Governor faces boisterous crowd on debt reduction Said that Route 440 toll, Middlesex portion of new rail line, is off the table BY CHRIS GAETANO Staff Writer EAST BRUNSWICK - As Gov. Jon Corzine walked onto the stage at East BrunswickHigh School, a loud wave of boos and hisses issued forth fromthe packed auditorium. While signs, banners and props were specifically prohibited, many in the audience didn't need them to make their displeasure known. Still, he said that the reaction was not as bad as it has been in some other places. "I would say this [event] was pretty balanced," Corzine would later say to reporters. On Feb. 10, the governor engaged Middlesex County residents in a town hall-style meeting to discuss his plan to address the state's $32 billion debt load. During the presentation, Corzine was faced with periodic jeers and heckles, especiallywhen talking about pensions, thoughmore often than not these would be met with shouts for quiet fromother audiencemembers. People whose questions were deemed to be straying too far from the topic at hand also were shouted at by the audience. Still, while the event was not a total blood-letting, it appeared that there were few, if any, people in favor of the governor's proposals. Earlier this year, the governor had finally rolled out the details to hismuch-speculated upon assetmonetization plan, which he said was to address the state's ever-increasing debt load. The idea has four main components. The first is to initiate an immediate spending freeze, meaning that the budget will remain at about $33.5 billon, which would mean about $2.5 billion in cuts to make up for inevitable rising expenses such as energy and pensions. The second component is to limit future spending to only those things that will produce revenue. The third is to limit future borrowing, which he said would be accomplished through a constitutional amendment that would require all state borrowing to be approved by the voters unless there is already a dedicated revenue source to pay it off. The fourth and final component, though, is generally considered the most controversial, which is to increase tolls and use the resultant revenue to pay off debts and fund transportation projects. The plan involves at least four 50 percent toll increases, starting in 2010 and continuing in 2014, 2018 and 2022. After that, tolls would continue to increase every four years to keep up with inflation until 2085. The roads would be overseen by what has been called a Public Benefits Corp., an independent entity that will issue bonds that would be paid off by the increased toll revenue. The money gained would then be used to pay about half of the state's debt,with the remainder going into funding road improvements. Absent from this plan was the proposal to make Route 440, which is a popular conduit for people looking to get into New York, a toll road. When the governor first brought up this possibility, it was met with widespread anger and criticism from many within Middlesex County, and this reaction caused the governor to back away from it. "I'm a practical guy. Have been all my life. It's not happening and it's not worth a lot of conversation," said Corzine. He later went on to say that the revenues generated from Route 440 would have been around $500 million, which, in the grand scheme of things, he said was "insignificant [to] the overall picture." The governor said that the Route 440 proposal was a way to test the water and see how people would react to adding more toll roads. "Some people suggested we put [the toll] on to see how tolling new highways might go down. Obviously, not so well," said Corzine. With this in mind, he said he would not be considering any new tolls on any new roads, saying that it is a non-starter. During the meeting, Corzine also announced that the Middlesex portion of the prospective Monmouth-Ocean-Middlesex (MOM) rail line, which had garnered some amount of controversy among some towns in Middlesex County, such as South Brunswick, was also off the table. "I don't think we need to burden Middlesexwith that decision.…It's theMO, not the MOM," said Corzine. During the meeting, Corzine said that the only states with more debt than New Jersey are New York and California. When state bond obligations, unfunded pensions and post-retirement medical benefit costs are added up, this amounts to about $16,000 per person in the entire state. Consequently, the state must annually pay out $2.6 billion for debts, $2.3 billion for unfunded pensions and $4.5 billion for health care. "We didn't set up any reserves. There isn't an insurance company [in the private sector] … that doesn't have any reserve," said Corzine. He took great pains to cast his current plan as the best choice ofmany unpalatable choices, saying simply that raising toll prices is the "least burdensome" of various choices because, he said, about 45 percent of people who use the tolls are from out of state driving through New Jersey. He presented four other options that could yield similar results but would have worse effects than the toll hike, he said. One would be to raise the income tax by 20 percent. The secondwould be to raise the sales tax by 30 percent. The third would be to raise the gas tax by 45 to 50 cents. The fourth would be to take 13 to 15 percent out of the budget, which he said would increase property taxes because municipalities would need to pick up the slack where state services are to be cut.While he doesn't completely discount some combination of these things perhaps helping out, he said the toll plan would serve as a primary factor. "The fifth option is the toll plan we talked about. The fact is that some combination of thesemay well be possible, but the reality is, the only one that shares the burden with people outside of the state in any serious way is the toll hike plan," said Corzine. One point that was subjected to loud heckling and jeers was Corzine's assertions that waste, fraud and abuse, especially of the pension and health systems, did not account for as large a place in the state's fiscal woes as many people think. He said cuts in the budget would lead to diminished services instead. "There is not that level of waste, fraud and abuse, and you can go ahead and scream," said Corzine before being interrupted by a wave of shouts, "but there is not that level. And I would hope that people would believe that the cuts that are going to come aren't about waste, fraud and abuse but whether we're going to fund our children's education, whether we're actually going to be ale to serve the social needs of our developmentally disabled, our mental institutions, and make sure we have public safety with regard to our corrections institutions. You can talk about a lot of things, but the cuts are going to be into the real functions of government." The bulk of themeeting was taken up by people asking the governor questions. Two long lines formed at opposite ends of the room, and the questions alternated from one line to the other. Some questioned the legitimacy of the governor's assertion that 45 percent of toll payers are from out of state, a number acquired from E-ZPass data. Others wondered why the wealthiest New Jersey residents can't be taxed more, as well as the services the wealthiest residents use, such as hotel airports.Many also questioned why Corzine couldn't control costs by controlling pensions and health benefits throughmaking government workers contribute to their health insurance plans. "They get a free ride. … Why do you have to give state and county workers such massive pensions?" asked Abraham Quartin, of East Brunswick. To this, the governor said that a problem is that these pensions and benefits are bound in contract and that the state must honor those contracts. "A contract is a contract, and we'll live with the things we negotiated [in the past]," said Corzine. Other people offered suggestions, such as raising revenue by selling advertising at the Motor Vehicle Commission offices, which the governor said was "actually a clever idea." Others took the opportunity to link the state's debt woes to other issues. John Howard, of South River, said one way to cut spending would be to stop aid to Planned Parenthood, which he said was the largest provider of abortions in the country. Others suggested more intense lobbying to get out of Iraq, thus freeing up more federal aid. Still others suggested stopping all stem-cell research. David Brotman, of Highland Park, said he likes that the governor decided to hold the meeting, but also still believes that his plan needs a lot of work. "I think he truly believes he'd rather raise themoney frompartially outsideNew Jersey, but I think it's only fair to spread the burden across all the people who use our roads and bridges, not just those who use the turnpike and parkway, so even if we collect it all in state, I think it should be more across the state. But I support him being fiscally responsible," said Brotman.