Governor Focuses on Fiscal Health of N.J.

Making Steep and Unpopular Budget Cuts, Corzine Knows He Risks Losing Reelection

ATLANTIC CITY -- As he grapples with one of the country's worst fiscal crises, Gov. Jon S. Corzine crosses New Jersey sounding a bit like a budgetary Grim Reaper, darkly warning audiences of the pain already inflicted and the suffering still to come.

"Our finances in this state are out of kilter," he said at one stop, a meeting of county officials in the ballroom of a resort hotel. "We can no longer go on spending more than we take in."

He continued: "I'd like to be a government activist. But if we don't have the resources, we're actually kidding ourselves about the direction we're taking."

At another stop here, at the state's AFL-CIO convention, Corzine struck an equally somber note. "I know you're frustrated -- I'm frustrated," he told the assembled union members. "It's heartbreaking to make some of the choices we're making.

"We've borrowed until we're blue in the face," he added. "We've got to change. Change does not come easily."

The Democrat's bleak message is not one that politicians normally like to deliver -- and his popularity has plummeted as a result. But the governor, who ran Goldman Sachs investment bank before entering politics, has seized it as his mission to bring a dose of Wall Street reality to a state crushed by $32 billion in debt and a revenue shortfall forecast at close to $3 billion, the third worst in the nation after California and New York.

As Corzine and the legislature navigate toward a new budget, he is promising to hold it to $32.8 billion, freeze spending and begin paying down the huge debt. He has frozen government hiring and reduced the state's workforce, now down by about 2,000 people. He is cutting property tax rebates to some homeowners. He is proposing deep cuts in funding for hospitals' charity care for the uninsured.

He is planning to add $600 million for education, but to do that, he says, "I just have to cut something else."

None of this comes naturally to a self-described progressive, and he repeatedly uses the word "heartbreaking" when describing some of his cuts.

"He's not backed away from the notion that he's got to get this right," said Tim Vercellotti, a professor at Rutgers University's Eagleton Institute of Politics. "Here's a guy coming out of Wall Street and high finance who's looked at the books and said 'We've got to do things differently.' " He added, "Like him or hate him, you have to admire him for putting his cards on the table."

Sometimes, however, other politicians and the public have not liked those cards, forcing Corzine to withdraw some of his proposals under fierce opposition.

His major plan for paying down the debt and raising money for infrastructure improvements was to lease New Jersey's toll roads and raise toll rates about 50 percent annually beginning in 2010. He traveled around the state, carting charts and graphs to town meetings. But the criticism was ferocious, as his plan came to be seen simply as a toll increase, and he dropped the idea.