TRENTON – Twenty-five red-shirted state workers from CWA Local 1039 hold signs aloft and march around the fountain in front of the Statehouse Annex screaming for Gov. Jon Corzine to “negotiate, not dictate,” and “no furloughs, no layoffs,” while inside on the fourth floor, Assemblyman Louis Greenwald (D-Camden) and Assemblyman Declan O’Scanlon (R-Little Silver) open up on each other with the first full-throated argument of these late morning budget hearings.

In the middle of this committee eyeballing of Corzine’s $29.8 billion budget, their disagreement occurs on the issue of whether New Jersey is the highest taxed state in the country. O’Scanlon says indeed it is, and the committee chairman disagrees, making the case that the assessment of tax impact should be made based on income. 

“For the top 1% of income earners – those making over $500,000, we’re the highest in the nation,” says Greenwald. “But for 99% of the population, we’re in the middle.”

But O’Scanlon still wants to know how New Jersey intends to approach next year’s budget when the proposal this year to stop the budget bleeding now includes $2.2 billion in one-time federal stimulus money, $1 billion in pension deferrals, $361 million in bond refinancing, and $800 million from a sunset provision tax increase and other single shot injections.

“I add up $4-5 billion right off the top,” says O’Scanlon. “We’re pushing out the budget schedule.”

Greenwald goes after him.

“I can’t wait to see your budget that has no federal stimulus dollars,” he cracks, and when O’Scanlon invokes the middle class, the budget chair makes the argument Corzine has repeatedly taken to the road in defense of his hard-luck year prioritizing, which is that his budget proposal frontends education and senior citizen tax relief – in other words, middle class concerns. 

Whatever the merits of the chairman’s argument, a core Democratic Party constituency – members of the state workers unions and their leaders – are threatening to dump Greenwald’s governor, Corzine, who stands nine points down in today’s Fairleigh Dickinson University PublicMind poll and may be in an election-year death spiral according to hard-boiled observers of his inability to budge his favorables in an upward direction.

The governor's troubles won't belong to the state workers union if Corzine doesn’t meet them at the negotiating table to announce unequivocally his retreat from a plan to furlough state workers this summer, say the union leaders. 

On the street in front of the Statehouse Annex, Rae C. Roeder, president of Communications Workers of America (CWA) Local 1033, stands in the middle of a group of purple-shirted state employees who make on average between $40,000 and $50,000. 

CWA represents 40,000 public employees, 10,000 of whom can’t be furloughed under the terms of civil service. Of 78,000 state workers, 60,000 are eligible for the furloughs the governor has proposed as a budget cost-savings measure.

He’s going about it wrong, according to these state workers union leaders, who stand at the vanguard of about 80 or 90 protesters in Trenton.

“There’s no one negotiating with anybody,” Roeder says. “The governor’s office is not negotiating with us. They need to deal with 14,000 temporary employees. They need to get rid of their political appointments before they go after state workers. Gov. Corzine needs to enforce the condo sales tax. Until he does that, he has no right.”

Roeder’s opponents argue that she and other CWA leaders don’t speak for 95% of the state work force, which today remains on the job, refusing to support picketing that may backfire into pink slips for 7,000 workers - one figure floated earlier in the budget process - if leadership pushes the governor too far in an election year in which the GOP has pounded a pro-middle class, pro-business argument. 

“State workers understand the economic times,” says one worker, speaking on condition of anonymity. “They will not be used as pawns to satisfy the egos of CWA leadership.” 

But Roeder digs in.

There’s an undercurrent of fear among these labor leaders that if they succumb to the furloughs now and back the governor in his reelection bid, they do so riding those same one-shot gimmicks identified by O’Scanlon in this year’s budget, which presumably won’t be there in 2010. No longer in possession of the almighty political threat to stay home on Election Day, which they have now - state workers could add up to precisely that part of the budget the governor uses to balance the books in 2011 as he sits comfortably in year-one of a four-year term, having used their union street muscle to get re-elected.

How can they take that risk without in-stone negotiations now?

Roeder points at the Capitol.

“”The wizard from Wall Street there in the Gold Dome has stopped them from enforcing the rules for the condo tax,” she cries, in a complaint echoed and amplified statewide today as state workers union representatives denounce the governor’s proposal on the streets of at least 22 towns. 

“Under the Corzine budget plan, the average state worker making $50,000 a year will lose over $4,000 of their income (between the loss of wages from his proposed furlough days and foregone raises), while wealthy New Jerseyans making 10 times as much will pay zero in higher taxes,” CWA state director Hetty Rosenstein says. "State workers are prepared to do their share to help New Jersey through this budget crisis, but Governor Corzine is simply demanding too much from middle-income state workers who live paycheck to paycheck.  We must find a fairer way to close the budget gap."

Asked who she will back for governor, considering she doesn’t like Corzine and considering the most likely Republican alternative, former U.S. Attorney Chris Christie, has said publicly he would consider eliminating state workers, Roeder indicates a man standing nearby who sports a big anti-Corzine button on his lapel.

It’s former Glen Ridge Mayor Carl Bergmanson, who yesterday filed to run for governor in the Democratic Primary. 

“He’s been talking to us and we’ve been listening,” Roeder says of the long-shot candidate. “I’ve been a Democrat all my life, and with Bergmanson I can support a Democrat.”

Bergmanson beams.

“These guys have a tremendously accurate grievance,” he says. “A contract is a contract. The governor wants to break their contract. When I was mayor, I negotiated tough contracts with the unions. I wasn’t a pushover, and I won’t be as governor, but a contract is a contract. This guy is not a Democrat.”

But if there is some intersection between O’Scanlon/Christie’s and the CWA’s identification of patronage jobs as a savings that a get-tough governor should target, the Democrats’ trump is that notwithstanding no money-no name ID Bergmanson, Republican Gov. Christie would cut state workers to balance the budget next year, a prospect that for the time being leaves them with nowhere to go to prevent such an outcome but to Corzine.

And so O’Scanlon and Greenwald head for another round on the budget committee, and the 25 red-shirted workers from 1039 yell up at the glass windows of the Statehouse Annex with their signs held aloft as they continue in circles around the fountain.