TRENTON — New Jersey Gov. Jon Corzine yesterday delivered his last state of the state speech, highlighting his accomplishments during the past four years and acknowledging his failure to cut away at the state’s more than $33.87 billion of outstanding debt.

Calling it “the elephant in the room,” Corzine spoke of his unsuccessful push to increase tolls on New Jersey’s roadways to generate new money that would have decreased the state’s outstanding bond debt, its $23 billion pension obligation, and its $55.9 billion other post-employment benefits liability.

“I take full responsibility for not completing the job,” Corzine said in regard to paying down New Jersey’s debt levels in his speech before a joint session of the Legislature at the statehouse in Trenton. “That doesn’t absolve you or future governors from proposing alternatives and confronting the problem.”

Corzine, a Democrat, took office in January 2006 and lost a re-election bid against Republican governor-elect Chris Christie, who will take office on Tuesday.

Along with New Jersey’s property taxes, the Corzine urged the Democratic-controlled Legislature to work with Christie to tackle the state’s growing debt-service costs.

“If we don’t borrow another penny, not one penny, over the next decade for highways, schools, or open space, our debt will double because of the power of compound interest,” Corzine said. “There is no easy solution, certainly, in my opinion, no answers without revenues. Doing nothing isn’t an option unless the choice is to deeply impair New Jersey’s future.”

Afterwards, Senate Minority Leader Tom Kean, R-Essex, said he preferred job creation over tax hikes to help generate more revenue for the state to meet its debt-service obligations.

“If we create jobs, then we create more opportunities,” Kean said after Corzine’s speech. “These are things we can do on a bipartisan basis.”

The Garden State has some of the highest property taxes in the country, as many small municipalities maintain separate public safety and other services rather than sharing them regionally.

“Let’s call it like it is — everyone’s property taxes are too damn high,” the governor said, receiving a round of applause. “Let’s also be brutally honest — until we reform our state’s antiquated structure for providing local government services, a home-rule system dating back to the 17th century, we’re never going to get the job done.”

Corzine repeatedly thanked the Legislature for helping to achieve what he cited as his biggest accomplishments in office: reforming school funding in underprivileged areas called the Abbott districts and in other needed areas, implementing a $3.9 billion school construction program, and raising test scores.

“I consider this narrative on our children’s education to be a cornerstone of my legacy as governor. It is also yours, one of which you should all be very proud of it as well, ” he said.

He also pointed to $6.4 billion of savings for the state over 15 years through spending cuts, reducing the state workforce by more than 8,500 positions, closing departments, and pension reform, among other changes.

Other successes included establishing New Jersey’s first ever Department of State Comptroller, requiring all bonds not backed by a dedicated revenue stream to go before voters, implementing anticorruption laws, and crafting a state-level economic recovery packages in response to the recession.

In response to Corzine, Christie said both political parties must work together to address New Jersey’s financial problems. Christie estimated the fiscal 2011 budget has a deficit of more than $8 billion. He will submit his first budget proposal on March 16.

“While we did not always agree, Gov. Corzine worked hard and diligently served the people of New Jersey,” Christie said in a statement. “But now is the time to look to the future and fundamentally change how government works if we are going to revive our state’s fiscal health and help struggling New Jersey families.”

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