NJ Governor Shifting State TBED Priorities

NJCST Out, Cancer Research In

Tight fiscal times are the norm for state and local governments across the country. While the federal government can ponder record-busting deficits for FY 2004, declining revenues are forcing state leaders to take scalpels, knives, axes and in some cases even chain saws to their budgets. Most budget proposals for 2004 include some sort of revenue enhancement measures – new taxes, eliminating loopholes and credits, increasing user and service fees – but none of the states are relying completely on increasing revenues to deal with their shortfalls. There are also spending reductions.

Budget cuts also can provide a glimpse of a governor's core priorities and the political clout of particular constituencies. What stays in or is spared the deepest cuts can be revealing. The 2004 budget cycle in New Jersey, which got underway February 4 with Governor James McGreevey's budget address, provides an example. Facing a projected $5 billion deficit, Gov. McGreevey spent much of his address to the New Jersey legislature outlining a budget request that "contains cuts I abhor and eliminates programs that I support."

In addition to cutting university and college aid by $100 million, the budget proposal eliminates 109 programs "saving nearly $300 million." More than $50 million of that savings comes from eliminating two economic development programs:

• the Business Employment Incentive Program ($38 million), which provides incentive grants to companies creating company at least 25 new jobs in targeted urban communities or at least 75 jobs in a suburban area. Qualified businesses could apply for periods as long as 10 years for incentive grants up to 80 percent of the New Jersey personal income tax withholdings from new jobs created. And,
• the New Jersey Commission on Science and Technology ($15 million), the state's lead organization since 1985 for the development and oversight of the programs in science and technology that can advance economic development and employment in New Jersey. NJCST supports the state's university R&D programs, venture capital and business loan funding, incubators, and SBIR assistance.

Saved from the axe, though, is Gov. McGreevey's life sciences research initiative.

"I have a vision of New Jersey as a national leader in medical research. In last year's budget, we provided $20 million for cancer research. This budget will continue our efforts by providing $18 million for New Jersey's battle to fight cancer," the Governor said in his budget address.

The budget process now moves to the state's legislature, which has an opportunity to reveal its own core priorities. The Senate is split evenly between the Democrats and Republicans. The General Assembly is controlled by the Democrats. Gov. McGreevy also is a Democrat.