Acting Gov. Way signs fiscal transparency bill into law (updated)

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Just days after being sworn in as the state’s new lieutenant governor, Tahesha Way got her first taste Tuesday as acting governor – even taking action on legislation.

Way was serving in the acting governor role while Gov. Phil Murphy traveled to a National Governors Association event in New Hampshire.

Among the legislation that Way signed into law was a bipartisan measure (Senate Bill 1884/Assembly Bill 4090) aimed at providing a clearer, easy-to-read assessment of the state’s finances. The law will require the Office of the State Auditor to publish a user-friendly, plain-language report that summarizes and analyzes the Annual New Jersey Comprehensive Financial Report – a voluminous and technical document detailing revenues, spending, assets and liabilities – conveying the state’s overall fiscal health.

In addition to having bipartisan sponsors, the bill was passed unanimously by the Assembly (73-0 last fall) and by the Senate (34-0 in June).

The bill requires the report to include:

• A summary of the state’s financial condition compared with neighboring states
• A summary of the state’s long-term liabilities compared with those of neighboring states
• A summary of the accuracy of the state’s revenue projections and an accounting of any structural imbalance in the state budget
• A summary of the state’s unrestricted cash reserves compared with those of neighboring states
• An analysis of the potential impacts of an economic recession on the state’s revenues and spending obligations

“For far too long, New Jersey’s annual financial reports have been written in obscure, financial language that is often only digestible by technocrats,” said state Sen. Steve Oroho, R-24th District, a prime bill sponsor. “This legislation will build public trust by allowing New Jerseyans to read, in layman’s terms, the financial status of the state, and to see exactly where their hard-earned tax dollars are going.”

The signing of the law was applauded by the New Jersey Business & Industry Association (NJBIA).

“By requiring the state auditor to publish a user-friendly report summarizing the Annual New Jersey Comprehensive Financial Report, our residents will readily gain a better understanding of the state’s revenues, costs, assets, and liabilities. This knowledge is not only important in ascertaining where their tax dollars are being applied, but also helps build public trust through greater awareness and transparency,” said NJBIA President and CEO Michele Siekerka. “The more engaged taxpayers are in understanding the successes and challenges of the state budget, the more voices we will have to inform better public policy and our overall competitiveness with other states.”

The signing of the legislation was also applauded by the New Jersey Society of CPAs (NJCPA), which helped draft the bill along with the NJBIA.

“This bill is critically important because it promotes a better understanding of the state’s complete financial picture, including ‘off-budget’ items like long-term liabilities and independent authorities. It goes beyond the annual budget, though the bill does include several budget transparency provisions,” Aiysha (AJ) Johnson, NJCPA CEO and executive director, said in a statement. “The ACFR contains important items not covered by the annual budget, such as billions of dollars in unfunded liabilities, billions in spending and debt and financial information on the state’s independent authorities.”

Johnson echoed the sentiments that, at over 400 pages filled with technical accounting jargon, the ACFR is difficult for a layperson to follow.

“This new law will play a critically important role in educating everyone on the state’s complete financial state, which will bring more transparency and provide for better policy making,” Johnson added.

Editor’s note: This story was updated at 1:13 p.m. ET Sept. 13, 2023, to include a statement from the New Jersey Society of CPAs.