March 28, 2011
RE: Nonpartisan Legislative Budget and Finance Officer Presents State Tax and Revenue Outlook
Today in Trenton, Dr. David Rosen, the highly-respected and nonpartisan Legislative Budget and Finance Officer, gave the Senate Budget and Appropriations Committee reasons to hope and reasons to worry with “… a combination of good news – after two awful years, revenues appear to be growing again – and bad news – we are still well below our peak revenue years.” You can access the testimony at http://www.njleg.state.nj.us/legislativepub/budget_2012/Rosen_testimony_03282011.pdf.
Dr. Rosen now estimates that the current State budget (FY 2011) has or will have $552 million more than was anticipated, when the appropriations act was signed into law, last June. If the Governor makes good on his offer to contribute $506 million towards the State’s pension obligations (contingent on Legislative action on pension and benefit reforms), then the State could still end the current Fiscal Year with $46 million more than the $303 million, on which it had previously planned.
As reported by Dr. Rosen, the revenue projections of the nonpartisan Office of Legislative Services (OLS) differ only slightly from those relied on by Governor Christie and his Administration. “For FY 2011, OLS is projecting $72 million less than the Executive and for FY 2012 we are projecting $53 million less,” he testified. “The combined difference - - $125 million - - is less than one-half of 1% of the Governor’s recommended budget appropriation level.” The complete OLS analysis is available at http://www.njleg.state.nj.us/legislativepub/budget_2012/tax_revenue_outlook12.pdf.
Dr. Rosen concluded his prepared remarks with three observations regarding events that could influence the Legislature’s review of the Governor’s proposal for our State’s next Fiscal Year.
First, the Governor’s proposal anticipates $10.2 billion in Federal funding. The current negotiations regarding discretionary spending in Washington, however, could result in New Jersey receiving considerably less than that during its next Fiscal Year.
Second, imminent State Supreme Court review of school funding could have a significant impact on New Jersey spending in the next Fiscal Year.
Third, a projected budget surplus of 1% (for FY 2012) leaves little margin for error or unanticipated events.
State Treasurer Andrew Sidamon-Eristoff was slated to appear before the Committee today, but that appearance was postponed by the Committee Chair, due to a meeting of the State’s Redistricting Commission.
We expect the Treasurer to testify before the Assembly Budget Committee tomorrow. We will report on that testimony, and all other State budget developments important to New Jersey municipalities.
If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or email@example.com.
Very truly yours,
William G. Dressel, Jr.