New Jersey is facing a $3.5 billion deficit. That’s in the current fiscal year’s budget.
The recession, combined with years of questionable budgetary practices, has left the state with empty coffers and questions about how to continue providing services now and into the future.
To put the number into perspective, $3.5 billion represents about 12 percent of the current year budget — or one out of every eight dollars anticipated before the year began.
In response, state officials are planning two unpaid furlough days for state employees, one each in May and June, saving $35 million. State Treasurer David Rousseau said the furloughs can be done without the consent of public worker unions, which have already objected to a proposed salary freeze.
In all, Corzine announced there will be an additional $472 million in budget cuts, $550 million in additional funds from the federal stimulus bill and $335 million in extra funds from state surpluses and trust funds.
The state also plans a tax amnesty program, which will need legislative approval, that would bring the state an additional $100 million.
This year’s deficit now exceeds 10 percent of the original budget adopted last summer. It includes a $2.8 billion shortfall in revenue, a $600 million increase in spending — including a $270 million deposit into the depleted unemployment fund, to avoid an automatic tax hike on businesses — and $135 million extra to repay debt.
“That comes with difficult choices and real pain in a lot of places,” Corzine said.
And things are not likely to get better by the time the governor unveils his fiscal year 2010 budget,
Revenue in the current budget is forecast at $29.5 billion. Collections for the upcoming fiscal year, beginning in July, are now $28.5 billion, meaning another group of budget cuts can be expected in Corzine’s March 10 budget speech.
This is why, when revenue is pouring in during good times, you have to sock some away. To do what the state has done — under administrations of both political parties — is to court disaster when things turn bad.
