Joan Verplanck, President, New Jersey Chamber of Commerce
May 14, 2008

Before I start, I would like to acknowledge Bob (Franks), Phil (Kirschner) and John (Galandak) for all they do on behalf of the employer community of New Jersey.

New Jersey has the third highest debt burden in the nation, which calculates to $3,700 owed by every man, woman and child.

If you combine the current bonded debt of $32 billion with the anticipated unfunded pension liability and post retirement medical liability for workers in the state benefits system, the total state debt rises to an astronomical $115 billion.

This brings us to why we are here today.

Governor Corzine proposed a $32.9 billion budget in February that cuts spending $500 million below the $33.5 billion budget signed last year.

The proposal, which demonstrates fiscal responsibility, was something not seen in Trenton for a long time. It sent a message that the state is finally going to focus on fixing what's broken - a budget that has risen from $16.4 billion in fiscal 1998 to $33.5 billion in fiscal 2008.

As is always the case, those threatened with cuts have been meeting with legislators to make the case for full restoration of their funding.

It is important that our legislators stand firm. We can't afford to increase spending by one single dollar - and backing away from the Governor's proposal would be a huge mistake.

Necessary services can be funded within the proposed cap, provided that appropriate cuts are made. There is enough money in the budget to do what needs to be done if everyone commits to supporting priorities and cutting luxuries.

Revenue projections are up one week and down the next. Rather than base ongoing spending on ever-changing projections, it would make sense to budget for the status quo and pay down debt with any surplus revenue that we're lucky enough to have.

New Jersey can't afford to spend more than we secure in recurring revenues - not when we owe billions and billions and billions and billions of dollars.

Increasing spending now would be equivalent to someone in severe debt and unable to make ends meet, going out to Best Buy and purchasing the latest 65-inch LCD flat-panel television, confident that he could make the first twelve payments but with no income source identified to actually pay it off.

It would be irresponsible and would be a purchase that person never should have made and could not afford.

There is no difference between that scenario and the situation facing our elected leaders. Taking on spending today, using temporary surplus funds without concern for the out years, is just as irresponsible as buying a TV you can't afford.

Therefore, along with the others here today, we request that members of the legislature stick to the Governor's original plan by holding the line on spending.

Back in January, the chamber endorsed the Governor's financial restructuring and debt reduction plan provided certain fiscal reform measures were put in place.

We called for controlling state spending, ensuring revenue raised goes to intended purposes, reforming the state pension and benefits systems, creating efficiencies within government, including eliminating and consolidating departments, and paying only for programs the state can afford.

My Board and members still expect these conditions to be met - we have not forgotten about them - and controlling state spending in next year's budget, as well as all future budgets, is a critical part of the expectation.

In wrapping up, I want to thank the Governor for putting forth a bold proposal that breaks the negative spending patterns of the past. Our support for a cost containment program hasn't waned; indeed it remains solid.

New Jersey will only be able to afford the LCD big-screen flat panel television when we are no longer on a fixed budget and have enough money in the bank to make ALL of the payments. It appears it will be some time before that happens.

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