The budget must be approved by the Democrat-controlled Legislature and signed by the Republican governor by July 1, the start of the new fiscal year. This is Christie's first budget.
Under Christie's budget, no one will get a property tax rebate check this year to combat New Jersey's highest property taxes in the nation, which average $7,300 a household. When rebates return in the spring of 2011, senior citizens, the disabled and low-income wage earners could get a tax credit rather than a rebate check, and could get less than they received last year.
The budget proposes an $819 million cut in aid to school districts and a $445 million cut in aid to towns. Christie is expected to call for a 2.5 percent spending cap for schools and towns, but that constitutional amendment would have to be approved by voters and wouldn't likely take effect until 2012. If approved, spending above the cap would require voter approval.
Christie's budget spares the state's 65,000 union workers from layoffs and includes the 3.5 percent pay raise they are due July 1.
Under a contract former Gov. Jon Corzine renegotiated with the unions in late 2008, state workers agreed to defer a 3.5 percent pay raise due last July 1 and take 10 furlough days in exchange for a no-layoff pledge through 2010. In addition to the scheduled raise in July, the workers are due a deferred raise on Jan. 1.
During the gubernatorial campaign, Christie vowed to undo that deal. Last week, he said Corzine handcuffed him and acknowledged he was bound to honor the renegotiated contract. However, on Friday he left open the possibility of handing out pink slips to some of the 9,700 workers and 5,000 part-timers and temps who do not have union protection. Not all the positions are layoff-eligible and others are federally funded.
Christie's budget would again skip the state's annual contribution the pension system for public workers. The state pension fund is underfunded by $46 billion and at risk of eventually becoming insolvent unless fixes are made. Corzine skipped a $2.5 billion pension payment this year and allowed municipalities to defer half of their scheduled contribution.
The proposal assumes $50 million from the privatization of unspecified services. Christie last week assigned a task force to study privatization and gave them three months to report back.
Higher education also takes a hit under Christie's proposal. Aid would diminish about $170 million, including the disappearance of state support for independent colleges and trims to programs such as Tuition Aid Grants and the Educational Opportunity Fund for economically and educationally disadvantaged students. County colleges would lose $19 million under Christie's proposal.