Senate Presidents, Members of the state legislature, Cabinet
officials,
My fellow New Jerseyans...
Today, I am submitting a budget for your consideration that is
intended to pull us out of crisis and put our state on the right
track.
It is an important document, representing many months of work --
a blueprint to move New Jersey forward.
The budget-making process has not been easy this year, and we
have faced difficult choices and unforeseen obstacles.
But I believe we have accomplished our goals:
First and foremost, we have balanced the budget -- not only
because our state constitution requires it, but because it is
the right thing to do ...
Like any family, New Jersey must live within its means.
Second, we have identified those programs that must be
priorities, even in tough times.
And third, despite the enormous pressure of a massive,
multi-billion dollar shortfall, we have not balanced this budget
on the backs of the working people of this state.
In fact, we're doing quite the opposite.
We are reaffirming our commitment to property tax relief.
And we're making our tax structure more fair and equitable by
ensuring that corporations pay their fair share of taxes just
the way every family in New Jersey must.
Ladies and gentlemen, I believe this budget is an enormous
achievement.
Just consider what we're doing here today.
We face a staggering shortfall -- the biggest of any state in
the nation, and perhaps the biggest in history -- and yet we
have constructed a realistic, responsible spending plan for New
Jersey.
We're doing it without raising sales taxes or income taxes.
We're doing it without reducing our aid to local governments and
school districts.
And we are doing it by keeping faith with our most basic
priorities and the fundamental values that brought us here in
the first place.
A few weeks ago, I came before this Legislature and asked you to
make the tough choices to close a $3 billion dollar shortfall
and put this year's budget back into balance.
It was a difficult task, but together, we got it done.
Today, I am asking you to work with me again;
I want to work in partnership with Senators Codey and Bennett,
Speaker Sires and Minority Leader DeGaetano and with each and
every one of you.
We must get this job done and we must do it together.
Creating a budget for the state of New Jersey is an awesome
task, because the decisions we make in a $23 billion dollar
budget affect people's lives every day.
Building schools ...
Educating our children ...
Strengthening the state police ...
Paving roads ...
Preserving open space ...
Providing state aid to municipalities and school districts.
Yet even with all we have to do, our resources have been
shrinking.
Tax revenues have declined dramatically in the past 12 months
and have quickly been outpaced by spending.
We were forced to close a $3 billion dollar shortfall to bring
the last budget back into balance -- and now we're closing what
the very latest revenue projections suggest is an additional
$5.3 billion dollar gap.
This is not the budget I wanted to submit. It does not ... and
unfortunately, cannot ... reflect all of my priorities.
But as Governor, it is my job to hold the line ...
It is my job to say to the citizens, 'this is what we can do
with the resources we have'.
I cannot tell you that this budget meets every need or solves
every problem.
But I believe it will put us on the right path, because I
believe it was driven by the right priorities.
Because even in hard times, a budget has to be a blueprint for
the future and it has to reflect our values.
I've traveled all over New Jersey in recent months, and I've
talked to thousands of people in hundreds of communities and
every single county.
As we worked on this budget, I found myself remembering their
stories.
The grandfather I met in Gloucester County who is spending all
his money to keep his ailing wife at home instead of putting her
in a nursing home -- but who worries about how he will pay his
property taxes and prescription drug costs when the money is
gone ...
The police officer I spoke to in South Amboy who worked two jobs
-- long hours -- to support his family, but who still holds onto
the dream that led him to the force in the first place -- that
he can help make people safer and more secure…
A single mom with breast cancer in Cherry Hill who told me how
difficult it was to find the information she needed about her
disease, and who wanted to know what the state could do to help…
A third grader from Livingston, an articulate child who was so
full of hope and so curious and anxious to learn…
These stories came back to me as we worked, and reminded me,
each and every day, of the importance of what we do and why we
need to get it right...
These stories guided me in the difficult choices I had to make.
For fundamentally, as a matter of conscience and duty, we
assemble here to do the people's business.
So before I tell you the details of the budget, let me tell you
the principles that underlie it.
I believe we must balance our budget responsibly, but never on
the backs of the hard working people of our state.
I believe we must tighten our belts, but not harden our hearts.
I believe we must make government work smarter and better.
I believe we must ensure that our people are safe in their homes
and on our streets.
I believe we must build the best educational system in the
nation -- because when our schools work, we are ensuring the
success of our children and ultimately, our state.
In constructing this budget, we stayed focused on where we want
to end up, not when the next fiscal year rolls around, but in
the years ahead.
A vision of better schools, safer streets, more open space, and
the strongest, most capable workforce in the nation.
As President Abraham Lincoln told Congress in 1861:
"The struggle of today is not altogether for today -- it is for
a vast future also."
So, keeping that "vast future" in mind, here are some of the
details of the budget I am submitting today.
First, this budget will ensure that we live within our means.
We're doing it by cutting back in a rational, cost-effective,
and responsible way.
By making government smaller, leaner and more efficient.
By rooting out waste and mismanagement, by consolidating
programs and services, and by re-examining basic assumptions
about how we tax and spend.
Let me give you an example.
I am signing an executive order today to begin the process of
merging the New Jersey Turnpike Authority, the South Jersey
Transportation Authority, and the Highway Authority which runs
the Garden State Parkway.
It is time to do away with these redundant authorities which
behave like shadow governments -- fiefdoms with little
accountability and extraordinary power.
We will merge them to end wasteful duplication and save money.
Here's another thing we're going to do to change government and
cut costs:
We're reducing the operating subsidy of the Sports and
Exposition Authority by more than half, as a first step towards
getting our state government out of the sports business.
When the Sports Authority was created, it was created for the
right reasons -- to help bring professional sports to New Jersey
at a time when the private sector would not help.
But today, the Sports Authority and the Meadowlands cost us
money.
The system is not working for the teams and it's certainly not
working for the taxpayers.
In the coming months, we will put forward a long-term plan that
keeps all our teams in New Jersey, eliminates the burden on the
taxpayer, and finds the best possible use for the Meadowlands
site.
I am promising you today that the Meadowlands will be developed
sensibly and rationally ...
that it will become an economic engine for the region, and that
the polluted sites in the area will be cleaned up.
Another thing we are going to do is to restructure -- and shrink
-- the bureaucracy of the state Department of Education, by
decentralizing many of its functions and eliminating unnecessary
administrative jobs.
We're going to require that the Department of Education move
away from paper-pushing and return to its central mission:
To be a leader in education innovation and to prepare our
children for the future.
And we're going to merge the state's Housing and Mortgage
Finance Agency with the New Jersey Redevelopment Authority
because housing and economic development go hand in hand.
This move will create new efficiencies and enable us to get the
job done smarter and better.
As part of living within our means, the budget I am proposing
also reflects our determination to root out waste and
mismanagement.
First, we've already found dollars that had gone unspent because
programs were overfunded or never implemented -- and we're
reclaiming those dollars.
Second, I've already required a five percent across-the-board
cut from all our state agencies.
Third, there will more reductions in the size of the state
workforce.
We have already eliminated 600 positions as part of the
necessary process of shrinking government, and there will be
1,000 more reductions achieved through early retirement,
attrition and, if necessary, layoffs.
I've said many times that we have to do more with less in order
to meet our obligations.
We will make government smarter and stronger even as we make it
leaner.
But even as we are making the tough decisions necessary to live
within our means, we also recognize that there are certain
priorities that we simply cannot abandon.
That's why we have added new initiatives to the budget --
carefully, judiciously, surgically in those areas where it is
needed.
One of those areas is education.
I believe that we have no greater obligation to the next
generation than preparing our children for the future.
This year we will add $10 million dollars for a new literacy
initiative -- the first piece of a four-year, $40 million
program that includes putting reading coaches in schools that
need them.
It's time to ensure that our third graders can read at or above
grade level, because we know there's nothing more important to
guarantee a child's success than literacy.
As part of our commitment to having the best-prepared work force
in the nation, we are following through on our promise to
establish "career academy" partnerships with business.
This is a bold step, creating a new partnership with the private
sector as part of our effort to change the way we think about
education.
We recently received our first commitment -- $500,000 from
Pfizer Corporation -- to create a career-themed academic program
beginning this September.
This academy will incorporate technical training, work-based
experience, and mentorships for students at a New Jersey high
school.
My deepest gratitude goes to Pfizer Chairman Hank McKinnell for
answering our call.
This budget also authorizes $10 million to restore the Office of
the Public Advocate, which had been dismantled under the
previous administration.
The public advocate will be the people's watchdog and fight on
behalf of the average citizen on issues such as insurance and
utility rates.
We will have special advocates to fight on behalf of children
and to protect the rights of seniors.
We are also investing in security.
In the wake of September 11th, there are certain steps we must
take to protect against future attacks.
We need to treat security as a shared responsibility between
federal, state, local, and county officials.
We are allocating $66 million dollars in state spending for
homeland security.
This includes funding for the newly created Office of Counter
Terrorism, under the Attorney General, which will be responsible
for a comprehensive strategy to prevent and mitigate terrorist
attacks in New Jersey, and coordinate with federal and local law
enforcement agencies.
This also includes $25 million dollars to strengthen our public
health system to expand our labs, and to better equip hospitals
and emergency medical teams to protect the public against new --
and old -- threats.
This will supplement $27 million dollars in federal funds
promised to our state to combat bioterrorism.
And we are dedicating $100 million dollars over the next four
years to create a state-of-the-art administration and training
facility for state police.
Another vital issue is cancer research.
I want to recognize Linda Gillick, who I know is here today, to
thank her for her tireless work on children's cancer clusters in
Toms River and around the state.
In this budget, we provide $28 million dollars for the Cancer
Institute of New Jersey, which will help make the institute one
of the premiere cancer research facilities in the nation.
A new grant of $500,000 dollars will go to the Cancer Cluster
Task Force, to investigate cancer clusters such as the one in
Toms River.
And we are dedicating $30 million dollars for a broad range of
anti-tobacco initiatives, to help New Jerseyans quit smoking and
to prevent them from starting.
We faced a lot of choices as we put this budget together -- a
lot of very difficult choices.
At every step along the way, we went back to our most
fundamental principle: We put taxpayers first.
Faced with an enormous $5.3 billion dollar deficit, the old way
would have been to raise the sales tax and the income tax.
That would have been wrong.
Or we could have cut the billions of dollars in aid we provide
to local school districts and municipalities, thereby forcing
them to drive up property taxes on already overburdened
homeowners.
That, too, would have been wrong.
Those are the traditional solutions we've seen state government
rely on so many times in the past.
But we did not do those things.
Instead, we painstakingly reduced the size of government.
We shrank agencies ... we cut programs.
Let's be clear.
We are maintaining our commitment to the hard working middle
class families of our state.
I will not raise our income taxes.
I will not raise our sales taxes.
And I will not reduce the property tax rebate programs that
provide direct relief to middle class taxpayers.
Here is what we are doing.
First, we are maintaining state aid to schools and local
governments at last year's levels.
This is the single biggest portion of the state budget -- nearly
$10 billion dollars, or nearly 50 percent of what we spend.
By refusing to cut this aid even by one cent --
and by maintaining our support for the $12 billion dollar school
construction bond program --
we are affirming our commitment to improve our schools and
communities AND to provide property tax relief to residents of
the state.
As a former mayor, I refuse to accept the premise that school
districts and municipalities can't make the same hard choices we
have.
Just as the state is required to do more with less, so must
local governments and school districts.
Despite the size of the state deficit, we also protected New
Jersey SAVER rebate programs as a direct offset to rising
property taxes.
Rebate checks will remain at last year's levels -- an average of
$500 dollars in direct property tax relief for each taxpaying
family in the state.
The increase will be deferred because we simply do not have the
money.
And I refuse to spend money that we do not have.
As I promised, we are also going to put an income cap on the
SAVER rebate to target it to the people who need them most.
From now on, families earning more than $200,000 dollars per
year will not be eligible for the SAVER.
As we promised, that savings -- about $48 million dollars --
will be put towards paying down the state's debt, which has
grown too much, too fast in recent years.
We will follow through with the promised increases in the
Homestead rebate program for seniors, because seniors are among
the hardest hit by New Jersey's exorbitant property taxes.
Homestead rebate checks for seniors will increase this year to
as much as $775 dollars.
The senior property tax freeze, under which seniors receive a
rebate for the portion of their property tax bill that exceeds
what they paid in the previous year, will be expanded in this
budget.
As promised, the income eligibility level will be doubled, so
that more than twice as many seniors -- tens of thousands of
people -- will be eligible to receive the benefits of this
program for the first time.
For a married couple, the income eligibility level rises from
$22,000 dollars per year to $44,000 dollars.
We're also making changes to the Corporate Business Tax which is
neither fair nor equitable.
It's broken. And we're going to fix it.
The changes I am proposing today are designed to ensure
corporations pay their fair share, just as every New Jersey
family must do.
The Corporate Business Tax once accounted for 15 percent of all
state revenues collected.
But today, it's less than 5 percent -- which means that the rest
of us are paying the bill.
If we don't fix this tax now, the amount we collect from
corporations now will only be as much as we collected from them
20 years ago.
Why are corporate tax revenues so low today?
Because some companies are using loopholes and accounting
gimmicks to make their profits look smaller.
They're shifting money from their New Jersey books into
out-of-state companies ...
or they're changing the structure of their companies on paper
from one legal designation to another ...
all to avoid paying our taxes.
Consider this:
Of the 50 companies with the largest payrolls in New Jersey, 30
of them paid only the minimum corporate tax: $200 dollars per
year.
Two hundred dollars per year…
That's less tax than would be paid in income taxes by a single
parent with a child, earning $25,000 dollars a year.
And that's not acceptable.
You don't need to be an accountant to know those loopholes are
not fair and must be changed.
We're going to make sure that all companies are paying their
fair share.
We're going to restore the integrity of the corporate income tax
by eliminating the loopholes and gimmicks that have allowed
companies to shirk their responsibilities.
Last year's budget anticipated $1.8 billion dollars in revenues
from the corporate business tax -- and we didn't get there.
This year, we're going to restructure the tax to provide for
greater equity and fairness to achieve the $1.8 billion dollars
in revenues that the Legislature intended a year ago.
We're going to do this fairly, so that companies that have
already been paying their fair share are not affected.
And we're going to take steps to protect small businesses, so
that they are not adversely affected by the changes.
This budget also proposes securitizing a portion of the state's
expected future payments under the national tobacco settlement.
This will raise slightly more than $1 billion dollars.
This step -- which several other states have taken as well --
reduces the risk to the state in the event that the tobacco
companies fail to meet financial projections under the tobacco
settlement.
Finally, like many other states in the region, we're proposing a
50-cent hike in the cigarette tax.
This is sound fiscal policy and good public health policy.
Studies have clearly shown that increasing the cost of a pack of
cigarettes is one of the most successful ways of reducing
smoking.
That change will raise about $200 million dollars.
________
As I have said, this budget will not solve every problem.
The record economic growth of the 90s is over and we simply
cannot spend money we don't have.
Ladies and gentlemen, members of the Legislature, cabinet
officials, I am proud of the budget that I submit to you today.
I believe it is a road map that will lead us to a stronger New
Jersey.
But as we work together and continue to face difficult choices,
we must hold fast to our principles.
Now, I ask for your work.
I am asking you to join with me in partnership to enact this
budget for the benefit of the citizens we were elected to serve.
I ask you to join with me putting the interests of our hard
working people and families first.
I ask you to join me in refusing to balance this budget on the
backs of already overburdened taxpayers.
As we begin the process of enacting this budget, I want your
suggestions and your advice.
If there are parts of my budget that you cannot support, please
come up with something of equal value to replace them.
But do not idly criticize without an alternative. I mean to hold
us all accountable and responsible for our actions.
I am ready to listen.
I said several weeks ago that we must be tough and we must be
fair.
I believe that we must work together in the weeks ahead.
If we uphold the principles I have outlined today, we will
indeed have a balanced budget which represents the right
priorities for New Jersey's families.
And most importantly, we will lead New Jersey to build
prosperity and opportunity for all the citizens of our state.
Thank you. Now let's get to work.
It's
