Corzine delivers State of the State

January 13, 2009 4:52:46 PM PST
Attempting to balance the state's grim financial reality against the need to jump-start the economy and fund important programs, Gov. Jon S. Corzine proposed fiscal prudence and selective new initiatives in a State of the State message Tuesday. Corzine called for a yearlong waiver of developers' fees for affordable housing, asked for a November ballot referendum to replenish open space funds and urged the lawmakers to allow towns to defer millions in pension fund payments. He said financial conditions affecting the state are driving many of the proposals, including the pension deferral.

During his annual address Tuesday to a joint session of the Assembly and Senate, the Democratic governor also braced the Democratic-controlled Legislature for a new round of painful budget cuts on top of $1.4 billion already cut this fiscal year.

Corzine's speech was heavy on hope but short on new initiatives, as the governor tries to lead the state out of the worst economic recession in decades while running for re-election.

"Despite the economic tsunami that's engulfing the nation, I believe that the character and fundamentals of our state are equal to any task we face," said Corzine.

He called for a one-year moratorium on real estate developers' 2.5 percent fee to pay for affordable housing projects. Under a law passed last year, developers pay 2.5 percent of the value of commercial properties they put up into a fund to pay for affordable housing in the suburbs.

He also suggested voters approve a question on November's ballot to pay to preserve open space, funding that has not been renewed since funds appropriated in an emergency 2007 ballot question were used up.

And he renewed a pitch to the Legislature to allow towns to defer half their payment to the government worker pension fund, which would save them $534 million this year. The measure failed to win enough votes to pass in the Senate in December. Corzine said Tuesday towns may be forced to raise taxes to unacceptably high levels unless they're allowed to skip the payments until the economy improves.

Corzine, who is running for re-election, said he can advance his agenda despite limited resources. He has instructed towns not to raise their taxes by more than 4 percent, for example, and wants to see recommendations on how towns can consolidate or share services by March 31.

Many towns were able to skirt the cap last year by getting permission from the state's Local Finance Board to increase taxes beyond the limit.

While Corzine promoted an agenda for economic recovery, he acknowledged the serious financial constraints hamstringing the state.

"We are planting the seeds for future prosperity," the governor said. "We are positioning as many people and businesses as possible to survive the national recession, and then thrive once the inevitable recovery begins."

Republicans have criticized Corzine's leadership on economic issues, saying the former Goldman Sachs chairman did not react quickly enough when the financial markets started to unravel.

"It's true New Jersey is in a difficult economic situation, but we didn't get here overnight," said Sen. Tom Kean Jr., the Republican leader in the Senate. "The policies of Gov. Corzine over the last several years helped get us to this point."

Corzine highlighted the economic assistance and recovery measures he proposed in October, many of which have become law. He said those actions have put New Jersey at the forefront in dealing with the historic financial crisis.

Corzine also pointed to New Jersey's mortgage foreclosure prevention program, which he said is recognized as a national model for other states.

He also noted having increased spending for education by $500 million despite the overall budget cuts, and renewed his commitment to funding a new mass-transit tunnel between under the Hudson River.