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No New Taxes -- Or Tax Cuts -- In Gov. Chris Christie's Budget Proposal

TRENTON, N.J. (CBSNewYork/AP) -- The $34.4 billion state budget Gov. Chris Christie proposed Tuesday makes a required $2.25 billion payment to the public worker pension fund without raising taxes but leaves virtually nothing left over to fund major new programs or initiatives.

Christie's restrained spending plan for the fiscal year that starts July 1 offers slight increases in K-12 and municipal aid, and increases higher education funding by $159 million, or about 8 percent. The budget also includes $5 million to allow some districts to implement longer school hours.

All but 6 percent of the expected growth in revenue, however, will be consumed by ballooning retiree and debt obligations.

"While this budget continues the fiscal discipline and pro-growth policies that we brought to Trenton four years ago, the budget doesn't do everything we all might have wanted,'' Christie said. "Not even close.''

For example, it does not include plans for a tax cut, a Christie proposal of two years ago that was thwarted by Democrats. And, it all but abandons earlier administration efforts to privatize certain services. It does, however, maintain property tax rebates at current levels for those who are elderly, disabled or earn less than $75,000 a year.

"I will tell you this: I appreciated the governor's tone today. It was concillatory and certainly an effort to work together," Democratic Assemblyman Louis Greenwald told CBS 2's Christine Sloan.

Christie is linking rising retiree costs to the state's inability to adequately fund other priorities such as education, tax relief and drug rehabilitation. In his state of the state speech in January, Christie proposed a longer school day and longer school year, but did not say how he intends to fund it.

"We just can't raise taxes enough to pay for the exploding costs of public employee pensions and benefits, not to mention the burden it would place on our already overburdened taxpayers,'' Christie said.

"Without additional reforms, New Jersey taxpayers still owe $52 billion to fully fund the pension system,'' he said.

Democratic leaders responded Tuesday by saying they disagree with Christie's suggestion that the state needs to make changes to its pension system.

State Senate President Steve Sweeney said, "We've done what we need to do with the pension system.'' He was referring to major changes made in 2011, when public employees were told to pay more for their benefits and the state agreed to increase its contributions gradually.

Christie, 51, said changes adopted during his first term didn't go far enough. He did not propose any specific new initiatives.

Christie helped cement his national reputation by taking on public employee unions. Changes enacted during his first term require public employees to pay more for benefits, postponed cost-of-living increases for retirees and forced the state to start paying into the fund after years of skipping payments. The powerful teachers union spent millions in ads in an unsuccessful attempt to defeat the proposals.

Christie plans on making a record $2.25 billion contribution to the fund in the budget year that begins July 1, which is the amount required by law but just over half of what the state actually owes.

"That payment is nearly the equivalent of the total payments made in 10 years before we arrived by 10 governors," Christie said.

Some 78 percent of that goes toward the state's unfunded liability, accumulated by years of the state skipping its payment and the Legislature agreeing to enhance retirement benefits without having the means to fund the change.

Pension, health care and debt obligations suck up 94 percent of new spending, Christie said.

The current budget is another source of potential shortfall, as revenues are lagging projections by about $250 million seven months into the fiscal year.

Christie plans to take his fiscal proposal to residents at a town hall meeting Wednesday in Morris County.

The budget speech comes as the Republican's administration is marred in scandals that have hobbled the start of his second term and threaten his future political plans.

Allegations that Christie aides threatened to withhold storm relief funds from a severely flooded town unless its mayor OK'd a favored redevelopment project and that other aides intentionally blocked traffic leading to the George Washington Bridge to punish Fort Lee's Democratic mayor are being investigated by federal prosecutors and a legislative investigative panel.

The administration has denied the storm aid charges and the governor has said he had nothing to do with the planning or execution of the lane closings.

The latest Monmouth University/Asbury Park Press Poll shows approval of Christie's job performance now at 49 percent, with 46 percent disapproving.

That's a decline in approval of nine points since Jan. 2 and 20 points from one year ago.

"The governor needs to tread a fine line here because Democrats have a lot more leverage than they had before," Monmouth University Polling's Patrick Murphy told CBS 2's Sloan.

The George Washington Bridge scandal is at least partly to blame, CBS 2 reported. Sixty-one percent said they don't think Christie has been completely honest regarding the scandal.

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(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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