The state on Wednesday told bond investors it is facing a $1 billion hole in this year’s budget — a shortfall five times bigger than previously disclosed — and will cut funding for schools, municipalities, higher education, hospitals and pension plans to close the gap.

For months, Governor Corzine has been hinting at the need for such cuts as New Jersey grapples with the fallout from the deepest economic crisis since the Great Depression. Officials previously acknowledged a deficit of at least $8 billion for fiscal year 2011 and $190 million for this fiscal year. The depth of the state’s current shortfall was not revealed until Wednesday.

"It is going to be a gut-wrenching experience," said Bill Dressel, executive director of the New Jersey League of Municipalities.

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Filed under: * Economics, Politics • Economy • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

1. Chris wrote: NJ and Georgia have roughly the same population yet one employs 3 times as many state and local workers as the other.  Hmmm, now which is which? November 27, 1:46 pm | [comment link]

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