From the Daily Record:
New Jersey will not follow New York City in reopening its budget to make additional spending cuts in response to the Wall Street turmoil, Gov. Jon S. Corzine indicated Wednesday.
New York Mayor Michael Bloomberg Tuesday directed city agencies to cut spending by about $500 million in the fiscal 2009 budget year, which began July 1. Bloomberg’s order for more spending cuts came after $1.3 billion was already removed from this year’s budget, said Marc Lavorgna, a spokesman for the mayor.
“Approximately 10 percent of all city tax revenue comes from Wall Street,” Lavorgna said.
Financial services are also a major sector of the New Jersey economy. According to state labor department statistics, some 266,000 New Jerseyans work in the sector — down 8 percent in the past year, but still accounting for one of every 15 nonfarm jobs.
Corzine has called New Jersey “vulnerable” to the Wall Street turmoil and has projected a sharp decline in tax revenue coming to the state. Nonetheless, he’s holding off for now on making more budget cuts, his staff said.
“The governor had the foresight to recognize that the national economy was in a downturn, and he took unprecedented measures to ensure fiscal responsibility in his budget by reducing overall spending, cutting the size of government and dedicating money to reduce state debt,” said Robert Corrales, Corzine’s spokesman.
In a prepared statement Tuesday, Corzine himself said this year’s budget is the first one in state history to cut hundreds of millions of dollars of spending. He said he had not seen numbers to warrant reopening the budget but added “we will take responsible action as the facts unfold.”
Across the Hudson River, New York City Budget Director Mark Page in a letter to city agency directors predicted there will be fewer finance sector jobs well into the future and cautioned this will hurt the city’s budget because of its reliance on tax revenue from workers in the financial services industry.
Even though the full effect of the financial crisis on the city’s budget won’t be known for some time, Page told department heads that New York must start cutting costs now because forecasts show billion-dollar budget deficits in each of the next three fiscal years.
“(O)ur forecast future deficits will not be cured, as has been the case for the last few years, by an improvement in that forecast and higher than expected revenues,” Page wrote.
“We assume that every job loss on Wall Street causes two other job losses somewhere else in the city economy,” Lavorgna said.
Assemblyman Joseph Malone III, R-Burlington, reiterated his call Wednesday to reopen the state’s current budget and look for potential areas to cut.
“If Bloomberg can do something similar to what I’m asking for, why can’t the governor do it?” asked Malone, who sits on the Assembly Budget Committee. “I’d hate like hell to wake up in two months and have serious financial problems in the state because we didn’t stand up and take a look at our budget.”