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Calling the state’s current fiscal condition a “full-fledged financial emergency,” Gov. Jon Corzine on Tuesday unveiled a plan to reduce New Jersey’s debt, limit state spending increases and eliminate the use of one-time revenues for state spending programs.
The plan, announced during the governor's State of the State address, contains four elements:
- Freeze state spending. Under Corzine’s plan, the state’s 2008-2009 budget could be no higher than the current-year amount.
- Limit future state budget increases so they do not exceed recurring revenue.
- Pay down half of the state’s current $32 billion debt. According to Corzine, doing so would reduce annual debt payments by $1 billion, which could be applied to the state’s operating budget. To accomplish this, the Corzine plan would form a “non-profit public benefit corporation” to manage the state’s three toll roads, raise revenues through concession fees and borrow funds against future tolls, which would increase incrementally from 2010 through 2022. In addition to debt reduction, funds secured through the corporation would go toward transportation improvements.
- Require voter approval of any future borrowing that would not be backed by recurring revenues.
Gov. Corzine plans to promote public discussion of the plan through town meetings in all 21 counties, the first of which will take place in Livingston on Saturday. NJSBA will monitor the plan’s progress, with the goal of assessing its impact on the state’s ability to provide financial support for public education. |
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