Why not just cut spending?
New Jersey’s budget has a structural shortfall, meaning that recurring, mandatory expenses are growing at a faster rate than the recurring revenues needed to sustain balance in the budget from one fiscal year to the next. More specifically, expenses are growing as a whole by an annual average of 6 to 7 percent, while revenues are growing by an annual average of 3 to 4 percent. To achieve the Governor’s goal for restructuring, it is already assumed that New Jersey must “freeze” overall State spending from FY 2008 to FY 2009. To accomplish this “freeze,” approximately $2 billion to $2.5 billion in spending cuts and restraints are required to close the gap with the amount of recurring revenue growth available to the State budget. While $2 billion to $2.5 billion in cuts may appear small in comparison to a State budget of $33.4 billion, it is easy, but ill-advised, to oversimplify the challenge. Approximately three quarters of all budget spending goes back to New Jersey citizens in the for
