TRENTON - Governor Jon S. Corzine June 30 signed an unprecedented, fiscally responsible $32.9 billion state budget for FY 2009 that prioritizes the core functions of government – education, public safety and protecting the most vulnerable among us – while also providing substantial property tax relief to homeowners.

“This budget takes us through a turning point and confirms our commitment to a common sense principle of finance, often ignored, that we should spend no more than we take in,” Governor Corzine said. “Make no mistake, the spending cuts are painful and bring no pleasure of applause. They didn’t in February and they don’t today. The cuts do, however, make clear that fiscal and tax stability for New Jersey’s citizens is possible.”

The budget represents a $2.9 billion reduction in spending; reduces the size of government by 3,000 workers through early retirement and attrition; cuts the operating budgets of every state department by an average of five percent and eliminates altogether the Depart-ment of Personnel and the Commerce Commission. This budget pays down the state debt by $650 million and uses $261 million in unexpected surplus revenues to replenish the Un-employment Insurance fund, thereby avoiding a $350 million increase in business taxes.

At the same time, the budget provides nearly $600 million more for public education through a new, fairer funding formula that is based on students, not zip codes. It also maintains the property tax rebate program, dedicating $1.5 billion to direct tax relief for property owners with incomes up to $150,000 a year.

Ultimately, the budget cuts $600 million from last year’s spending plan, only the sixth time since 1951 the state budget has spent fewer actual dollars than in the previous year. It is far and away the largest actual dollar, year-to-year reduction in state history.

In addition to the budget, Governor Corzine today issued Executive Order No. 103, which requires that in all future budgets, recurring expenses by the state must match recurring revenues.

“This hard fought for budget confirms the Legislature’s and my commitment to resetting New Jersey’s fiscal affairs. Let me be clear, the debate on this budget was challenging and we would not be taking the path we are without the cooperation, leadership and the disci-pline of the individuals standing with me,” Governor Corzine said.

“Not only have we significantly curbed state spending, but we’ve also dramatically changed the way the budget is crafted. Most importantly, we were able to prioritize our limited resources to produce what I believe is a very compassionate budget that protects the core responsibilities of government -educating our children, caring for the most vulnerable, maintaining vital public safety, and providing property tax relief for those who need it most,” Senate President Codey (D-Essex) said. “I’d like to thank Governor Corzine, Speaker Roberts and Senate Budget Chair Barbara Buono for their conviction and leadership.”

“Taxpayers said loud-and-clear they want state government to do more with less, live within its means, and put first things first,” said Assembly Speaker Joseph Roberts, D-Camden. “This budget heeds their call and reprioritizes the state’s balance sheet. It is a responsible plan that provides record levels of property tax relief, yet cuts overall spending by historic amounts.”

“We changed the process to help taxpayers by cutting spending and paying down our debt, but the job's not done," said Senator Barbara Buono, D-Middlesex, Chair of the Senate Budget & Appropriations Committee. “We need to initiate more reforms to further reduce wasteful spending, improve accountability and justify the use of every public dollar.”

“This budget takes the fiscally prudent steps New Jersey needs to emerge from the current economic storm in a strong position,” said Assemblyman Lou Greenwald (D-Camden), chairman of the Assembly Budget Committee. “The investments we make today will ensure that students can afford college, the uninsured have access to quality health care, and that property taxpayers can stay in their homes. It is a historic document that moves New Jersey in the right direction.”

“New Jerseyans deserve a state budget that is transparent and ensures their tax dollars are being wisely spent,” said Assemblywoman Nellie Pou (D-Passaic), chairwoman of the Assempbly Appropriations Committee. “At a time when New Jersey's families are being forced to tighten their belts it is only fair that state government does the same.”

“We are making good on our efforts to restore our state's fiscal integrity and to provide for our most vulnerable residents,” said Assemblyman Gary Schaer (D-Passaic), vice chairman of the Assembly Budget Committee. “The Governor and Legislature have only begun down a long and difficult road that is requiring us to redefine the scope of state government. Ex-traordinarily difficult choices remain to be made, but we are on the right path.”

In addition to the budget appropriations bill (S2009/A2800), Governor Corzine also signed into law several other component pieces of legislation, including:
• S1979/A2803 – Abolishes Department of Personnel
• S1980/A2808 – Abolishes NJ Commerce Commission.
• S2043/A2806 – Allows up to $9 million from "Shore Protection Fund" to be used to help defray State park and forest operation and maintenance costs
• S2045/A2807 – Delays phase-out schedule of transitional energy facility assessment unit rate surcharges.
• A-2809/S-1978 “Health Care Stabilization Fund Act”; creates fund in DHSS to provide grants to health care facilities to maintain access to essential health care services
• Executive Order No. 103 – Requires recurring revenues match recurring expenses in all future budgets.

Formally introduced at a joint session of the Senate and General Assembly on March 3, the budget was passed by the Legislature and sent to the Governor for his signature on June 23, a week before the statutory deadline for a balanced budget.

Budget Highlights, detailed charts on revenues and expenditures and other related documents can be found at http://www.state.nj.us/treasury/

GOVERNOR CORZINE SIGNS ORDER BARRING RELIANCE ON GIMMICKS AND ONE-SHOT REVENUES IN FUTURE BUDGET PROPOSALS

TRENTON – In conjunction with the signing of the New Jersey budget for the 2009 Fiscal Year, Governor Jon S. Corzine today signed an executive order prohibiting the submission of a proposed state budget that relies on one-shot revenues and is not balanced with recur-ring revenues. The full text of the executive order is below.

EXECUTIVE ORDER NO. 103

WHEREAS, the State of New Jersey continues to confront a multi-billion dollar structural budget deficit caused by many years of bipartisan fiscal mismanagement and short-sightedness; and

WHEREAS, despite the significant challenges posed by that continuing structural imbalance, this administration has succeeded, working cooperatively with the Legislature, in making great strides to reduce the State’s reliance on non-recurring sources of revenue to fund recurring State expenses; and

WHEREAS, in past years, surplus funds generated by unanticipated revenue growth or savings achieved through operational efficiencies were immediately redirected to new or ex-panded programs, postponing hard but overdue choices on budget reductions; and

WHEREAS, repeated past failures to make those difficult choices and reductions has resulted in funding gaps that further exacerbate the State’s precarious structural budget imbalance; and

WHEREAS, New Jersey can no longer afford to merely get by, year after year, by focusing narrowly on the short-term finances of the State; and

WHEREAS, the temporary fixes and stopgap measures that have been relied upon in past fiscal years to manage the State’s finances can no longer be tolerated; and

WHEREAS, from the outset of the administration, I have emphasized as one of my highest priorities that recurring revenues must meet or exceed recurring expenses; and

WHEREAS, now more than ever, it is not only prudent, but imperative, that the State’s finances be managed responsibly, with a focus on maximizing debt reduction and restricting State expenditures to levels matching or within recurring revenues; and

WHEREAS, as Governor, I have a responsibility to ensure a balanced budget, manage the operations of State Government effectively and efficiently, and maintain necessary government programs and assistance to the public; and

WHEREAS, Article VIII, Section II, paragraph 2 of the New Jersey State Constitution (1947) requires that State government expenditures do not exceed available State revenues; and

WHEREAS, N.J.S.A. 52:27B-31 and -26 empower the Governor to prohibit the expenditure of existing or future appropriations, and to set aside necessary reserve funds, if necessary to avoid a budget deficit and to guard against extravagance, waste, or fiscal mismanage-ment in the administration of any State appropriations; and

WHEREAS, the time has come to build upon the foundation laid in the last three budgets and create a mechanism to help eliminate the practice of relying upon non-recurring revenues to fund recurring expenses of State government;

NOW, THEREFORE, I, JON S. CORZINE, Governor of the State of New Jersey, by virtue of the authority vested in me by the Constitution and by the Statutes of this State, do hereby ORDER and DIRECT:

1. For purposes of this the State” means the aggregate amounts appropriated from the certified revenue of the State in the general appropriation law and all other laws supplementing the general appropriation law that appropriate money for any purpose in a fiscal year.

b. “Certified revenue of the State” means the revenue certified by the Governor pursuant to Article VIII, Section II, paragraph 2 of the Constitution of the State of New Jersey.

c. “Recurring revenue of the State” means the portion of revenue determined by the State Treasurer in consultation with the Office of Management and Budget, and as set forth in a certification by the Governor separate from and in addition to the certification required pursuant to Article VIII, Section II, paragraph 2 of the Constitution of the State of New Jersey, as recurring revenue of the State.

2. For fiscal years beginning on and after July 1, 2008, the State Treasurer, in consultation with the Office of Management and Budget, shall prepare an estimate of the recurring revenue of the State for each fiscal year. For fiscal years beginning on or after July 1, 2009, a certification setting forth such estimate shall be prepared for inclusion in the Governor’s annual budget message to the Legislature for the year for which the Governor is making the budget recommendation.

3. In presenting the annual budget message, the Executive Branch of State Government shall not request or recommend appropriations of the State in an amount in excess of the certified amount of recurring revenue of the State for the fiscal year for which the budget recommendation is made, except as provided in this Order and in P.L.2008, c.22.

4. The certification of recurring revenue of the State required pursuant to section 2 of this Order shall be appended to the general appropriation law upon enactment thereof.

5. Recurring revenue of the State may be recalculated and recertified from time to time during the fiscal year, if appropriate.

6. For fiscal years beginning on and after July 1, 2009, it shall be the recommendation of the Executive Branch that any certified revenue of the State that is in excess of the amount of recurring revenue of the State shall not be available to support appropriations of the State, but rather shall be credited or appropriated to the “Long Term Obligation and Capital Expenditure Fund” for the purposes of paying for State capital improvements and the costs thereof, retiring and defeasing debt and the costs thereof, or making supplemental payments to reduce the unfunded post-retirement health benefits liability for members of and to re-duce the unfunded pension liabilities of the Public Employees’ Retirement System, the Teachers’ Pension and Annuity Fund, the Police and Firemen’s Retirement System, the State Police Retirement System, and the Judicial Retirement System, and the costs thereof, and making supplemental payments to reduce the unfunded post-retirement health benefits liability for members of the Alternative Benefit Program, and the costs thereof.

7. The provisions of this Order shall not be construed to render any balances in the “ Long Term Obligation and Capital Expenditure Fund” or any other fund unavailable for meeting the costs of any emergency which requires an immediate response in the protection of the life, safety, or well-being of the citizens of this State , or to affect the Governor’s constitutional obligations to take care that the laws be faithfully executed and otherwise to act in the best interests of the people of the State.

8. This Order shall take effect immediately and shall continue in full force and effect until rescinded or modified by the Governor, or superseded by statute.