New Jersey lawmakers, aware that this year's projected surplus is meager by rating agency standards, have introduced a series of proposals to bolster the state's cash reserve.

The measures could add more than $250 million to the $26 million surplus Gov. Jim Florio certified last week when he vetoed the $14.6 billion fiscal 1993 budget.

The governor, whose veto was overridden by the Republican-controlled Legislature, warned that the current surplus is too small to convince the rating agencies that New Jersey should retain its high credit standing.

He said cash reserves should be no less than 2% of the general fund budget, or about $292 million.

Legislative leaders, who agree the surplus is too small, say Gov. Florio discounted legitimate revenue sources and stymied their effort to build a better reserve. The feud has put lawmakers in the unusual position of having to meet with the rating agencies to justify the budget, even as Treasury officials who normally defend the budget to Wall Street publicity criticize it instead.

Assemblyman Rodney P. Frelinghuysen, the chairman of the Appropriations Committee, has met with agency officials over the past few weeks, and said he believes those discussions helped convince Standard & Poor's that the budget is in better shape than Gov. Florto says.

Standard & Poor's this week affirmed its AA-plus rating and removed New Jersey from negative Credit Watch. But the agency also switched its longer-term outlook on the state from stable to negative.

A major point of contention between the Legislature and the governor are projections for tax collections during fiscal 1993. in New Jersey, the governor has the power to certify revenue projections, and Republicans charge Gov. Florio undercounted revenues to make their job more difficult.

"It was a political decision to give us no assistance on revenues," Assemblyman Frelinghuysen said.

As a result, lawmakers say $62 million more than the governor certified for a variety of taxes will accrue during 1993 and can be applied to the surplus.

But Richard McGrath, a spokesman for Treasurer Samuel Crane, said the administration "has some strong reservations" about that figure. "We feel the revenue estimates should be plausible and tied to economic conditions," Mr. McGrath said.

Other surplus enhancers are less contentious. but the amounts each would add to cash reserves are in dispute.

A plan to improve collection of back taxes, for example, could generate as much as $50 million, according to legislative sources. But the Florio administration says the state should count on only about $20 million to $25 million from that source.

The largest one-shot in the budget, a $770 million cash infusion resulting from a revaluation of state pension fund assets, was expected to send $239 million to municipalities across the state as an added bonus from the accounting switch. The Legislature now hopes to skim $47 million from that money to feed the surplus, cutting the take for towns and cities to about $192 million.

The Legislature says another $35 million that the governor refused to certify will come from the federal government, in the form of an unpaid Medicaid reimbursement for the fourth quarter of fiscal 1991. The money is not part of a larger Medicaid dispute between the state and the federal government over a $450 million retroactive reimbursement request that federal regulators rejected earlier this year, according to Assemblyman Frelinghuysen.

Legislation has also been introduced that would require drug companies to offer discounts to senior citizens for prescriptions. The money saved by state aid programs for the elderly would be deposited into the casino revenue fund, and a like amount would be transferred from that fund into the general fund. The bill could generate up to $32 million for the surplus, according to legislative sources.

One piece of legislation that Gov. Florio has already signed will provide $15 million by accelerating collection of estate taxes. Another $15 million is expected from a diversion of federal Medicaid money intended for counties.

If all of the proposals under consideration materialized at the levels the Legislature projects, the $26 million surplus would grow to $282 million. But Assemblyman Frelinghuysen said he would take a more conservative approach, predicting the surplus will be closer to $225 million.

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