At 10:30 AM EST The Gov. may declare a Fiscal State of Emergancy, it is speculated.





[link to www.nj1015.com]



Today, Governor Chris Christie will address a special joint session of the Legislature regarding the state's current year budget deficit. Last week, Christie spoke with both Senate President Steve Sweeney and Assembly Speaker Sheila Oliver to request the joint session. The time of the address has not yet been announced.

It is extremely rare for a Governor to speak with the full legislature regarding a mid-year budget crisis, but Christie says there are reasons New Jersey is in this mess.

"The whole economic crisis we're in is generated, I believe from an onerous tax system that has driven business from the state," says the Governor. "It's because New Jersey has priced itself out of the market from a tax perspective and we've made ourselves incredibly business-unfriendly from a regulatory perspective." He says because job growth is the key to stimulating the state's economy he continues to speak with CEOs.

"Business leader both small and large in New Jersey need to know that there's a change of attitude in the Governor's Office and that there's also going to be a change of policy in the Governor's Office," explains Christie. He says the two things he hears most often from business leaders are, "we need tax relief and we need regulatory relief and if we don't provide those two things we are not going to see New Jersey come out of this awful economy that we're in."

Five sources with knowledge of Christie's plans with regard to today's address say he will propose additional furlough days for state workers and possibly lay-offs. They say there's only one real pot of money left in the state's coffers and it is supposed to go towards school aid. The sources, speaking on the condition of anonymity tell Millennium Radio News that Christie will propose withholding a massive amount of that funding, maybe as much as $1 billion. They say the Governor is likely to declare a state of fiscal emergency. We're told Christie is still finalizing his plans for Thursday. A spokesman for the Governor says, "We're not going to talk about what he is saying on Thursday at this point. The ultimate cuts are not finalized and there is still plenty of discussion amongst the governor's staff."

Christie insists the shortfall for the current fiscal year is just over $2 billion and the budget deficit for next year is over $11 billion. Last week, Rosen confirmed that Christie is in the ballpark and he warned that difficult financial times are going to plague New Jersey for quite some time.

Rosen says if New Jersey's economy grows at the historic rate of 4%-5% a year, "It is basically 2014 before we get back to where we were in 2008." He added that most economists do not expect that kind of growth so, "Going beyond 2011, the budget pressures that we face related to the revenue decline are not a short-term blip."

What makes crafting next year's budget more difficult says Rosen, "Is the Governor has taken revenues off the table as part of the solution and in the past we've used revenues to make up a significant fraction of the solutions." Rosen says he's not advocating for new or higher taxes. He's simply stating a fact.

Referring to next year's deficit, last week, Christie said, "If you fully fund everything, the numbers I have now are north of $11 billion. That's if you fully fund the pension payment, fully fund the school formula, fully fund all homestead rebates back to the original funding formula, not what was done last year."

Christie says, "It's a deficit of just over $11 billion. $27 billion or so in projected revenues. $38 billion or so in projected expenditures."

The Governor explained some factors playing role in the deficit. He says, "That is with the surcharge on small business and top rate taxpayers which have sunsetted and with the corporate business tax surcharge sunsetting on June 30."

New Jersey's budget shortfall for the current fiscal year could be as high as $2 billion and next's deficit could be five times that. Rosen delivered the sober news to the Senate Budget Committee yesterday.

Rosen said tax collections in almost every category are short of projections. He says the income tax is the only revenue source that is not under-performing.

"A 1.2 billion revenue shortfall for the year is not an unreasonable estimate," said Rosen. "Whatever the number is, if it's $2 billion or $1.5 billion or some other number, this is a budget problem that has to get resolved by June 30."

If spending cuts are made and all spending proposals are fulfilled, "It would suggest a budget problem in the current year, by the end of the year of slightly under $2 billion."

Joe Malone, the ranking Republican on the Assembly Budget Committee has asked Rosen to compile a list of funds that could be used as, "the Legislature grapples with a $2 billion hole in the state's current budget."

"Our state faces grave financial problems that we cannot ignore for another day," says Malone. "We need solutions and we need them now. The problem worsens every day we wait."

Last month, Rosen said, "You've got a structural deficit for 2011 of $8 billion, or $9 billion or $10 billion…..The precise number really doesn't matter. The magnitude of it is significant. It is similar to the magnitude that we faced last June." Last week, Rosen conceded that the FY 2011 deficit could be as high as $11 billion.

Many factors contribute to next year's problems. There is a $3 billion pension payment that may or may not be made. Rosen explains that New Jersey stands to receive $1.6 billion less in federal stimulus money. The State will lose about $1.1 billion as a result of temporary taxes that will expire. Property tax rebates cost the state roughly $1 billion and Rosen says school aid spending will increase by about $600 million due to the new education funding formula.