What little Gov. Chris Christie has said so far about his upcoming 2012 budget suggests he will attempt deeper cuts than last year.
“I ask you to join me in cutting the popular in order to fund the necessary,” he said during his State of the State address Jan. 11.
With that line, Christie indicated that government programs were on the table for budget cuts. He mentioned by name Medicaid, which provides health care assistance to low-income families, as a program that may be trimmed. And he reiterated that state aid to municipalities and school districts may not only be reduced, but restructured.
Lawmakers say they read Christie’s speech as a map toward the Republican governor’s next budget, which his office says will be delivered Feb. 22. Republicans expect to spend the next month laying the groundwork for more deep cuts, while some Democrats are already working to connect unpopular state policy decisions to the governor’s budget.
State Sen. Anthony Bucco, R-Morris, expressed what many Republicans are likely to tell their constituents this month.
“It’s going to be a very, very tough budget year,” he said Thursday. “We know the revenues are not where they need to be, and we know there’s a deficit already built into this year’s budget. That means tough decisions for the governor. It means finding solutions that are revenue-neutral.”
Beyond tackling a $10 billion state deficit and dealing with low state revenue streams still affected by the recession, Christie has set himself two challenges. He wants big new policies on issues that have proved divisive, namely education reforms that allow students to opt out of public school districts and changes or reductions in how much the state pays for public workers’ pensions and benefits.
Meanwhile, he promised to balance the state budget and, crucially, promised to work on cutting income- and business-tax rates.
But first, Christie must find ways to pay for his new ideas.
“That challenge appears to be insurmountable, and especially with the current deficit,” said Brigid Harrison, a political science professor at Montclair State University. “The ongoing deficit has plagued every governor and seems to define every budget.”
She said the changes in pension and education policy could be connected.
“The thought process there appears to be that changes to the way pensions and benefits are negotiated will free up money that can fund other things, such as the education agenda,” she said.
Christie has indicated he will not increase state aid to municipalities or local school districts. After cuts to education following the loss of federal stimulus funds totaled more than $800 million last year, and after more than $450 million was cut in municipal aid, representatives from those sectors had hoped to see the aid restored or at least held stable.
“There’s no certainty,” said Mayor Chuck Chiarello, of Buena Vista Township, who serves as president of the New Jersey State League of Municipalities.
Speaking after listening firsthand to the State of the State, Chiarello said municipal leaders who were preparing to write budgets abiding by a state-mandated 2 percent budget cap “don’t get much encouragement or support here.”
As a governor heading into his second budget season, Christie has had to change his tone.
“He spoke for the first time as if he owned the state,” Harrison said following the Jan. 11 address. “From speaking last year almost as an outsider, ‘turning Trenton upside down,’ he has had to translate that into recognition that this year, it’s his baby, his deficit.”
But the governor’s need to overcome obstacles in his second year — making cuts and unpopular decisions while taking responsibility for the state’s deficit — may be aided by timing.
The influence of the coming fall’s elections, in which voters will decide every state Senate and Assembly seat, means both parties will work toward a smooth budget-season compromise that avoids the closing of state government.
“A shutdown benefits no one,” Harrison said. “What you’ll hear before then are the opening salvos from each party, which lay out their opening positions and tend to be very ideological.”
Republicans and Democrats who gathered Thursday for a Senate Budget Committee meeting agreed that, between now and Christie’s budget address in February, the coming budget would overshadow every spending decision.
That day, lawmakers passed a bill to introduce a new scholarship program for selected students from failing school districts.
The program would fund those students’ enrollment in parochial or private schools, an idea in line with Christie’s belief in school choice as part of public education policy. The program, essentially a school vouchers initiative, would fund $1 billion in scholarships over five years.
Under the bill, known as the Opportunity Scholarship Act, companies that contribute to the scholarship fund would receive a tax credit.
Bill sponsor and Senate Minority Leader Thomas Kean Jr., R-Union, Morris, Somerset, Essex, saw the bill as the first part of the governor’s education reform package.
“It certainly is, even though it precedes his recent speech,” Kean said.
Bucco, who will sit on the Joint Budget Committee that will consider how to enact the governor’s budget, said the scholarship bill illustrated how budget priorities would be handled.
“There are going to be a lot of discussions like this as we head into next year,” he said. “The state has no more money, and we have to find ways to use what we do have to further the governor’s priorities.”
That did not satisfy Sen. Paul Sarlo, D-Bergen, Essex, Passaic, the Senate Budget Committee chairman, who also co-chairs the Joint Budget Committee.
Even though the scholarship proposal would technically have passed this year, Sarlo said: “I raised the question: How does this impact next year’s budget? What if the school funding formula were to change? I guess we’ll have to see how next year’s budget is presented before we know.”
Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said the bill would leave a burden on local school districts, even those whose students would not be eligible for the scholarships.
“If a district receives less money because a student has gone to private school, the effect may be minimal or it may not,” he said before voting against the proposal. In the case of a special-needs child who moves out of a public-school class of just six students, he argued that the district may decide it could not afford services for the remaining five. “Losing one child from that class may hurt those who are left,” he said. “The burden is left on the school district.”
That debate echoes clashes from last March, as mayors and school district superintendents argued that they were forced to make up for Christie’s cuts, while receiving far less municipal and school aid.
Nevertheless, Harrison said: “Those opening salvos, which sound very ideological and play to each party’s base, also bear little resemblance to what’s settled under the final budget agreement.”
Christie and legislators tussled over last year’s budget until June 21.
This year, Christie is starting his budget process earlier, scheduling his budget address in late February rather than mid-March.
Kean, for one, said the extra time would only increase chances of success.
“We’ll get it done,” he said. As for the content of the governor’s February address, he said only, “I’d watch it. It should be a good speech.”
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