PACKET EDITORIAL, Feb. 4
By: Packet Editorial
It’s budget time in New Jersey, and the news is bleak everywhere you turn.
Gov. James E. McGreevey, who’s delivering his budget message today, is looking at an estimated $5 billion gap in the state’s Fiscal Year 2004 budget, and he’ll be proposing several one-shot revenue enhancers, along with major cuts in spending, in the coming weeks in order to balance this budget. In addition to freezing state aid to municipalities and school districts for a second straight year, he’ll be asking the Legislature to approve what a spokesman already has termed "significant, painful budget cuts."
These reportedly will include scaling back the pharmaceutical assistance program for senior citizens, cutting the budget for state parks and reducing aid to the state’s colleges and universities. Meanwhile, he’ll reportedly propose dipping into the state’s share of the national settlement with tobacco companies (as he did last year), delaying pension payments, eliminating property-tax rebates for homeowners with family incomes of more than $100,000 a year (last year, he eliminated rebates for those earning more than $200,000) and various other money-saving steps to stop the budgetary bleeding.
If times are tough at the state level, the outlook for municipalities and school districts is even bleaker. At least Gov. McGreevey and the Legislature have some options on the revenue side, like raiding the tobacco settlement fund, and some discretion on the expenditure side, like freezing state aid. Municipalities have far fewer options and school boards have practically none at all.
Unlike the state, which spends less than $1 out of every $4 it collects on direct services (the rest is disbursed in the form of aid), municipalities and school districts spend virtually all their money on direct services, with a very large chunk of it taken up by salaries. And unlike the state, which can dip into various accounts when it needs to find some revenue to balance the budget, municipalities and school districts are dependent almost entirely on two sources state aid and local property taxes for revenue.
A bill that would authorize municipalities to impose a tax on hotel and motel rooms would give places like West Windsor, Plainsboro and Princeton Borough another modest revenue stream to add to parking meters, motor vehicle fines, inspection fees and other nickel-and-dime sources. (It would be of no help, on the other hand, to Princeton Township, Montgomery or Rocky Hill.) But school boards have no parking meters, no ticket-writing police officers, no inspection permits and absolutely no place to turn other than property owners when costs are going up and state aid is staying flat.
Thus, the Montgomery Board of Education, in its preliminary budget discussions, is looking at the possibility of putting not only a second question on the April ballot, asking voters to approve operating expenses above and beyond the state-imposed budget cap, but an unprecedented third question seeking voter approval to spend additional funds to expand facilities.
And the Princeton Regional School District, reluctant to put a second question on the ballot so soon after voters approved $81.3 million in bonds for a renovation and expansion program that hasn’t even begun yet, is looking at ways to cut more than $2 million from its operating budget. Under the state cap, the district would be allowed to increase its spending by $1.4 million next year and the estimated cost of paying for salary increases alone is $1.3 million.
Even in the best of times, budgeting trying to balance expenditures with revenues, and trying to satisfy everyone who wants a piece of the spending pie can be a difficult process. This year, it’s already beginning to look like it’s going to be downright painful.