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The home stretch of the FY22 budget season hits on Monday, when the Legislature is set to introduce its state budget bill.
If the bill is voted out of committee early next week, which is anticipated, the Legislature could send it to Gov. Phil Murphy’s desk as early as Thursday, when voting sessions are scheduled for both chambers.
The governor proposed a $44.8 billion spending plan in February, complete with no tax increases and a plan for the state’s first full pension payment since 1996.
The state is now flush with cash after borrowing more than $4 billion, with interest, last year to accommodate projected revenue losses that never came.
This goes along with another $4.1 billion in added FY21 tax revenue, $1.1 billion in increased FY22 projections and more than $6 billion federal American Rescue Plan dollars – bringing the state’s excess and largely discretionary cash position at the end of the FY22 budget year to more than $16 billion – or almost 40% of total appropriations.
NJBIA Vice President of Christopher Emigholz said he doesn’t anticipate any major drama that would impact the June 30 deadline for lawmakers to make an agreement. But having more money to address New Jersey’s has resulted in deeper conversations between lawmakers and the front office.
“We could potentially see even a bigger payment into the state pension system, or money dedicated to New Jersey’s Unemployment Insurance Trust Fund, or more school funding and increases for infrastructure,” Emigholz said. “We just hope our policymakers don’t fall into the trap of directing our considerable coffers toward new, recurring spending – particularly in an election year.
“New Jersey has a real opportunity to pay down debt, while making targeted, pro-growth investments to boost our economy and avoid future tax increases. We hope that’s the focus of our policymakers.”
NJBIA has continued to advocate for the tenets found in its guidance document released earlier this spring, “Navigating a Smooth Landing for Our State Budget and Economy.”
NJBIA recommendations to policymakers include:
- Debt reduction (where possible and appropriate because the federal American Rescue Plan funds have limits on that)
- Coordination and collaboration of all levels of government by a central point in Gov. Murphy’s office, working with legislative input, with the goal of avoiding redundant spending
- Spending that is focused only on non-recurring items that fill a current need
- A multi-year approach to spending to ensure that expenditures are not permanently recurring and avoid tax increases
- A focus on protecting and assisting those impacted by the pandemic, and not using funding to pay for new, unrelated programs
- Stimulation of the economy through pro-growth spending on workforce development, infrastructure and innovation