Gov. Phil Murphy’s 2020 budget will include a $317 million payment into the state’s rainy day fund, the first deposit into the fund in over a decade after it ran dry following the Great Recession, State Treasurer Elizabeth Maher Muoio told lawmakers on Tuesday.
That amount will be thanks to the $1.1 billion surplus that the state will have following the end of the 2019 budget, which closes on June 30, Muoio said.
“Our surplus and rainy day fund are crucial to sustaining us in the event of an economic downtown, which most economists view as inevitable, sooner than later,” Muoio said in her testimony to the Senate Budget and Appropriations Committee on Tuesday afternoon.
“While our proposed surplus is roughly double the average of the previous administration, it represents only three percent of our total budget,” she countered. “So we still have a long way to go to get to the recommended average of 10 percent of our total budget.
The state treasury describes the rainy day fund as a “lockbox,” which can only be used under very specific circumstances, such as the financial crisis a decade ago during which the state burned through $734.7 million to soften the blow of revenue decreases stemming from the nationwide financial crisis.
“We have to prepare for forces both inside and outside of our control,” Muoio said.