New Jersey Republicans this week advanced proposals to beef up the state's slim surplus and calm edgy rating agencies, but their Democratic opponents blasted the ideas as proof the fiscal 1993 budget is flawed.

"This new budget is not even a month old and it has already been hauled into intensive care," said Assembly Minority Leader Joseph V. Doria, D-Hudson County.

The Republican-controlled Assembly passed two bills Monday that would let the state skim $47 million from local government coffers and commandeer virtually all of the $34 million surplus in New Jersey's Casino Redevelopment Fund. The Senate is expected to vote on those measures today.

A series of additional proposals are under consideration that could generate a total of more than $250 million for the surplus, on top of the $26 million reserve Gov. Jim Florio certified when he vetoed the budget last month.

The Democratic governor, whose veto was overridden by the Legislature, has said the surplus must be close to 2% of the budget, or $292 million, to convince the rating agencies to maintain New Jersey's high credit standing.

Standard & Poor's Corp. last month confirmed its AA-plus rating for the state, but switched its long-term outlook to negative from stable. Moody's Investors Service and Fitch Investors Service, which both rate New Jersey triple-A, have not completed their budget reviews.

Under the terms of one surplus proposal, a portion of the savings that municipalities would have enjoyed under a recently enacted pension fund accounting switch would be given to the state instead.

The accounting change, challenged by 15 unions in state Superior Court on Tuesday, was expected to generate $239 million for local governments. But the bill now under consideration would cut that amount of $192 million to feed the surplus.

Robert Yackel, chairman of the public employee committee of the AFL-CIO, one of the plaintiffs in the lawsuit, said the latest pension proposal is like the state "stealing the money twice."

The union lawsuit asks the court to refund $770 million the state took from pension funds as a result of switching the fund to a market-based accounting system from one based on book value.

The other major surplus proposal would take $32 million from the Casino Redevelopment Fund's $33.8 million surplus and add it to the general fund surplus. The casino fund's reserve was generated through a series of legislative moves over the course of the budget process, including a requirement that drug companies provide discounts on prescriptions to elderly residents.

Assemblyman Doria said the two bills the Assembly passed Monday "will only treat the symptoms" of the state's budget problems.

He said the need to take the money from the casino fund could have been avoided if Republicans had not rolled back the sales tax to 6% from 7% in the 1993 budget. And he added that trimming local governments' take from the pension fund accounting switch will force municipalities to raise property taxes.

"The clear Republican fiscal strategy here is to cut the sales tax by a penny and then sock it to seniors and the middle class," he said. "It is indeed a sad day when seniors and hard-working home owners are asked to assume the cost of maintaining the state's credit rating."

Assemblyman Rodney P. Frelinghuysen, R-Morris, the chairman of the appropriations committee, said the moves will not affect local property taxes.

"It wasn't money [local governments] were counting on in the first place," Assemblyman Frelinghuysen said. "Were moving to bolster the state's credit rating, and they should have a keen interest in the state's credit rating because that impacts on their ability to borrow."

He said the 1993 budget eliminated a $157 million deficit in the casino fund, so taking a newly generated $32 million surplus would not adversely affect senior citizen programs financed through the fund.

Republicans said they would not have resorted to beefing up the surplus with additional legislation if Gov. Florio had certified state revenues accurately. They argued that the state will actually realize about $250 million more than the government certified.

Assemblyman Frelinghuysen said he is concerned the administration's criticism of the budget could hurt New Jersey's credit standing. "But think the rating houses are pretty bright and they see through the political rhetoric," he said.

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