May 22, 2014
Re: State Treasurer Testifies on State Budget Revisions
Following Governor Christie’s May 20 announcement regarding cuts to the State Pension Payment, State Treasurer Andrew Sidamon-Eristoff provided further details on actions taken, and further actions needed, to close the State’s widening budget gaps. In his testimony on Wednesday before the Assembly Budget Committee and on Thursday before the Senate Budget and Appropriations Committee, the Treasurer enumerated savings of over $1 billion in the State’s current fiscal year necessitated by lagging revenue collections. He also provided lowered revenue estimates for the State’s next (FY 2015) Fiscal Year and corresponding cuts in spending, totaling almost $1.7 billion.
As required by the Governor’s Executive Order 156, the Director of the Division of Budget and Accounting will reduce State FY 2014 pension payments by $887 million. Other savings will be realized in the State’s current Fiscal Year by lapsing funds (identifying amounts appropriated, but not expended), including Brownfields Site Reimbursement funding ($10 million), Highlands Protection funding ($4 million), and Volunteer Emergency Service Organizations Loan funding ($2 million).
Among the spending adjustments to the Governor’s original budget proposal for FY 2015, the Treasurer proposed a $1.57 billion reduction for pension payments, a $21 million reduction in the proposed appropriation for the Homestead Benefit Program (based on diminishing enrollments), and a $3.5 million reduction in Senior Freeze funding (for the same reason).
Citing cash flow issues, specifically April Income Tax receipts, the Treasurer also indicated that the Administration will delay distribution of Homestead Property Tax Credit payments, from August, 2014 to May, 2015. This means that qualifying property taxpayers will not receive any credits this year (Calendar Year 2014).
Governor Christie is expected to propose further public employee pension and benefit reforms sometime next month.
We appreciate the fact that the Administration has not recommended any reduction in major municipal property tax relief funding program, at this time. We will keep you posted on further State budget developments, as the June 30 Appropriations Act adoption deadline approaches. 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.