May 19, 2009
RE: State Budget Update
I. STATE BUDGET UPDATE
This afternoon State Treasurer David Rousseau spoke before the Assembly Budget Committee outlining how the Governor’s proposed FY 2010 budget will be reduced by $2 billion. (Press Release and supporting document)
Of particular interest to local governments is Treasurer Rousseau’s statement that there will be no further reduction to municipal formula aid (CMPTRA or Energy Receipts) or to extraordinary aid. The Administration is, however, proposing a $25 million dollar reduction in “special municipal aid.” Special Municipal Aid is provided to municipalities faced with structural deficits, wherein essential service demands exceed the ability of the resident property taxpayers to support. We will provide timely updates when it is determined how these cuts will be administered and what communities will face cuts.
Earlier in the day, the Assembly Budget Committee heard testimony from the non-partisan Office of Legislative Service (OLS) that indicate that the State’s revenue collections will be approximately $3 billion short of earlier projections over the next 15 months.
Very truly yours,
William G. Dressel, Jr.