Pay-cut protest
By Jennifer Moroz and Kaitlin Gurney
Inquirer Trenton Bureau

TRENTON - As New Jersey legislators huddled behind closed doors, trying to reach a consensus on how to fill a more than $4 billion budget hole, about 5,000 state workers made a much more public statement on the spending plan: Whatever you do, don't balance it on our backs.

The raucous union rally, which swelled out from the Statehouse, drew an unusual visit from Gov. Corzine, who told the crowd exactly what it wanted to hear.

Sounding like a union leader himself, the governor vowed not to approve a budget that jeopardized state workers' pensions - or their salary and benefit contracts.

"I stand with you! I'll fight with you!" Corzine roared, his face growing as red as his tie as the crowd broke into cheers.

Legislators have until July 1 to approve or modify Corzine's $30.9 billion spending plan, which includes a sales-tax increase from 6 percent to 7 percent.

Seeking to avoid any tax increases, lawmakers have targeted Corzine's proposed contribution to the state's underfunded pension plan for a possible cut, and State Sen. Stephen Sweeney (D., Gloucester) and other South Jersey Democrats have advocated reducing state workers' wages and benefits by 15 percent.

"Last time I checked, a contract is a contract - negotiated in good faith, agreed to in good faith, and it will be fulfilled in good faith!" Corzine yelled.

In a direct slight to Sweeney, he added that "those who would cripple collective bargaining do a disservice to democracy."

Sweeney retorted that asking state workers "to come back to the bargaining table isn't an attack."

Drums and whistles sounded as rallygoers representing the AFL-CIO; the Communications Workers of America; the American Federation of State, County and Municipal Employees; and police and teacher unions filled almost an entire city block with signs saying, "A deal is a deal!"

Although the crowd booed at each reference to Sweeney's proposal, union organizers said the real point of the rally was to urge lawmakers to make the $1.3 billion contribution that Corzine has recommended for the state employees' pension system. The state pension-fund shortfall is approaching $30 billion as baby boomer public employees prepare to retire.

"We're here to deliver a very, very simple message... . Do the right thing and fund our pensions," said Joyce Powell, president of the 192,000-strong New Jersey Education Association. "The state may have taken a pension holiday, but we showed up every day."

But majority-party Democrats haggling over budget details say cutting the proposed pension contribution is one of the few areas of agreement.

"I don't expect the pension contribution to remain where the governor set it," said Sen. Wayne Bryant (D., Camden), chairman of the Budget and Appropriations Committee. "He's suggesting we contribute more than we have in the previous nine years altogether."

Democrats say shaving the pension contribution could avert some of Corzine's unpopular tax-increase proposals.

On radio station New Jersey 101.5 (WKXW-FM) yesterday morning, Corzine acknowledged that his plan to raise $430 million with a $1,424 monthly fee on each hospital bed in the state also faced too much resistance to pass.

His proposals for new taxes on water and liquor may meet similar fates, Democrats said.

The chief sticking point in budget negotiations is the sales-tax increase, which would collect $1.1 billion.

Reiterating remarks he made last week, Assembly Speaker Joe Roberts (D., Camden) said yesterday that Assembly Democrats did not support an across-the-board increase in the sales tax.

He said his caucus was willing to consider a "sales tax modernization" that would reevaluate which items were taxed - and Corzine's proposal to expand the tax to certain "luxury" items, including gym memberships and limo rides, to reap about $300 million.

At a congenial afternoon news conference, Roberts and Senate President Richard J. Codey (D., Essex) said they had met twice during the day for budget negotiations, including once with Corzine. The pair said they were determined to balance the budget with recurring revenue, not one-time gimmicks.

"We're not there yet, clearly," Codey said, "but I think we're making progress... . It was a good dialogue. No yelling."

Roberts said he was optimistic about having a budget in effect by the constitutionally set deadline.

Last year, when Codey was governor and Senate president, a weeks-long budget stalemate divided him and Roberts before the latest spending plan ever passed was signed into law on July 2.

Sweeney and other senators have declared a sales-tax increase "absolutely dead" in the Senate. But Codey yesterday said it was not yet off the table.

As the deadline nears, State Sen. Paul Sarlo (D., Bergen) said, "the sales tax becomes more of an option."

"I'm not supporting the sales tax at this juncture, but when I talk to my constituents, no one is really saying it is a problem," he said. "Many would rather see that than a patchwork of gimmicks and fees that never go away."

The NEA had tried in 2003 to get a court to require the legislature to fully fund the pension. It would do little more than put money into investment accounts.