State legislators from South Jersey said Gov. Chris Christie’s budget address outlined a proposed spending plan with few new initiatives and surprises for the region.
They all said that they are still waiting for a more detailed review of the proposed $34.4 billion budget to determine the spending plan’s actual impact on the state’s southern counties.
“I don’t know of anything surprising,” said Assemblyman Sam Fiocchi, R-Cape May, Cumberland, Atlantic.
However, state Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic, said the governor’s address and proposed budget hint at what some people may consider another assault on New Jersey’s already gutted Urban Enterprise Zone program.
Municipalities participating in the UEZ program kept state sales tax revenue and used the money for economic development purposes. A drastic overhaul of the UEZ program by the Christie Administration several years ago ended the practice of the state returning the sales tax revenue to the municipalities.
Van Drew pointed to a line in Christie’s budget address in which the governor mentioned “closing corporate loopholes to promote tax fairness.” That, and some line-item information in Christie’s proposed budget, could mean the administration wants to end some existing UEZ measures, he said. That includes one that excuses some UEZ companies from paying sales tax for certain purchases, he said.
“It’s very preliminary,” Van Drew said. “I think they are going to talk about. We’ve got to look and make very sure that we are not hurting small- and medium-sized businesses.”
There are UEZ programs in Bridgeton, Millville and Vineland in Cumberland County, the Wildwoods in Cape May County, and Pleasantville in Atlantic County.
A budget summary released by the state Department of Treasury also shows spending for the Casino Reinvestment Development Authority decreasing from more than $452,000 to almost $133,000. The summary notes that CRDA revenues reflect the assumption of the Atlantic City Convention and Visitors Authority’s assets and liabilities last year.
CRDA absorbed ACCVA in April in a move mandated by 2011 state legislation. The consolidation was mandated by the same legislation that created the Atlantic City Tourism District. Aspects of that legislation diminished the role ACCVA plays in marketing Atlantic City.
While Christie’s proposed budget makes a required $2.25 billion payment to the public worker pension fund without raising taxes, Christie said the state's staggering retiree and debt costs are sapping spending increases for other programs and services.
The governor's fifth budget proposal is in some ways his most constraining. With an annual pension obligation that grew by roughly $600 million over this year, debt payments of nearly $3 billion and steeply rising health benefit costs, Christie has virtually no wiggle room to fund major new initiatives. Taken together, retiree and debt costs will eat up 94 percent of the state's projected revenue growth.
"While this budget continues the fiscal discipline and pro-growth policies that we brought to Trenton four years ago, the budget doesn't do everything we all might have wanted," Christie said. "Not even close."
The spending plan for the fiscal year that starts July 1 offers slight increases in K-12 and municipal aid, and increases higher education funding by $159 million, or about 8 percent. The budget also includes $5 million to allow some districts implement longer school hours. Property tax rebates would be maintained at current levels for those who are elderly, disabled or earn less than $75,000 a year.
But the budget does not include plans for a tax cut, a Christie proposal of two years ago that was thwarted by Democrats. And, it all but abandons earlier administration efforts to privatize certain services.
Support for Christie’s proposed spending plan from South Jersey state legislators fell along party lines.
State Sen. James Whelan, D-Atlantic, who said he knows of no new initiatives created in the budget for Atlantic City, voiced concern about Christie’s fiscal projections. That includes an estimated 8 percent increase in tax revenue, he said.
“The one piece of information that I’ve gotten from a few people is that he is being overly optimistic on the revenue projections,” Whelan said. “I don’t know where those projections are coming from. I don’t know where you’re going to see an uptick of that magnitude.”
Still, Whelan said Christie’s proposed “stay-the-course budget” is the “prudent thing to do” given the weak economy.
Republicans gave expected support for the budget.
“It’s a good story that never gets old,” said Assemblyman Chris Brown, R-Atlantic. “Five year. Five balanced budgets. Five years without asking middle-class families to dig deeper into their pockets to pay for wasteful spending. Five years of focusing on the right priorities.”
Brown said while he is happy with the budget, more work needs to be done to ease property-tax burdens.
“I am committed to working in a bi-partisan manner to make sensible reforms that can lead to lower property taxes,” he said.
Fiocchi said the budget properly calls for no tax increases, makes the pension payment, and increases aid to schools.
“Overall, I think it’s a good budget,” he said.
All the legislators agreed with Christie’s call to increase shared services and consolidations among the more than 500 units of local and county governments. Christie is proposing to spend $8.5 million to reimburse those governments who engage in those practices.
“You need to do it where it makes sense,” Fiocchi said. “I think the governor’s approach makes sense. It’s more of the carrot approach. I think a lot of legislators use the stick approach.”
Whelan said there is “tremendous amount of room to grow” consolidation and shared services.
“The difficulty is, I have had local elected officials and local citizens say they will pay the premium to maintain X, whatever X is,” Whelan said. “Just purely from a dollars and cents perspective, there is tremendous savings that would be achieved. Getting the local communities to give up home rule, that is the challenge.”
The Associated Press contributed to this story.
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