CourierPostOnline

Corzine Unveils Stimulus Program

CourierPostOnline — Friday, October 17, 2008

By LISA G. RYAN
Gannett State Bureau

TRENTON — Gov. Jon S. Corzine unveiled an economic stimulus plan Thursday intended to immediately assist New Jersey's neediest households, spur short-term employment, support long-term economic development and hold state spending in check.

The state will spend an estimated $150 million of its own money on the plan and also tap into about $112 million in added federal funding it's receiving to help people pay their energy bills and stabilize neighborhoods hit hard by the foreclosure crisis.

"Too many of our neighbors and friends are living with a layoff, lost health-care coverage, a mortgage larger than the value of their home or a late notice on a credit card bill," Corzine said. "I say we cannot stand idly by."

The foreclosure crisis is the first critical challenge, Corzine said.

The state will use $51.5 million in federal dollars to mitigate the effects of home foreclosures on neighborhoods and direct about $98 million in new and existing state funds toward foreclosure prevention efforts such as mortgage refinancing for struggling households, financial counseling, mandatory mediation for homeowners contesting their foreclosures and low-cost legal services for people fighting to stay in their homes.

Legal Services of New Jersey, which will get $9 million in state funding under the plan, and New Jersey Citizen Action, a nonprofit that advocates for working families, applauded the governor's foreclosure proposal for doing what they say the federal government's $700 billion bailout of financial firms failed to do — directly help ordinary people hurt by the economic crisis.

But Steven Lonegan, a conservative activist mulling a run for governor, criticized the efforts as a safety net for irresponsible people who bought homes they couldn't afford.

"This is totally the wrong approach," said Lonegan, arguing the state should be cutting spending, not adding to it.

Corzine said he directed state departments and agencies to prepare $500 million in contingency cuts and start eliminating planned equipment purchases, consultant contracts and lower priority programs. Based on sales and income tax revenue collected between July and September, the state projects it will have a $400 million revenue shortfall for this fiscal year.

"The one certain principle the public can count on is that spending will match revenues. At the end of this fiscal year, spending will be less than the $32.9 billion approved in June," Corzine said.

State revenues depend on people earning an income and spending it to buy things, lawmakers said. To grow jobs, Corzine said he's accelerating an estimated $5 billion in road, school and mass transit projects now on the drawing board to create about 43,600 jobs.

Assemblyman Louis Greenwald, D-Camden, chairman of the Assembly Budget Committee, believes public works projects will get people to work immediately, which will revitalize the state's economy.

"What's wrong with getting these projects that are already on the books going now?" said Sen. Jeff Van Drew, D-Cape May.

While New Jersey is limited in what it can do amid global financial turmoil, Assembly Speaker Joe Roberts, D-Camden, said the governor has the right priorities and characterized his plan as "smart and coordinated and aggressive."

Sen. Diane Allen, R-Burlington, however, called it risky.

"Pension funds are not the way to go," she said. "I'm wary."

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