The Senate voted on Thursday to approve a pro-taxpayer bill, supported by NJBIA, that would require the state to stress test its financial ability to maintain services under various economic conditions.
The bill, S-1411, sponsored by Sen. Troy Singleton (D-7) passed by a vote of 37-0.
Under the bill, the Department of the Treasury would be required, once every three years, to conduct a stress test analysis of the state’s ability to maintain services and provide necessary assistance to residents in various economic conditions.
NJBIA Chief Government Affairs Officer Christopher Emigholz said the bill would improve budget transparency and give legislators better information as they make decisions during the state budget process.
“Anything we do to shed more light on our budget process, more light on our spending and revenue situations, is good for all taxpayers,” Emigholz said.
The legislation would require the stress test analyses to include:
- Long- and short-term projections of major funding sources, including revenues from major taxes and funding from the federal government
- A comparison between projections of major funding sources and historical trends for each of those funding sources
- An analysis of expenditures that are likely to increase or decrease in various economic conditions
- An accounting of the state’s reserves, including amounts deposited into the “Surplus Revenue Fund”
- The state’s options to avoid or lessen the impact of economic recessions.
Under the bill, the Treasury Department would be required to make the stress test analyses publicly accessible on its website. The Governor would also be required to include the findings in his annual budget message.
