In New Jersey, yesterday's votes for a $32.9 billion budget came on the same day lawmakers approved another proposal, also backed by Corzine, to borrow $3.9 billion for school construction.
The new budget, pushed by Corzine as a step toward repairing state finances, slashes support for property-tax rebates, colleges, hospitals and municipalities. But Democrats say it answers pleas for a slimmer government.
"It is the budget the people of New Jersey requested. It is the budget the people of New Jersey demanded," said Assembly Budget Committee Chairman Louis D. Greenwald (D., Camden).
Greenwald said the plan is the fourth in 57 years that reduces spending from the previous year.
Assemblyman Joseph R. Malone III, the Republicans' ranking budget officer, commended Democrats for the spending cut but said the plan unfairly shifts tax burdens to small, suburban towns without targeting government waste.
"If this budget had been crafted with the right priorities, we could have reduced the size of the budget and still been able to provide property-tax relief and funding for programs that benefit our state's most vulnerable citizens," said Malone, of Burlington County.
Other Republicans also criticized the cut that reduces or eliminates property-tax rebates for about 500,000 homeowners.
The benefits bill added a note of drama after Democrats approved the budget and school-borrowing plans with ease. The most significant changes would eliminate Lincoln's birthday as a holiday for government workers, increase the minimum salary to qualify for pension credits to $7,500 a year for most government workers and educators, and raise the retirement age two years, to 62.
Republicans at first largely abstained on the bill in the Assembly, saying it wasn't tough enough. But after huddling privately and meeting with top Democrats, many supported the changes, and the bill was passed.
A visibly annoyed Assemblyman Richard Merkt (R., Morris), who voted against the plan, said: "The resolve dissolved."
The stalemate broke, according to Assembly Minority Leader Alex DeCroce (R., Morris) and Senate Majority Leader Stephen Sweeney (D., Gloucester), when Corzine agreed to require departments to report how many workers they hire to replace employees who take an early-retirement package.
"The reforms cannot happen in a partisan nature," Sweeney said. "We saw that tonight."
Supporters of the benefit cuts said they would help dig the state's pension system out of its $25 billion shortfall.
Influential labor unions made their presence felt with contingents watching the votes from the Senate and Assembly galleries. They have said it is unfair to make changes a year after they signed a new contract.
Corzine's approval is still needed on the benefits plan and budget. Corzine had called for a smaller bottom line as a stride toward repairing state finances after years of multibillion-dollar deficits and ballooning debt. Despite the cuts, he noted that the budget adds more than $500 million for public schools and about $9 million to expand health coverage.
The plan also makes progress on another Corzine priority by paying off $650 million of the state's $32 billion debt.
But lawmakers voted to add $3.9 billion of borrowing to fund a new round of school construction. Urban lawmakers, saying the money is needed to repair or replace aging and overcrowded schools, linked their budget votes to the school construction plan.
Sen. Ronald Rice (R., Essex) said new schools for the state's needy students are long overdue.
Republicans said the price tag, which started at $2.5 billion, grew too high and should have gone to the public for final approval.
"We have a belief in our state: Trust the voters about whether or not we should bond their money and their kids' money," said Sen. Bill Baroni (R., Mercer).
Corzine himself has called for giving voters more oversight on state borrowing, and the Senate and Assembly advanced a measure doing just that hours after approving the latest round of bonding.
The new money, which will restart a school-construction program plagued by waste in its first iteration, includes $2.9 billion for 31 largely urban schools covered by court mandates on spending, including Burlington City, Camden, Gloucester City and Pemberton, and $1 billion for the rest of the state's districts.
While Democrats said the budget includes no tax increases, it does raise $62 million by extending a tax on utilities that was to have begun a phase-out this year.
Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.
