A year ago, New Jersey unnecessarily borrowed more than $4 billion in non-callable bonds based on Murphy administration revenue projections.
Eight months later, the state was looking at a $10.1 billion surplus.
To prevent future failed estimates of such wide disparity – and the potential tax increases resulting from them – New Jersey lawmakers are advancing a bill during the current lame duck session that would create a New Jersey Revenue Advisory Board.
The legislation, sponsored by Sen. Steven Oroho (R-24), would provide consensus revenue forecasting advice for state budget purposes.
NJBIA is supporting bill S-1530. It cleared the Senate Budget and Appropriations Committee on Monday.
“This bill will bring some much-needed transparency to the revenue-projecting process, while also bringing less volatility to budget forecasting,” said NJBIA Vice President Christopher Emigholz, who testified on the bill on Monday.
“Think about it like being prepared for the twists and turns of a roller coaster. You can better plan for the downs and take better advantage of the ups. We think this is a good bill and a good way to better avoid any fiscal misrepresentation.”
The governor would still retain the authority to certify revenues for the state budget under the legislation. However, the revenue advisory board would include input from outside experts and members of the public, along with the state treasurer and the top budget official from the nonpartisan Office of Legislative Services.
There would also be appointments for the executive branch and the majority and minority parties of the Legislature. Further, the advisory board would be required to hold public hearings during the revenue forecasting process.
Oroho said the bill would help all policymakers, and that “more dependable projections will help minimize unanticipated budgetary problems.”
“I think this is an important bill for all residents, businesses and stakeholders in New Jersey,” Emigholz added. “Right now, if the state overestimates revenue projections, it may be in a position where it is forced to make big cuts at the last minute of the budget season. If the state underestimates the projections, funds found at the end of the budget process may be inefficiently spent or go unspent.
“Inaccurate revenue projections for our state budget are not new to this past year, nor are they partisan. But this bill will help make it a better process going forward for all current and future governors and legislators.”