Corzine eyes pension and wage economies

Philadelphia Inquirer reports:

Gov. Corzine called yesterday for cutting municipalities' April pension payments in half, and trimming them through 2012, to help local leaders cope with the difficult economy and avoid massive property-tax increases.

Corzine also said he would seek givebacks from state workers, possibly including wage freezes or layoffs, to help New Jersey cope with a $1.2 billion shortfall in the current state budget and an even larger projected gap next year.

The two moves are Corzine's latest attempt to control the fallout from the nation's economic crisis, but they could further weaken New Jersey's ailing pension system and set up a confrontation with state workers.

The pension move is aimed at easing towns' costs in the near term, giving them the flexibility to keep taxes in check.

"Taxpayers deserve help, and they are demanding it," Corzine said in a speech to hundreds of municipal officials gathered for their annual convention in Atlantic City. They applauded when he made his proposal.

But the plan comes as state and local governments face a long-term pension shortfall that topped $28 billion as of June 2007. The gap includes a shortfall of more than $10 billion for the local governments that would get a deferral this year.

And the shortfall is sure to grow. New Jersey's pension funds lost $9 billion, roughly 13 percent, just in October.

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