Corzine is the former CEO of Goldman-Sachs, and something of a legend here in New Jersey. Well, hi son is, anyway. My the stories I could tell.
It was an incongruous scene — conservative TV talk show host Glenn Beck practically gushing over his guest, liberal New Jersey Gov. Jon Corzine.
The reason for Beck's praise on a recent show: Democrat Corzine's proposal to cut state spending in the 12 months beginning July 1 by $500 million below the current fiscal year's budget of $33.5 billion.
Actual spending cuts from year to year are extremely rare for state governments. Most states tackle economic troubles by reducing the rate of growth in spending or borrowing through bond issues.
Corzine's financial blueprint for the state that has the nation's highest property taxes starkly symbolizes turbulent times buffeting state and local governments.
The trouble comes amid a national economic slump, soaring prices for fuel and other commodities and strong public opposition to tax increases.
At least 27 states foresee budget shortfalls for the 2009 fiscal year, which starts July 1 in most states, according to a survey by the liberal Center on Budget and Policy Priorities. California, which has a projected $16 billion shortfall or budget gap, is in the worst shape.
No governor has gone as far as Corzine, a former investment banker, to stop the bleeding. His budget plan has drawn acute criticism from advocates of programs and services he proposes cutting.
"You have received so much heat, I really do admire you … for taking the tough road here," Beck told Corzine in the recent TV interview.
Beck even asked what advice the governor had for the nation as the federal government deals with deficits and projected future shortfalls in programs such as Medicare and Social Security.
Big job cuts on the table
New Jersey's Legislature must pass a balanced budget for the next fiscal year by July 1. If Corzine's proposal is approved, it would be only the fourth time in nearly 60 years that the state has implemented a year-over-year spending cut.
"It's fairly uncommon to have actual year-over-year decreases," says Scott Pattison, executive director of the National Association of State Budget Officers in Washington, D.C. "If we have a prolonged recession next year it might be a little more common."
In New Jersey, Corzine has proposed a budget of just under $33 billion for the next fiscal year. To achieve that, he has recommended slashing roughly 3,000 jobs, eliminating the departments of agriculture and personnel and making cuts in all 16 state departments.
For Corzine, who made millions on Wall Street, the pared-down budget seems more resonant of his background as the onetime head of investment firm Goldman Sachs than the politician who favors universal health care and government programs to help the needy.
"The Wall Street role led me to understand that the state had grossly overborrowed and mismanaged its finances for a significant period of time and we had to change that track," Corzine says. "You don't spend what you don't take in."
He was reminded of the need to rein in the state's finances when he heard from constituents during town hall meetings earlier this year.
"As a Democrat it made me worry that we might be losing the general consensus to support the role of government in a lot of things that I believe we should be working to provide … taking care of the uninsured, educating our kids," he says.
Some state lawmakers say that they may argue about the details of Corzine's current proposal, but they agree that spending cuts are necessary.
"I may not agree with all that he's cut within that budget, but under no circumstances should we go higher than the budget he's proposed," says Assemblyman Joseph Malone, the ranking Republican on the Assembly's budget committee.
"It isn't a Democratic budget is it? … But I think it reflects the reality of our times," says Sen. Barbara Buono, a Democrat who heads the Senate Budget and Appropriations Committee.
Small towns face pressure
One of Corzine's most contentious proposals would dramatically cut state aid to towns with fewer than 10,000 people — pressure to urge them to merge or share services.
This month, hundreds of farmers paraded with tractors to the Statehouse in Trenton to protest the proposed elimination of the department that oversees agriculture.
"Losing the Cabinet level position and the voice. .. in state government is extremely demoralizing to the farming community," says Ed Wengryn, field representative for the New Jersey Farm Bureau. "There are places in government where waste does happen. This is not one of them."
Iris Lav, deputy director of the Center on Budget and Policy Priorities, says that deep spending reductions may ultimately not be good for New Jersey.
"It has the potential of pushing the state's economy even further down into recession," she says. "We argue that the better way to go is to solve a good chunk of the problem with tax increases." Corzine's plan does not raise taxes.
Others praised the governor.
"The fact that he's taking a targeted approach and looking at areas of state government that could use trimming and not simply doing an across-the-board cut is something that we highly recommend," says Neal Johnson, director of the Pew Government Performance Project, which in a March report gave New Jersey a C- for how it has handled its finances.
Corzine faces re-election in November 2009, and it remains to be seen how his spending proposals will be viewed by voters, political analysts say.
"He campaigned on a very progressive or liberal agenda aimed at expanding the scope of government … and taking care of the less fortunate in society, so this is a real blow to the agenda that he laid out during the campaign," says Joseph Marbach, who teaches New Jersey government at Seton Hall University. "He's correcting the problems that have been 20 years in the making. … It is a risky strategy, but to the governor's credit it's one that's long overdue."