New Jersey Mayors Hold Their Breath Over State Budget

New Jersey Governor Chris Christie has built a national reputation as a fiscal conservative, but New Jersey mayors say they worry a $10.5 billion budget gap will be closed at their expense.

Christie, a Republican, will give his second annual budget address on Tuesday afternoon. Political experts say voters should expect tough reductions in services because Christie has vowed not to raise taxes.

"I think he's going to push the envelope with the budget more than he did last year in terms of substantive cuts," said Julian Zelizer, a professor at Princeton University.

But he added: "This is about restoring fiscal balance to the state, and the politics of doing that, whether you're a Republican or a Democrat, are never pretty."

The budget address will serve as a roadmap as Christie and the Democrat-controlled state Legislature kick off budget negotiations for the fiscal year that begins July 1.

It will also be watched in other U.S. states with similarly daunting budget shortfalls. Christie's anti-tax and tough-on-unions approach has help vault him onto the national stage, where he is seen as a presidential contender who might bridge the Tea Party movement and mainstream Republicans.

POOR MARKS ON PENSION FUND

But some fiscal monitors have offered a less glowing review, faulting Christie for skipping billions of dollars in contributions to the state pension fund.

On Feb. 9, Standard & Poor's cut the state's bond rating from "AA" to "AA-minus," citing the state's poorly funded pension system, substantial post-employment benefit obligations and above-average debt levels.

Since taking office last January, Christie has pushed a lean-government, low-tax agenda that included closing last year's $11 billion budget deficit. The $29.3 billion fiscal 2011 budget cut spending on hundreds of state programs and reduced spending by 8.9% from the adjusted fiscal 2010 appropriation of $32.1 billion.

But New Jersey mayors facing huge budget gaps of their own have said they have no more room to cut. High-crime cities like Newark and Camden have ordered layoffs to already stretched police forces in order to balance their budgets.

"If I laid off everybody, including myself, we would never be able to close this budget gap," Paterson Mayor Jeff Jones, who is preparing to lay off 150 cops in the state's third- largest city, told Reuters.

The New Jersey State League of Municipalities last week called on Christie to limit the amount of municipal revenues -- which the state collects on behalf of towns and cities, and then directs back -- it can siphon off for itself, saying the practice has "poked gaping holes in local budgets."

In his State of the State address last month, Christie repeated his vow not to raise taxes and called for reforms in education as well as state pensions and health benefits.

He has already made some progress in attracting bipartisan support for his policies.

Last week, Senate President Stephen Sweeney announced a plan to force public-sector employees to pay considerably more for post-retirement health-care costs, borrowing aspects from Christie's own plan.

"He has been very effective at dominating the conversation in the state and getting practically everything he wants from the state Legislature," said John Weingart of Rutgers University. "It's tough times for local governments and he doesn't pretend otherwise.