Sandy aid hit would undermine NJ governor's budget

TRENTON, N.J. (AP) -- The budget New Jersey Gov. Chris Christie will present on Tuesday could be thrown into turmoil by the end of the week — to the peril of the state's property holders — if President Barack Obama and Congress fail to strike a deal on looming federal budget cuts.

The cuts set to go into effect Friday would immediately reduce the size of the $60 billion Superstorm Sandy relief package for New Jersey, New York and Connecticut, and would cut funding for preschool education, special education and transportation, among other programs and services.

"In my calculations, this would set our state back at least several billion dollars when you take into account everything," said Rep. Bill Pascrell, a Democrat who was in Moonachie on Monday to discuss how the federal budget cuts could affect cities and towns up and down the New Jersey coast that are struggling to rebuild after the worst natural disaster in state history.

Pascrell said the jolt would be felt immediately in New Jersey, where the first $1.8 billion in Sandy relief money, which is due in April, would be reduced by $100 million; the state could see $3 billion less overall.

Christie's budget counts on Sandy funding to stimulate the state's still-sluggish economy and help municipalities along the coast whose revenue base was upended by the late October storm.

The Republican governor has told residents of hard-hit towns whose homes survived the storm to expect to pay higher property taxes.

Budget Officer Declan O'Scanlon, who represents some of the shore towns, said a portion of the Sandy aid was earmarked to cushion the blow.

"Regarding Sandy and property taxes, the way we're going to hopefully resolve that is with federal money," O'Scanlon said. "That's been done before in other jurisdictions where they've had massive storms like this."

"There are billions of dollars coming from the federal government," he added. "The administration has as a top priority dealing with the gaps, the gaps in insurance coverage, the gaps in people's ability to elevate their houses and what they can afford they're getting from insurance, another key gap is property tax gaps."

With less Sandy money to go around, municipalities already reeling from the storm could be squeezed further.

New Jerseyans pay the highest property taxes in the country, averaging $7,870 per household. The Division of Local Government Services estimated last month that up to 25 municipalities lost at least 5 percent of their tax base to Sandy.

Bill Holland, executive director of New Jersey Working Families Alliance, said New Jersey was unprepared financially to deal with an emergency like the superstorm because Christie has given $2 billion in tax breaks to corporations and allowed a tax surcharge on millionaires to expire during his first three years in office.

Holland said he expects to hear "more of the same" on Tuesday, but would like the governor to address New Jersey's continuingly high unemployment rate and a reversal of the state's failure to adequately invest in higher education.