TRENTON – New Jersey’s state budget is awash in cash for the first time in a generation, but there’s a good chance it won’t last long.
The Murphy administration forecasts that it will end the current fiscal year with a combined surplus of $6.34 billion, but its 2022 spending plan uses much of that to offset spending. Next year’s budget has a projected year-end balance of $2.2 billion.
Thomas Koenig, the legislative budget and finance officer for the Office of Legislative Services, said in addition to expenditures in fiscal 2022 exceeding anticipated revenues by nearly $4 billion, more than $700 million in federal COVID aid that offsets state spending in the coming year won’t recur.
Credit: (NJGOV)
April 6, 2021: State Treasurer Elizabeth Maher Muoio addresses the Senate Budget and Appropriations Committee.
During testimony before lawmakers Tuesday, Gov. Phil Murphy’s treasurer repeatedly defended a decision to issue nearly $4 billion in debt without voter signoff last year in response to the coronavirus pandemic.
New Jersey’s fiscal outlook has seen a major turnaround in recent months thanks to a flood of federal aid and rebounding revenue collections. Where once it predicted a fiscal emergency, Murphy’s administration is now forecasting a surplus of more than $6 billion.
But that surplus and that rise in tax revenues were not evident in November when the emergency bonds were issued, Treasurer Elizabeth Maher Muoio told lawmakers on the first day of hearings for the governor’s spending proposal for the coming fiscal year.
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What does a church do if it can’t afford to pay a pastor a salary? It buys his house from him for $1.65 million $100,000 more than he paid for it two years earlier.
TRENTON – New Jersey’s budget is balanced in part through nearly $4.3 billion from emergency borrowing authorized in response to the coronavirus pandemic, but a nonpartisan budget analyst says it’s now clear that wasn’t necessary.
At a Senate budget committee hearing Tuesday, Thomas Koenig, the Office of Legislative Services’ budget and finance officer, said the borrowing was defensible at the time the budget was adopted in September.
“But from today’s vantage point, the borrowing was not essential to balancing the FY21 budget,” Koenig said.
Koenig said that without the borrowing, the state’s surplus would have fallen by only $165 million since Oct. 1 and remain slightly above $2 billion. Revenue forecasts have been upgraded by $3.4 billion, and the budget counts on $1.1 billion in lapses, helping build a surplus of $6.4 billion – over 15% of spending.
NJ officials fear fiscal cliff despite billions in extra cash this year April 6, 2021
12:56 pm
Despite billions of dollars in extra cash blowing expectations for how the state budget would fare amid the COVID-19 recession, top budget lawmakers and state financial analysts are warning of a steep drop in money in the years to come.
“This is in my opinion, a two- to three-year budget cycle,” said Senate Budget Chair Paul Sarlo, D-36th District, during an April 6 budget hearing.
Sarlo continued that “It’s incumbent upon us to work with this administration… to pay down debt and… make sure that we make these investments strategically… that we plan for the next two or three fiscal years.”