How bad is New Jersey’s budget picture next year?

“Unprecedented,” says Ed McBride, Governor Jon Corzine’s chief of staff.

“Absolutely brutal,” according to Bill Castner, the Governor’s chief counsel.

“It’s not a pretty picture,” added Michellene Davis, Corzine’s chief policy counsel.

The three top advisors to Corzine gave their grim assessment of the budget to 150 NJBIA members on February 27 at the first of NJBIA’s Meet the Decision Makers events. The three key staff members spoke and fielded questions from the audience for more than an hour, most of which centered around balancing a budget in the face of an estimated 10 percent reduction in revenues.

“We’ve never seen anything like this where every revenue category is down significantly,” McBride said.

The administration predicts revenues will be $28.5 billion for fiscal year 2010, which begins July 1. That’s essentially the same revenue estimate for Governor Richard Codey’s last budget four years ago. By comparison, the current year budget is $32.9 billion, although Corzine and the Legislature are planning to cut that amount before the fiscal year ends on June 30.

Castner said Corzine had a solid record of fiscal restraint and that spending cuts, not tax increases, would receive the most attention, even though all budget options are on the table.

“(Corzine) views tax increases as a last resort,” Castner said. “We’re looking at cost cutting, so if you have any ideas, we’re all ears.”

The administration is counting on funding from the federal stimulus bill signed into law February 17 to fill in some of the gap.

From a budget standpoint, McBride said the two most important components of the federal stimulus bill are increased Medi-
caid funding, which allows the State to reduce its Medicaid appropriation, and the stabilization aid designed to support the budget.

“It’s an enormous benefit,” McBride said. “As the governor said, I don’t know what we would have done” without it.

Meanwhile, Davis said her section would continue to look for ways to stimulate growth in New Jersey’s private sector because the Governor’s priority continues to be the economy.

“We will continue to push that priority…to ensure proliferation, not just survival, of our business community,” Davis said.

On other issues, McBride said Corzine strongly supported a Licensed Site Professional (LSP) program that would allow specially licensed private-sector environmental professionals to oversee the cleanup of contaminated sites. By supplementing the work of the NJ Department of Environmental Protection, he said, an LSP program could break the logjam of cleanups.

“It’s a way of having government function more effectively and efficiently,” McBride said.