When New Jersey’s Governor Corzine released the FY 2010 budget last month, it showed a surplus by $500 million, through a combination of cuts, tax increases, and stimulus funds.
But yesterday the Office of Legislative Services has issued an update, which finds that the budget runs a $100 million deficit.
Revenue projections, the OLS suggests, were too rosy in the FY 2010 budget proposal. This suggests questions about the fungibility of the stimulus finds: It may be that the governor can find the money by pulling money out of education increases.
Further tax hikes and pension holidays are the last thing the state should do. More cuts are the way to go, but given recent history, its an open question: Will states be asking for a second bailout?