N.J. Withholds Money from Municipalities

New York, NY —

The Corzine administration is taking the unprecedented step of withholding millions of dollars from dozens of municipalities.

The amounts range from as little as $1,500 dollars for the state's smaller towns to as much as $2.1 million for Newark. Elizabeth Mayor Chris Bollwage says the impact is catastrophic for local governments that already based their property tax rates and appropriations on what was supposed to be guaranteed state aid.

"In our legal research it is not constitutional because the budget law in New Jersey supercedes all law. Never before has an administrative or executive member of the state government decided to withhold payment on their own," Bollwage says.

State officials concede the move is unprecedented, but say it's necessary because of an $800 million deficit this fiscal year and a projected $8 billion gap next year.