Codey Keeps Options Open With $4 Billion Deficit

Acting Governor Codey is facing a $4 billion state budget deficit as he prepares for his first State of the State speech to the Legislature on Jan. 11, and his first budget message is tentatively scheduled Feb. 22. Codey has indicated that he's not ruling out anything to eliminate the deficit- including an increase in state taxes, or laying off state employees - when the next fiscal year begins on July 1.

As Codey pondered his moves, state Treasurer John E. McCormac reported Dec.17 that all state revenue collections for the first five months this year totaled $9.6 billion, 1.9 percent below projections. If the revenue picture remains discouraging, Codey could be forced into a number of drastic moves, unwelcome in an election year when both the governor's office and control of the Assembly are at stake. Democrats now control the Assembly, 47-33, but tax hikes, layoffs or aid reductions could prove so unpopular that the Republicans could win the eight seats they need to take back control.

Oddly enough, however, that gloomy forecast could have a silver lining for U.S. Sen. Jon Corzine, of Hoboken, the favorite for the Democratic gubernatorial nomination in next June's primary election. Corzine could bankroll his own campaign out of his well-lined pockets and therefore run as an "outsider," making him immune from any voter backlash against Democratic budget practices or tax increases. More here.

We suggest Acting Governor Codey cut spending to achieve a balanced budget. He might start with the wasteful spending we’ve highlighted in the past month or so in this blog. And he should continue cutting by eliminating all nonessential programs immediately.

Budget gimmicks, new or increased taxes are not acceptable. Further, an unsolved budget crisis is not a sliver lining for Jon Corzine. – a liberal U.S. Senator that has opposed federal income tax cuts that are most beneficial to New Jersey taxpayers. Corzine’s philosophy of bigger and “better” spending programs coupled with ever higher taxes is not a solution New Jersey voters will buy in 2005.