The FY 2010 Budget Address;
The global recession took a further toll on our revenues, so we have cut almost $4 billion in baseline spending from this year's budget. But before we cut, we made a value-based judgment to take some things off the table...
Now, let's lay out the numbers in basic terms. This fiscal year, which runs through June, the state will take in about $30 billion - about $3 billion less than we originally planned. In the coming FY 2010, we're projecting base revenues of only $28.5 billion.
Even with important help from the federal government -- the declining revenue meant we had to make deep cuts in spending to balance the 2010 budget. With respect to budget cuts, there are two ways to compare the numbers: in absolute terms - as I just outlined - or in terms that reflect baseline growth. In absolute terms, we need to cut $3 billion to bring this budget into balance. In baseline growth, we need to find a "staggering" $7 billion in spending and revenue solutions. As you all can appreciate, baseline growth is a more practical measure of the state's budget gap.
Baseline numbers include increases that are mandated by statute, contract, and the courts - contractual wage increases, for instance. A baseline comparison also includes increases in health care and energy costs, supplemental school funding, debt service and court-mandated actions that increase child-welfare expenses.
A family sitting around the kitchen table understands the real pressures in baseline growth. Their health care costs are going up every year their energy costs soared in 2009 and the cost of nearly everything else - from food, to child care, to college tuition - continues to rise. The state budget is no different....
That still leaves a $5 billion gap in the budget, which we have attacked with $4 billion in cuts to programs, rebates, pension payments, and state worker salaries, In all, over 850 line items in the budget have been cut. The largest cuts will come from reductions in a scaling back of homestead rebates by $500 million, and reducing by another $500 million payments to the pension fund....
With the talent, the work ethic, and the strong character of our people, New Jersey will lead the way. I believe in our common desire to do what is right. I hope and expect to see that spirit reflected in the final budget, a budget that values children, seniors, and the most vulnerable, and asks a little more from the rest of us.
For Discussion: What do you think of the budget speech? What does he mean by baseline growth?