It’s a pivotal time in New Jersey’s fiscal history, with $6.4 billion in federal relief funding coming the state’s way. Given the critical moment, NJBIA released a guidance document this week for policymakers to consider how to best use that funding, balancing caution on how to spend it with where New Jersey can get its best return on investment.
“It’s really important that there is an overall recovery strategy for this funding from the American Rescue Plan,” said NJBIA Vice President of Government Affairs Christopher Emigholz. “It’s a massive infusion of money, but then New Jersey has a massive amount of problems if you look at the number of shuttered businesses that once provided tax revenue, the destroyed livelihoods, our continued high unemployment, our increasing debt and other fiscal challenges.
“We think the guidance and recommendations put forward in this blueprint will help New Jersey recover from the pandemic as expeditiously as possible, and we look forward to discussing it with our policymakers.”
Entitled “Navigating a Smooth Landing for Our State Budget and Economy,” the guidance document provides six core tenets and specific investment recommendations to help New Jersey best apply the $6.4 billion it will receive from the American Rescue Plan amid continuing fiscal struggles.
The six core tenets include:
- Debt reduction
- Coordination and collaboration of all levels of government by a central point in Gov. Phil 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
“The workforce development component spending here is particularly important,” Emigholz said. “We’re in a unique time when we have a historic number of displaced workers and many businesses who will need to do things differently during a pandemic and post-pandemic.
“So it really is critical that there is an investment in re-skilling and up-skilling for current workers and basic skills training, apprenticeships, K-12 and higher education for future workers in a new normal.”
Some of the investment recommendations made in NJBIA’s guidance document include a special short-term surplus to draw down over future budgets for anticipated spending growth and $500 million small business grants and loans.
Another $400 million is recommended to pay down the Unemployment Insurance (UI) Trust Fund debt, in order to delay the pending UI payroll tax increase on jobs by a year.
Funding for social service as safety net programs is recommended; as are monetary resources for school construction and upgrades to technology, water infrastructure and telecommunications/broadband infrastructure.
To see NJBIA’s full “Navigating a Smooth Landing for Our State Budget & Economy” guidance document, click here.